■Business Overview

1. Market trends

What supports the growth of Optim (3694) is the progress of the Fourth Industrial Revolution*1. In recent years, IoT (Internet of Things) has spread rapidly, not limited to PCs and mobile devices, but also network cameras, sensors, wearable devices, etc., and according to the company, it is predicted that 41.6 billion IoT devices will be installed in 2025. Along with this, the amount of data generated has also exploded, and it is estimated that the amount of data generated by IoT devices in the world will reach 79.4 trillion GB (about 4 times that of 2020) by 2025. The accelerated increase in big data will support the use of AI to derive useful information from it. The company provides solutions that are key to advancing the 4th industrial revolution with “Optimal Biz,” which manages IoT devices, and the platform “OptiM Cloud IoT OS” for using IoT/AI, etc., and it can be said that this is one of its strengths. Furthermore, the market targeted by the company is a huge market with an estimated potential of approximately 160 trillion yen (45 billion units x 300 yen/month*2).

*1 The industrial structure will change drastically due to the development of information and communication technologies such as IoT, AI, and big data, and new economic value will be created.

*2 “45 billion units” is the estimated number of IoT device shipments. “300 yen/month” is the average monthly unit price for “Optimal Biz.”

2. Business areas

(1) Mobile management service “Optimal Biz”

“Optimal Biz” is a service representing the company, which began providing it in 2009. It is classified as an MDM tool, and management and security measures for terminals such as smartphones, tablets, personal computers, and IT devices for enterprises can be easily realized from a browser. It is provided through numerous sales partners such as Fujifilm Business Innovation Co., Ltd., which is a group company of KDDI, NTT East, and Fujifilm Holdings ＜4901＞, Panasonic Solution Technology Co., Ltd., which is a group company of Panasonic Holdings ＜6752＞, Ricoh Japan Co., Ltd., which is a sales subsidiary of Ricoh ＜7752＞, and Otsuka Corporation ＜4768＞ It is offered as an OEM service, and the company receives a license fee (standard price for 1 terminal end user is 300 yen/month) according to the number of terminals. While the domestic MDM market is growing steadily at an annual rate of 10% or more, the company has acquired the No. 1 market share for 13 consecutive years, and implementation results have reached 180,000 companies or more, establishing a de facto standard position. Also, since the average cancellation rate is about 0.5%, which is well below the subscription service industry average, the high level of customer satisfaction can also be seen. Since the spread of the novel coronavirus infection (hereinafter, COVID-19), the introduction of telework has expanded regardless of industry type or scale, and the number of licenses has steadily expanded as needs for management and security measures of PCs and smartphones used for work have increased. In the area surrounding “Optimal Biz,” there are new services such as “OptiM Contract,” “OptiM electronic book storage,” “OptiM ID+,” and “OptiM Asset,” etc., and convenience is improved by using them in cooperation.

(2) X-Tech Services

The company utilizes “OptiM Cloud IoT OS,” which is a platform for platformers, and will reinvent all industries into the 4th industrial revolution type industry with “○○×IT,” which combines each industry with IT (AI/IoT, etc.). This initiative began with demonstration tests and has grown as a formal business or service for specific client companies and industries. The leading industries are “digital construction,” “agritech,” and “digital health,” and there are many services that have already been launched as businesses.

a) Digital construction

The construction and civil engineering industry faces various issues, such as labor shortages due to labor shortages, etc., and the closure of local companies. The use of AI and IoT has progressed to solve these problems. The company provides “OptiM Cloud IoT OS” to the construction and civil engineering platform “LANDLOG” of EARTHBRAIN Co., Ltd., a joint venture led by Komatsu, and aims to realize a safe and highly productive future site. “LANDLOG” collects and accumulates data on all kinds of “things” throughout the construction and production process (management and analysis of excavators, dump trucks, drones, etc. is possible) and provides users with data processed into a format that can be used to improve site efficiency. “OptiM Cloud IoT OS” is being used as its foundation. Also, in 2020, “Land Log Marketing Co., Ltd. (currently Optim Digital Construction Co., Ltd.)” was established to promote construction DX and ICT (information and communication technology) construction, and sells smart construction retrofit kits* and markets DX solutions for construction.

* By “retrofitting” the latest digital equipment to the familiar hydraulic excavator currently in use, high functionality through ICT will be realized.

One application that is attracting attention in the industry is “OptiM Geo Scan,” which was developed ahead of the rest of the world. High-accuracy three-dimensional data can be acquired simply by scanning a surveyed object such as a soil structure with a smartphone or tablet with a built-in LiDAR sensor. It demonstrates superiority even at small-scale sites where drones, laser scanners, etc. cannot be used, and surveying time can be reduced by up to 60% compared to conventional light wave surveying. Also, since surveying expertise is unnecessary, and surveying can be carried out easily by one person, it is useful for resolving labor shortages and engineer shortages. It was developed ahead of the rest of the world, and since sales began in 2021, various options and peripherals have been developed, starting with the terrestrial laser scanner “OptiM Geo Scan Advance,” etc., and convenience has been further improved. The company estimates the potential market size for the construction and civil engineering sector at 360 billion yen.

b) Agritech

In the agricultural sector, there is a shortage of manpower due to the aging of producers and a decline in the labor population, and problems such as an increase in abandoned cultivated land and a decline in the domestic self-sufficiency rate are serious. The company has comprehensively developed AI/IoT/robotics technology/platforms (agricultural DX services), starting with the world's first “pinpoint pesticide spray/fertilization technology,” to support labor saving and high profitability in agriculture. In addition to pinpoint pesticide spraying, services developed by the company include “seeding technology” using drones, “Agri Field Manager,” a service that analyzes images of fields and crops using AI, and “wide-area field management systems” using glider drones, etc., all of which are technologies that support cutting-edge smart agriculture. Currently, “pinpoint time spraying” services that aim to achieve maximum control effects with minimal pesticides at the optimal time by combining growth prediction technology, pest occurrence prediction technology, and drone control knowledge cultivated so far are expanding on a nationwide scale. We are actively promoting efforts to resolve labor shortages for producers, reduce costs, and at the same time contribute to safe and secure eating habits for consumers, and at the same time reduce environmental impact. The company estimates the potential market size for this field at 388.5 billion yen.

(Written by FISCO Visiting Analyst Hideo Kakuta)