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Company Brief
NEC

by Brady Hicks

Copyright 2021, Faulkner Information Services. All Rights Reserved.

Docid: 00014703

Publication Date: 2101

Report Type: VENDOR

Preview

NEC is a Japanese conglomerate that manufactures computer systems, networking
components, semiconductors, application software, mobile platforms, and display
systems, among other products. The company has almost 113,000 employees
(2020) and operates 300 group companies, worldwide. NEC organizes its operations into Public
Solutions, Public Infrastructure,
Enterprise, Global, System Platform, and Network Services business units. This brief examines
NEC in greater detail.

Report Contents:

• Fast Facts
• Description
• Key Executives
• Major Products
• Major Competitors
• Recent Activity
• Financials

Fast Facts

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Name: NEC
Headquarters
5-7-1, Shiba, Minato
Tokyo 108-8001, Japan
+81-3-3454-1111

Fax: +81-3-3798-1510
Web:
http://www.nec.com/
Type of Vendor:
Telecom Equipment, IT, Electronics, Appliances
Employees (including subsidiaries):
112,638 (2020)
Founded:
1899 (Nippon Electric Company)
Service Areas: Worldwide
Stock Symbol: 6701  (Tokyo Stock Exchange)

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Description

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NEC is a Japanese IT products and services provider that focuses on
orchestrating a brighter world. This Tokyo-based, multi-national conglomerate
manufactures computer systems, network equipment, semiconductors, application
software, mobile platforms, and display systems, among other types of products.
The company has nearly 113,000 employees across 300 group companies (2020).

NEC seeks to advance
social infrastructure by leveraging ICT (information and communications
technology) across five business models, as listed in Table 1.

NEC also operates separate regional companies such
as NEC Corporation of America, NEC Europe, NEC Asia Pacific, NEC Latin America,
and NEC (China).

Strategy

NEC aims for sustained growth for society and business through efforts to
increase its corporate value, practice the "NEC Way," and bring satisfaction to
all stakeholders, including investors, customers, communities, and employees.
The company’s strategy is to be a leading global company that "leverages the power of
innovation to realize an information society." The company focuses on "Orchestrating a brighter
world" that is "committed to creating social value"; offering "Solutions
for Society"; and utilizing ICT (information and communications technology).
Individual business strategies include:

• Public Solutions – Provide IT and network systems for local
  governments and medical institutions, and also oversee local branches
  across Japan to develop business with close ties to each region.
• Public Infrastructure Business – Provide social
  infrastructure that allows for everyone to have a safe and comfortable
  lifestyle, in the form of large-scale mission critical systems and
  network systems for governments, governmental agencies, local
  governments, broadcasting stations, and power companies.
• Enterprise Business – Develop cutting-edge technology and promote
  co-creation with customers in order to connect people, goods, and processes,
  reaching across the boundaries between enterprises and industries to create
  new value across the entire value chain.
• Global Business – Utilize cutting-edge technology such as AI and
  IoT in order to contribute to realizing a safe, secure, efficient, and equal
  society, as well as for solving social issues.
• System Platform Business – Establish platforms
  utilizing NEC strengths such as AI (artificial intelligence), IoT (Internet
  of Things) image analysis, and cybersecurity, and contribute to solving
  customers’ issues.
• Network Services Business – Leverage the network strengths and
  capabilities cultivated in the telecom carrier market across to other
  industry sectors, including service providers, manufacturers, distribution
  and service industries, and government agencies.

History

NEC has its roots in the Nippon Electric Company,
which was established in 1899 as part of a joint venture between a group of
Japanese investors and Western Electric. Key moments in the company’s history
include:

• 1899 –
  Is founded as an importer of telephone equipment.
• 1925 – Sees Western Electric relinquish its stake.
• 1949 – Offers its first IPO.
• 1963 –
  Establishes Nippon Electric New York, which is now known as NEC Corporation
  of America.
• 1983 –
  Is renamed as “NEC.”
• 1995 – Acquires a 20% stake in Packard Bell, later merging the majority of its PC
  business unit with it to form “Packard Bell NEC.” This unit is
  ultimately dropped.
• 2000 – Begins a restructuring initiative whereby it
  is divided into several
  self-governed units.
• 2001 – Spins off Eulix Networks to sell DeltaX switches.
• 2002 –
  Spins off NEC Electronics.
• 2003 – Helps establish the CE Linux Forum.
• 2004 – Introduces a facial-recognition algorithm to verify a person’s identity
  regardless of pose or background quality.
• 2005 –
  Files a European Commission complaint against QUALCOMM over alleged
  anti-competitive conduct in the licensing of patents for 3G mobile
  technology.
• 2006 – Sells its Packard Bell subsidiary.
• 2007 –
  Merges the NES Solutions Group with the NEC Software Development Group to
  form Systems Integration and Software Development.
• 2009 –
  Consolidates NEC Corporation of America, NEC Unified Solutions, and NEC Infrontia as NEC Corporation of America.
• 2010 –
  Announces a streamlined organizational structure that includes segments for
  IT Services, Platforms, Carrier Networks, Social Infrastructure, and
  Personal Solutions.
• 2011 –
  Establishes a joint venture, with Lenovo, to create PCs.
• 2012 –
  Announces plans to lay off approximately 10,000 employees worldwide.
• 2013 – Appoints Shinsuke Takahashi as President and CEO, NEC Corporation of
  America.
• 2014 –
  Acquires A123 Energy Solutions for $100 million to expand its smart energy business’ energy
  storage capability.
• 2015 – Unveils its new “Orchestrating a
  Brighter World” brand
  statement.
• 2016 – Announces that Takashi Niino will take over as President and
  CEO, and that Nobuhiro Endo will become company Chairman, both effective in
  April … Establishes its “NEC the WISE” brand for AI (artificial
  intelligence) technology.
• 2017 – Announces plans to revise its business segments
  in 2018, including Public (Public Solutions and Public Infrastructure);
  Enterprise; Telecom Carrier; System Platform; and Other (Global, System
  Integration, Services, Engineering, and all other areas of business) …
  Also merges Corporate Sales and Sales Operations in Japan with its Public
  unit, and transfers its financial institutions business to the Enterprise
  unit.
• 2018 – Reveals plans to acquire IT services firm
  Northgate Public Services … Reveals plans to streamline its workforce by
  3,000 to improve its profit structure.
• 2019 – Acquires KMD Holding at a $1.22 billion
  investment … Announces a new organizational structure that includes the
  Public, Enterprise, Network Services, System Platform, and Global segments.
• 2020 – Works with Fujitsu and NTT DOCOMO to establish carrier
  aggregation using 5G bands in a multi-vendor RAN (radio access network).
• 2021 – Sees Northgate Public Services enter into an agreement to
  purchase Charter Systems.

