Innoboard: There is no consistent definition of innovation. Every industry and every department perceive it and react differently. How would you define innovation as Chief Technology Officer at Fujitsu Europe, Middle East, India and Africa?
Dr. Joseph Reger: Nor do we need one, that’s my personal view. Innovation is supposed to produce something new for the company. In what sense, what depth, how radical and how transformative a piece of innovation can or must be, this will vary not just between companies but between departments of a single company, too.
My definition adds one particular aspect that is not explicitly contained in the Latin word “innŏvātĭo”: I expect innovation to bring about not just something new, but something better, too! It must produce an improvement and one that’s measurable. Every innovation effort costs money and therefore it is indispensable that the results are measurable. Otherwise the support, the financial support as first, will fade away. Our innovation efforts are checked against these criteria first:
In your opinion, what are the greatest opportunities for using artificial intelligence (AI) at Fujitsu? What are enabling technologies?
Let me extend the question and take the parts in turn.
First: what are the opportunities at Fujitsu?
Fujitsu is a big company with diverse operations across the globe. We have manufacturing facilities, data centers etc. AI and machine learning possess the same significance for us, as for our customers: we would like to optimize and better connect parts of our manufacturing and data center operations (to stay with those examples), just as our customers do. We would like to redefine our value chains, too and are interested to create new ecosystems around our capabilities and offerings, too. It gets even better: in some cases we would like to connect and integrate our operations with that of our customers! And we do most of that already! We are using machine learning in various forms to improve factory operations and reach unprecedented levels of availability and utilization.
We are using AI to reduce the total amount of heat produced by a data centers and manage load with the help of machine learning, just to mention a few examples. Our advantage: we develop the algorithms, routines and packages as needed, making sure that they are fit for practical (and pragmatic) use.
Second: what are the opportunities with Fujitsu?
Our customers use everything we have but also can work with us to create something new, something particularly suited to their needs. We call this methodology “co-creation”. Given the areas of expertise, the business ideas, the business innovation (all the way up to business model innovation) typically come from the customer. Fujitsu’s contribution is the technology part: we bring (and create, if needed) new technologies and make them work. We don’t just innovate and integrate, we implement and operate the infrastructure, if the customer is interested. This makes us an innovation partner that’s very easy to work with.
Third: what are the enabling technologies?
Some are clear, mostly in the infrastructure part: a cloud platform, internet technologies, including internet of things (IoT) technologies, machine learning and artificial intelligence, security technologies and business analytics capabilities. We do work with partners and maintain strategic alliances for a full portfolio. But we do have our own development capabilities and offerings in all those areas, too, because we are a technology company at heart. We like to tell our customers that they need not worry about the technology side, we take care of that.
In what kind of business will AI play a major role at Fujitsu: services or products? What are the main advantages for consumers and business clients?
We have a very sizeable product business and products are important for AI (e.g. the training phase of any neural network for machine learning is quite a challenge to compute power). However, AI solutions are best delivered as services, that’s our experience. There is always a little something that needs adjustment, special treatment, optimization. Packaging AI solutions as service offerings (they may include substantial product parts, too) is the most beneficial delivery mechanism for both, the customer and for Fujitsu. A classical win-win situation. That is the main advantage for our business customers. Fujitsu does not directly address the consumer market in Europe, but our partners do. We work with our partners to enable them. Arguably though, it is the consumers who will see the most stunning benefits of AI in the near future. I’d like refer to the plethora of books and articles detailing how the life of a consumer will change for the better by the use of AI.
AI will enable new value propositions and new ways of value creation and value capture. In what way will the business model of Fujitsu change due to these developments?
We have discussed our methodology of co-creation above. In many cases, customers are interested to not just co-create, but also co-fund, co-finance and co-benefit! Revenue and/or profit sharing models are a natural consequence of co-creation. This desire, this “shareconomy” will have profound consequences on the business models of services companies, including Fujitsu.
What are your own personal goals regarding innovation for the next 12 months?
I’d like to concentrate on just two main areas: IoT (internet of things) and AI. We as a company need a tremendous boost in these areas. To expedite that I run the Fujitsu Distinguished Engineers (FDE) program, a merit based scheme to reward our best employees in technical areas. Currently we have about 200 FDE-s. With their help, we will be able to innovate at a higher speed in those vital areas.
Dr. Joseph Reger joined Fujitsu in 1998 as head of technology marketing, having previously been executive consultant and chief IT architect at IBM. Today he is responsible for predicting and making sense of IT market trends that will benefit the supplier’s customers most, and for implementing them in its strategy. Reger is an academic by trade, with a PhD from the University of Cologne in Germany, he has worked in the fields of theoretical physics and computer sciences at institutions in Europe and the US. He spent three years as a visiting scientist at the University of California at Santa Cruz, engaged in the interdisciplinary research of complex systems.
This interview was first published at Innoboard, a leading Innovation blog with a European perspective.