■Business Overview
1. Features of NSW ＜9739＞
The company is developing four businesses: enterprise solutions, service solutions, embedded solutions, and device solutions, and aims to expand DX related businesses that make use of these technical synergies. The fact that it combines both software and hardware technology and know-how is a major advantage.
Accumulation of industry and business know-how and system construction capabilities in various industrial fields cultivated through the enterprise solution business, service coordination capabilities for the service solution business and provision of infrastructure platforms such as cloud environments, product development capabilities such as embedded software and LSI* design in the embedded solution business and device solution business, and image processing technology, and IoT and AI that make use of these synergies The company's major strength is that it has a backbone that can support the realization of DX required by customers centered on digital technology, starting with digital technology, and it is a policy to make use of these to connect to future growth paths.
*Large-scale integrated circuit is an abbreviation of Integrated Circuit. An integrated circuit incorporating electronic components such as numerous transistors, diodes, resistors, and capacitors into a single semiconductor chip.
2. Business content
In addition to strengthening and expanding each business, the company reorganized its business promotion system from the fiscal year ending 2023/3 in anticipation of future business development. Specifically, in addition to changing the business area from the conventional 3 divisions to 4 divisions, the name of conventional IT solutions was changed to “enterprise solutions,” and product solutions were divided into “embedded solutions” and “device solutions.” Note that “Service Solution” has not changed in terms of classification or name.
Looking at sales and operating income by segment for the fiscal year ending 2024/3, enterprise solutions account for 33.2% of sales and 41.6% of operating profit, service solutions account for 27.8% of sales and 7.3% of operating profit, embedded solutions account for 21.2% of sales and 27.3% of operating profit, and device solutions account for 17.8% of sales and 23.9% of operating profit. The reason why profit margins for embedded solutions and device solutions are relatively high is probably because technical barriers to entry are high, and there are few companies that handle the same business on the scale of an independent company. Also, in enterprise solutions, efforts to improve profitability and suppress unprofitable projects have been successful, and profit margins have improved significantly in recent years. Meanwhile, profit margins for service solutions are relatively low in the segment independent from the fiscal year ending 2020/3, and system strengthening for business expansion and upfront investment to develop new services are having an impact.
Enterprise solutions provide business-related solutions. Utilizing business know-how cultivated over many years for manufacturing, distribution, finance/insurance, government offices, etc., we provide optimal solutions for customers, from consulting to system design, development, and maintenance/operation.
Service solutions provide IT services and IoT & AI services. IT services support customer systems with a variety of services, from servers and network designs that maximize system performance, and secure environment construction to highly reliable operation/monitoring using urban and suburban data centers. Furthermore, in IoT & AI services, we support the creation of new business value for customers, from data accumulation to analysis and utilization, based on the IoT platform “Toami,” utilizing the strength of being able to coordinate everything from devices to clouds.
Embedded solutions provide embedded system development and edge device solutions. Embedded system development supports product diversification, efficiency, and high-quality design with embedded technology for middleware and driver development from applications cultivated through various product development, such as automotive and industrial fields, etc., and provides various solutions for smartening. Furthermore, in edge device solutions, we propose an optimal IoT environment for customers with a small start with reduced costs through abundant design/development capabilities that can handle everything from embedded applications to LSI in-house, and alliances with various sensor and device vendors.
Device solutions are developed for LSI/FPGA (integrated circuits where purchasers and designers can set configurations after manufacturing). Solutions are provided according to requirements, from high-level design, logic design/verification, logic synthesis, layout design, manufacturing to testing. It is compatible with low power consumption designs and advanced processes in various fields such as image processing and communication control.
By fusing know-how from the above 4 segments, the business field with high expectations for a new pillar of profit is a DX related business centered on digital technology such as IoT and AI. Currently, the business is carried out in a form that is included in the profits of each existing segment, and its major strength is that it has the ability to handle application development and analysis services necessary for IoT, embedded applications starting with wireless and sensor technology, and even LSI design, centering on the IoT cloud platform “Toami,” which began selling in 2013/5. “Toami” has been introduced by more than 100 companies in total, centering on “IoT conversion of products,” and the number of alliance partners has also expanded to over 30 companies, and is being deployed in over 30 countries around the world. Inquiries for related services, such as analysis services to make more effective use of data collected by IoT, are also strong. There is a track record of using “Toami” by Panasonic Holdings ＜6752＞, Nipron Co., Ltd., Exeo Group ＜1951＞, Tohoku Energy Service Co., Ltd., Watanabe Electric Industries Co., Ltd., Renesas Electronics ＜6723＞, NEC Netsi ＜1973＞, Rion ＜6823＞, Japan Radio Co., Ltd.
(Written by FISCO Visiting Analyst Shigeki Kuni)