Make money doing the work you believe in
The more I talk to companies across sectors, the more I think that 🇯🇵 SIs and software companies at a certain scale will be the gatekeepers for AI in Japan and might experience something different vs RoW. At least for mid-sized companies and above. Some confirmation bias I certainly but since I wrote this, I've heard a few more interesting things:
- Several SI's I've talked to mentioned they're being asked to build AI solutions for their clients. The clients can be large and well-resourced but still struggle to build something themselves
-A surprising amount of customers in certain sectors (like manufacturing) still prefer On-Prem.
-SAP was trying to stop supporting ECC 6.0 by 2027 but they will provide maintenance till 2030 now. Only 50% apparently has migrated to S4/Hana
- Both software companies and it's customers are using AI to compensate not replace, for lack of engineers and/or rapidly increasing costs to hire them.
- So AI isn't displacing these software companies, its making them more efficient. And helping them create opportunities to develop AI driven solutions for clients.
- I'm seeing more friends who work in mid/large-sized firms are being restricted from using LLMs freely due to security/compliance.
- There's this weird dynamic that because SIs themselves are so capacity constrained versus demand, current customers will likely keep giving stuff to do to be a 'preferred' customer. Some SIs just see most of their growth coming from existing clients versus new ones.
-One SI said coding itself can be outsourced, but consulting/planning/designing/following up on a project is where they need human to human interactions. Though I think this would be for mid-size clients and above.
- Accountability is also an issue where these customers ultimately want someone to hold accountable that's not named claude, Gemini, Grok or Chat. Especially the case in sectors like pharma.
-Distribution, in an insanely fragmented market like Japan, can be a powerful moat. (and I'm not just talking about Software here)
Some food for thought...
