News Releases

4/06/2000

Hitachi Data Systems Announces Strategic Global Transformation To E-Business Infrastructure Solutions Provider

Apr 6, 2000 08:25 AM

Empowers new Independent Business Units to speed delivery of IT solutions for the information age

New business model streamlines organization, places 80 percent of employees directly in front of worldwide customer base

SANTA CLARA, California, 6 April, 2000 — Hitachi Data Systems Corporation, a wholly-owned subsidiary of Hitachi, Ltd. (NYSE: HIT), today announced a comprehensive global transformation plan designed to increase revenue-generating opportunities for its customers, channel partners, alliance partners, and the entity itself, enabling all parties to better take advantage of the Internet economy.

Underscoring Hitachi, Ltd.’s medium-term business plan, the “i.e.HITACHI Plan*” disclosed late last year, Hitachi Data Systems Corporation is evolving from its traditional business model as strictly a sales and marketing arm for Hitachi, Ltd., to a new, more nimble cluster of autonomous business units that leverages its consulting skills as well as its expertise in selling high-tech products.

Dr. Jun Naruse, newly appointed CEO of Hitachi Data Systems, said, “Our future is tied to our customers and the knowledge we have to offer. By separating our hardware from the human talent, we are unleashing our underutilized capabilities and applying them in a more business-centric approach, rather than our traditional technology-centric approach. This will enable HDS to provide more value to our customers.

“HDS is changing in the same way that the market is changing: we are focused on e-business infrastructure solutions, storage networking solutions, information sharing, business continuity, and emerging market segments. In the midst of all this change, we’re still working hard to develop new platforms on which to base our business solutions. I know, for example, that customers will be excited to see the lightning-fast performance of our next-generation high-end storage system when we launch it later this year.”

Initial public reaction to the HDS strategic global transformation has been very positive.

“This is a very smart move for HDS,” said Carl Greiner, Vice President & Director of Enterprise Data Center Strategies at META Group. “The company is now better positioned to increase its worldwide presence and put more of its expertise into the hands of customers.”

“Under the new structure, HDS customers should receive even greater service and support,” said Kyle Tager, Manager of e-Government services at the CityofBoston.com. “The fact that the new business model places 80 percent of their employee resources directly in front of customers breaks new ground in today’s marketplace, and adds a fresh dimension to the term ‘customer relationship management.’”

Jack Scott, Managing Partner of the Evaluator Group, said, “This is a positive move for HDS. It strategically positions the company to increase market share, particularly in the rapidly growing area of storage solutions.”

Transformation & Leadership Details

As part of the global transformation, Hitachi Data Systems plans a workforce reduction of approximately 600 people, primarily at the corporate staff level. The company will provide outplacement counseling services and severance packages for the departing employees

With the new paradigm, Hitachi Data Systems Corporation will be divided into two independent companies: a platform-specific company called Hitachi Data Systems (HDS), under the direction of Dr. Naruse, and a platform-independent systems integration company, called Hitachi Data Systems Solutions (HDSS), which will be headed by Yoshihiro Koshimizu, former president and CEO of Hitachi Data Systems. Both will report to the Hitachi Data Systems Holding Company.

During Dr. Naruse’s 30-year career with Hitachi he has held a number of senior positions in engineering and manufacturing. He headed the Hitachi development team that created the original 2.5-inch Hitachi disk drive, which went on to capture a 20 percent worldwide market share in just three years. Most recently, he served as president of Hitachi’s 3,500-person storage division (STR), which included both manufacturing and R&D.

Dave Roberson, a 19-year veteran of Hitachi Data Systems, has been appointed COO of the newly restructured organization. During his tenure at Hitachi Data Systems, Roberson has held a number of senior positions in the company, including serving as CFO, Chief Business Officer, head of enterprise resources, and General Counsel.

Platform-Specific Independent Business Units

The formation of Independent Business Units (IBUs) marks a significant break from the past. Hitachi Data Systems Corporation is moving to a streamlined, more responsive structure that fosters a new spirit of entrepreneurism. Each business unit will ultimately have the ability to seek partners, develop products, and acquire funding independently.

By restructuring HDS, we are opening new channels, finding new ways to reach customers and sidestepping traditional competitors with a more nimble attack,” said Roberson. “We are pursuing new opportunities by forming Independent Business Units that will focus on specific opportunities in specific market sectors. And most important, we are focused on solutions; whether that solution entails implementing a heterogeneous, data-centric storage area network, providing configuration and distribution services, or adding value to another vendor’s product and reselling it, we will do whatever it takes to meet our customers needs.”

Roberson will have oversight of all six IBUs that comprise the platform-specific company of Hitachi Data Systems Corporation, including:

Platform Solutions, led by Ron Gervenack, responsible for delivering software, services, and storage area network (SAN) solutions to both direct and indirect channels; Platform Channels, also led by Ron Gervenack, will sell hardware through both direct and indirect channels; OEM Business Unit, led by Clive James, will work closely with Hitachi, Ltd.’s factories to move products into the marketplace using Hewlett-Packard as well as identifying and enlisting other potential OEM partners. The OEM Business Unit will establish successful commercial relationships and alliances with hardware and software suppliers and systems integrators; Customer Services, led by Regis Joly, will combine Logistics and Customer Service & Support into one organization whose global capability will allow it to take and place orders; configure, deliver, and install equipment; and maintain and upgrade products; IT Services, led by John Lovejoy, will build and operate computing infrastructures for multiple customers, including Internet Service Providers (ISPs), Application Service Providers (ASPs), and Storage Service Providers (SSPs). Other opportunities will include disaster recovery, electronic procurement, electronic markets, and high-availability computing architectures; Incubator Business Unit, led by Dave Rader, will focus on defined business projects in search of new products and services that fit into HDS IBUs.

In addition to forming the new Independent Business Units, Hitachi Data Systems has also restructured its worldwide sales force. All members of the sales team will be managed by executives in their own countries.

Hitachi Data Systems Solutions, the platform-independent company within Hitachi Data Systems Holding Company, will provide business consulting, application-layer services, and systems integration services. More details will be announced in May.

Hitachi Data Systems and Hitachi Data Systems Solutions are registered with the U.S. Patent and Trademark Office as a trademark and service mark of Hitachi, Ltd.

*Further information on Hitachi, Ltd.’s "i.e.HITACHI Plan"

For Media/Investor Inquiries, please contact:

Gerard F. Corbett
Hitachi America, Ltd.
Vice President
Corp. Communications Group
Tel:(650) 244-7900
Fax: (650) 244-7920
gerard.corbett@hal.hitachi.com

Takeshi Okamoto
Hitachi, Ltd., Tokyo
03-3258-2054
okamoto@cm.head.hitachi.co.jp

Masanao Sato
Hitachi, Ltd
03-3258-2056
syoujiki@cm.head.hitachi.co.jp

Terry Kubo
Hitachi America, Ltd.
Tel: (650) 244-7902
Tatsuya.kubo@hal.hitachi.com

1-800-HITACHI

If you have any questions specifically about Investor Relations in the United States, please contact our Investor Relations Department at investor.info@hal.hitachi.com