Sakura Internet

Basic Information

Stock Code
3778
Industry
Information and Communications
Category Detail
Systems & Software
Prefecture
Osaka Prefecture
Establishment Year
August 1999
Listing Year
October 2005
Official Website
https://www.sakura.ad.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
DeNA, Kioxia Holdings, Axelmark, GMO Pepabo, Sakura Internet, GMO GlobalSign Holdings, Aiming, Terrasky, Change Holdings, Amiya, Source Next, Borudorua, Flect, Server Works, ID Holdings, GMO Internet, Japan Business Systems, Fujikura, Horiba, Socionext, Seiko Epson, Sony Group, Advantest, Mitsubishi Heavy Industries, IHI, Nintendo, Sanrio, KSK

Overview

Sakura Internet is a pioneering company founded in 1999 in the information and communications industry, centered on data centers, hosting, and cloud services, boasting one of the largest backbone networks in Japan.

Current Situation

Sakura Internet recorded net sales of approximately 22.1 billion yen, operating income of approximately 1.3 billion yen, and net profit of approximately 700 million yen for the fiscal year ended March 2021. Its main businesses are hosting server operations and data center management, establishing a solid revenue base. It possesses one of the largest backbone networks in Japan and advanced seismic and disaster-resistant facilities, serving a wide range of customers from government agencies to corporations and individuals. It also develops online media and cloud infrastructure, continuing technological innovation. In 2023, it was selected as a government cloud provider for the first time among Japanese companies, with its reliability and technology highly evaluated. Sustainability is ingrained in its corporate culture, promoting fully remote work and regionally decentralized management. Moving forward, it aims to expand services through new data center developments and strengthen its business by leveraging cutting-edge technologies such as generative AI.

Trivia

Interesting Facts

  • Founder Kunihiro Tanaka started the business while attending Maizuru National College of Technology.
  • Pioneer in offering rental server prices as low as a can of juice.
  • The Ishikari Data Center has seismic resistance up to intensity 7.
  • After exiting online game business, specialized in cloud and continued growth.
  • Gaining attention as a central player in the generative AI utilization consortium.
  • Transitioned from TSE Mothers to Prime Market after listing.
  • Head office in Osaka, with management policy avoiding concentration in Tokyo.
  • Known as a pioneer in promoting full remote work.
  • Proven record of continuing operations for about 60 hours with emergency generators during major power outages.
  • Main shareholder Sojitz holds approximately 29%.
  • Supports from individuals to large enterprises with diverse contract plans.
  • Operates various online media in-house for information dissemination.
  • Rare example permitting publication of adult content in creative works.
  • Government-designated provider contributing to promoting cloud utilization in public offices.
  • Provides services maintaining backup systems even during disasters.

Hidden Connections

  • Subsidiary Gehirn operates disaster prevention apps, contributing to regional disaster prevention.
  • Capital alliance with Sojitz provides support from a major general trading company.
  • Past online game operation technology utilized to strengthen cloud infrastructure.
  • Provides free Wi-Fi at annual music events around the Ishikari Data Center.
  • President resides in Okinawa, embodying remote management.
  • Proven track record of adoption for initial infrastructure of multiple famous startups.
  • Plays a central role in the Safer Internet Association.
  • Disaster-time operation know-how serves as a benchmark for data centers nationwide.

Future Outlook

Growth Drivers

  • Rapid expansion of cloud service demand
  • Government and public institutions' DX promotion plans
  • Increase in development of generative AI and AI utilization services
  • Growing demand for regionally decentralized IT infrastructure
  • Rising needs for security enhancements
  • Further proliferation of 5G and IoT services
  • Increased server demand from remote work promotion
  • Growth in sustainability-related services
  • Revenue growth from diverse online media expansions
  • Vibrant startup market and support needs
  • Expansion of hybrid business with public clouds
  • Technological innovation through strengthened global collaborations

Strategic Goals

  • Sustain data center utilization rate above 95%
  • Expand share in government cloud market
  • Monetize and expand generative AI utilization services
  • Improve power efficiency toward achieving a decarbonized society
  • Achieve over 90% employee retention rate through satisfaction improvements
  • Establish next-generation data centers in major cities nationwide
  • Equip cloud platforms with advanced security standards
  • Flexible services responding to diverse customer needs
  • Provide seamless hybrid cloud environments
  • Strengthen collaborations with regional communities and expand CSR activities

Business Segments

Data Center Operations

Overview
Large-scale, high-reliability data center operation services accommodating diverse customer needs.
Competitiveness
High disaster risk response capabilities including seismic resistance and uninterruptible power supplies.
Customers
  • Government Agencies
  • Financial Institutions
  • IT Companies
  • Manufacturing
  • Educational Institutions
  • Media Companies
  • Large Retailers
  • Startups
  • Medical Institutions
  • Game Development Companies
Products
  • Housing Services
  • Dedicated Servers
  • Cloud Infrastructure
  • Network Management
  • Security Services
  • Disaster Prevention Facilities
  • Backup Services
  • Data Recovery Support
  • Operation Monitoring
  • Network Design

