Japan’s local cloud market

A recent study by Singapore-based IT analyst Springboard Research found that Japanese businesses are adopting cloud computing at the highest rate in the Asia-Pacific region. In a survey of more than 3,500 organisations in Japan, Springboard found that 13% had adopted some form of cloud computing or software as a service (SaaS).

Interestingly, take-up is strongest (36%) among companies with 10,000 employees or more. “Because of the economic conditions, cost saving is a major focus for large companies,” says Springboard research manager Masami Kashiwagi. Nearly half (47%) of respondents said they were using cloud computing in order to reduce hardware costs.

Adoption has been much slower among small and medium-sized businesses. “The problem is the awareness level,” Kashiwagi explains. “Smaller companies in Japan don’t have dedicated IT teams. They are just concerned with daily operations.”

The Japanese government, for its part, is encouraging companies to use cloud services, as it believes that more effective use of IT will make the economy more competitive, Kashiwagi says.

However, Japanese companies are in general more risk averse and conservative than their global counterparts, she adds. US SaaS vendor Salesforce.com announced in October 2010 that it would deliver application services from NTT’s data centre in Tokyo, partly for these reasons.

The Japanese cloud computing market is still up for grabs, Springboard’s research suggests. It found that most respondents could name a spread of Japanese and international-based vendors, but no market leader. According to Kashiwagi, US-based providers such as Salesforce.com and Google currently have the largest “mind share” but their market penetration remains low.

Therefore, the advent of cloud might reinvigorate the Japanese ICT suppliers’ domestic business. But equally, it could see their local monopolies disrupted by US invaders. 

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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