Business Philosophy and Middle Term Plan | Management Policy | IIJ

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Business Philosophy and Middle Term Plan

Business Philosophy

As computer science has become the fundamental technology for communications, communications and information systems are now operated on a shared Internet platform. Pervasive usage of Internet, one of those technological innovations that occur maybe once in a century, changes every system and mechanism in government, society, industry and business. Based upon this understanding, we set our business philosophy as follows:

  • We commit ourselves to take initiatives continuously in the field of Internet technology to open up network society's unlimited possibilities.
  • We strive to create network society that fulfills is social contribution by developing and introducing highly reliable and value-added IT services to support network society
  • We aim to offer a working environment where our staffs aggressively challenge towards technology innovation and social contribution with pride and the feeling of reward.

Middle Term Plan (FY2016 to FY2020)

  • (*) We've disclosed our middle term plan (FY2016-FY2020) in May 2016. We've announced the plan in our earnings release titled "IIJ Announces Full Year and Fourth Quarter Financial Results for the Fiscal Year Ended March 31, 2016" which was announced and filed as 6k to the SEC on May 13, 2016. Below is the summary of the plan.

IIJ group is involved in ICT-related market which competitive landscape is expected to become more intensified yet also brings very large market opportunities in the middle to long term. The market is expected to experience changes in enterprise information systems including a spread of cloud computing, the expansion of ICT usage in business activities as represented by BigData and IoT(*1), increasing demands for security-related services caused by information leakage and a rapid expansion of MVNO market for consumer due to a spread of inexpensive SIM card services.

Under such environment, we have established the following middle term plan (from FY2016 to FY2020).

Our Vision

  • Operate one of the largest networks and server infrastructures in Japan by which we provide reliable and value-added services to offer comprehensive IT environment required by enterprises' activities.
  • Exert our competitive advantage continuously with aggressive technology developments and advanced operating skills.
  • Challenge new business areas by leveraging long and rich experience of developing Internet related technology.

Achieve sustainable business growth over the long term through above activities.

Performance Target

  • Aim to achieve approx. JPY250 billion of total revenue in FY2020 by maintaining annual revenue growth rate of more than 10%, which makes us one of the leading IT companies in Japan.
  • Aim to exceed JPY10 billion of operating income during the middle term plan (FY2016 to FY2020) and maintain double-digit annual operating income growth rate continuously by expanding gross margin along with revenue growth.

Business Strategies

  • Provide comprehensive solutions of "network cloud services"(*2) and "system cloud services"(*3) as our core product for enterprise customers with adding systems integration functions. Then, capture the trend to shift from conventional transaction such as on-premise systems to IT services and outsourcing.
  • Continue to focus on our advantageous businesses such as MVNO and security.
    • MVNO business: aim to have 7 million subscriptions by the end of FY2020 along with rapid market expansion by enhancing direct and indirect sales channels for consumers, significant expansion for MVNE business, incorporating enterprise customers' new demands in M2M(*4) and IoT and more.
    • Security business for enterprise customers: intend to establish SOC(*5) business in addition to our security services line-ups. Pursue security service opportunities that meet the needs of individual industry and home as well.
  • Focus on new area such as content distribution business towards 4K transmission, M2M/IoT related business, further new development of overseas business, health care business in order to achieve sustainable growth.

We recognize there are various issues to achieve our middle term plan as follows: It is very important for our growth to develop and invest in services and businesses continuously as well as expand our ICT service line-ups in a timely and appropriate manner that meet demands of enterprise customers. Stronger cooperation between engineering and sales divisions is indispensable to realize it. For strong revenue growth, enhancement of enterprise sales forces both direct and indirect function is important. As for consumer business, expansion of sales channel as well as improvement of public recognition is important. We need to hire talented human resources and develop their skills continuously. Also we continue to reinforce management of business investment to improve our operating margin as well as revenue growth.

  1. (*1)Internet of Things (IoT) enables not only physical objects but any "things" connected to network to exchange information automatically.
  2. (*2)Network cloud services, a concept developed by IIJ, are outsourcing services such as network and security-related services provided to enterprises comprehensively. The revenue is the network services revenue except for cloud services revenue which is recognized under outsourcing services and data center services
  3. (*3)System cloud services, a concept developed by IIJ, are system infrastructure providing services such as cloud and data center services offered to enterprises comprehensively. The revenue is the sum of datacenter and cloud services under outsourcing and cloud services under systems operation and maintenance.
  4. (*4)Machine to Machine (M2M) enables devices connected to network to exchange information automatically and perform designated actions.
  5. (*5)Security Operation Center (SOC) is an organization in charge of monitoring network and equipment to detect and analyze network attacks and suspicious activities and implement counter attacks.

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