Hosting Services

Overview
Provides high-quality, low-cost, stable hosting environments to support diverse businesses.
Competitiveness
One of the largest network bandwidths in Japan and advanced security.
Customers
  • Small and Medium Enterprises
  • Startups
  • Individual Bloggers
  • EC Operators
  • Advertising Agencies
  • Educational Organizations
  • Medical-Related Businesses
  • Creators
  • Game Developers
  • Local Governments
Products
  • Rental Servers
  • Dedicated Servers
  • VPS
  • Cloud Hosting
  • Domain Management
  • Email Hosting
  • SSL Certificate Provision
  • Web Application Environments
  • Backup Services
  • Technical Support

Cloud Service Provision

Overview
Provides flexible, highly scalable cloud platform services to support DX initiatives.
Competitiveness
High-performance data centers and extensive API integrations.
Customers
  • Mid-Sized Companies
  • Large Corporations
  • Educational Institutions
  • IoT Businesses
  • Game Operators
  • AI Developers
  • Research Institutions
  • Advertising Industry
  • Media Companies
  • Startups
Products
  • IaaS Cloud
  • API Services
  • Database Services
  • Load Balancers
  • Object Storage
  • Firewalls
  • Container Platforms
  • Machine Learning Support Environments

Disaster Prevention and IT Solutions

Overview
Provides IT solutions in the disaster prevention field leveraging its subsidiary.
Competitiveness
Specialized disaster prevention technology and operational expertise.
Customers
  • Local Governments
  • Public Interest Groups
  • Educational Institutions
  • Corporations
  • Disaster Prevention Organizations
Products
  • Disaster Information Apps
  • Emergency Contact Systems
  • Cloud Monitoring Services

IT Infrastructure Construction and Maintenance

Overview
Comprehensive support services from IT infrastructure construction to operations for customers.
Competitiveness
Extensive track record and technical support system.
Customers
  • Large Corporations
  • Small and Medium Enterprises
  • School Corporations
  • Public Institutions
  • Medical Corporations
Products
  • Network Design
  • Server Construction
  • System Operation and Maintenance
  • Security Measures
  • Cloud Migration Support

Online Media Operations

Overview
Operates its own media disseminating IT technology information and case studies.
Competitiveness
Industry expertise and in-house content production capabilities.
Customers
  • Corporate Users
  • Engineers
  • Marketing Staff
  • General Users
Products
  • IT Information Sites
  • Technical Sharing Platforms

Competitive Advantage

Strengths

  • Possesses one of the largest backbone networks in Japan
  • Equipped with high seismic resistance and uninterruptible power supply facilities
  • Wide range of hosting services
  • Trusted by government agencies and corporate customers
  • Flexible work style promoting full remote work
  • Long track record and trust in the market
  • Proven track record of selection as government cloud provider
  • Diverse customer base and multiple sales channels
  • In-house development and operation of online media
  • High technical capabilities and operational know-how

Competitive Advantages

  • Ability to provide high-quality services at low prices
  • Flexibility and efficiency from regionally decentralized management
  • Reliability from large-scale data centers
  • Equipped with power facilities capable of continuing during disasters
  • Brand power from early entry into the internet nascent period
  • Diverse hosting service lineup
  • Abundant network bandwidth and connection points
  • Strong sales foundation with government and public institutions
  • Active initiatives in generative AI utilization
  • Customer support linked with online communities

Threats

  • Intensifying competition from major global companies in the cloud market
  • Sophistication of data security threats
  • Operational risks to centers from natural disasters
  • Increased burden of equipment renewal investments due to technological evolution
  • Intensifying competition for talent and shortage of engineers
  • Declining profit margins due to price competition
  • Increased compliance costs from regulatory and personal data protection enhancements
  • Risk of impact on users from cyber attacks
  • Need to adapt business to changing market needs
  • Risk of suppressed IT investments due to domestic economic stagnation

Innovations

2023: First Selected as Government Cloud Provider

Overview
Selected for the first time as a Japanese company to provide government cloud.
Impact
Expansion in public sector business and enhanced reliability

2023: Participation in Generative AI Utilization Consortium

Overview
Formed and participated in an industry-academia-government consortium to promote generative AI technology utilization.
Impact
Acceleration of service innovation and strengthened competitiveness

2022: Expansion of Ishikari Data Center in Hokkaido

Overview
Implemented network enhancements and facility expansions for large-scale data center.
Impact
Improved processing capacity and maintained high reliability

2021: Enhanced Cloud Service Functions

Overview
Launched cloud platform with strengthened API integrations and added security features.
Impact
Support for corporate DX and improved customer satisfaction

2020: Promotion of Full Remote Work System

Overview
Introduced nationwide decentralized work system to strengthen recruitment of excellent talent.
Impact
Improved work-life balance leading to higher employee retention

Sustainability

  • Energy-efficient data center operations to reduce environmental impact
  • Support for disaster prevention activities through collaboration with local communities
  • Promotion of diverse work styles with remote work system
  • Efficient resource utilization leveraging digital technology
  • Ongoing implementation of customer data security enhancement measures
  • Investment plans aimed at building sustainable IT infrastructure
  • Expansion of public information dissemination to communities
  • Initiatives to reduce waste and promote recycling
  • Promotion of paper usage reduction through cloud services
  • Introduction of energy-efficient hardware
  • Strengthening regional employment creation and collaboration with local companies
  • Enhanced transparency through CSR reports