Key Executives

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NEC’s current executive structure includes:

President and CEO: Takashi Niino

Chairman:
Nobuhiro Endo

Chiefs include:

• CFO: Takayuki Morita
• CDO:
  Chikara Ishii
• CTO:
  Motoo Nishihara
• CIO and CISO:
  Hiroshi Kodama
• CHRO: Hajime Matsukura
• CMO: Makoto Enomoto
• CLCO: Shinobu Obata
• CSCO: Shigeki Shimizu

Group Presidents include:

• Global: Akihiko Kumagai
• System Platform:
  Tomoyasu Nishimura
• Public Infrastructure:
  Noritaka Taguma
• Network Services: Atsuo Kawamura
• Public Solutions: Chikara Nakamata
• Enterprise:
  Kazuhiro Sakai

Major Products

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NEC tends to focus on offering computers, data storage options, embedded
systems, fiber optic devices, integrated IT infrastructure, network products,
and software, as detailed in Table 2.

Major Competitors

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NEC has many different competitors, both domestic
and overseas, ranging from large, multi-national corporations to small,
rapidly-growing, specialized companies. These include:

• Cisco Systems: http://www.cisco.com/
• Dell Technologies:
  
  https://www.delltechnologies.com/en-us/index.htm
• Fujitsu: http://www.fujitsu.com/
• Hewlett Packard Enterprise:
  http://www.hpe.com/
• Hitachi: http://www.hitachi.com/
• IBM: http://www.ibm.com/
• Toshiba: http://www.toshiba.com

Recent Activity

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NEC’s past-year activity has included:

• January 2021 – Supports the 100Gbps Palau Cable 2 submarine cable
  … Sees Northgate Public Services enter into an agreement to purchase
  Charter Systems.
• December 2020 – Collaborates with the government of Bihar, India
  to develop preventative healthcare technology … Completes a flagship
  optical submarine cable system to connect Chennai, India and the Anaman &
  Nicobar Islands … Collaborates with Osaka Unviersity’s Cybermedia Center
  to introduce a cloud-linked HPC and HPDA supercomputer system …
  Establishes an Open RAN laboratory in India.
• November – Launches Open RAN Center of Excellence in London …
  Transfers and leases housing at the Sagamihara Plant in Kanagawa, Japan, to
  Hulic … Builds a "confidential" computing system that employs Intel SGX
  technology and the Fortanix Confidential Computing Enclave Manager.
• October – Acquires Swiss financial software company Avaloq Group.
• September – With Fujitsu and NTT DOCOMO, announces carrier
  aggregation using 5G frequency bands in a multi-vendor RAN (radio access
  network) … Partners with OBAYASHI, Japan Industrial Partners, Japan
  Investment Advisor, ITOCHU Techno-Solutions, and AOI Fund 1 to establish the
  BIRD INITIATIVE for business innovation powered by R&D.
• August – Sees Bangsoft enter into an agreement to acquire
  software firm Concent.
• July – Teams with Toshiba and other companies to establish R&D
  activity with the Global Quantum Cryptography Communications Network …
  Collaborates with Realeyes to develop and distribute emotion analysis
  technology … Appoints Ikuo Matsuhashi as Corporate Executive … Partners
  with SITA to develop joint technology for airports … Previews new
  organizational structure, including revision of its operations into six
  segments.
• June – Teams with NTT to establish capital and business alliance
  for joint R&D … Was selected to construct a 9,400-kilometer undersea cable
  connecting China, Japan, the Philippines, Singapore, Thailand, and Vietnam.
• April – Established a global strategic partnership with
  Intermedia to launch NEC UNIVERGE BLUE CONNECT, an integrated UCaaS (Unified
  Communications-as-a-Service), and UNIVERGE BLUE ENGAGE CCaaS (Contact
  Center-as-a-Service) … Unveils the NUC 9 Extreme Kit.
• March – Combines NEC Display Solutions with Sharp as a joint
  venture … Collaborates with Konica Minolta to promote digital
  transformation technology … Collaborates with Siemens on IoT (Internet of
  Things) technology for monitoring and analysis … Demonstrates real-time
  digital wireless OAM (orbital angular momentum) mode multiplex radio
  transmission and bi-directional, 10Gbps outdoor transmission.
• February – Aligns with Cisco to strengthen processes for
  confirming network equipment authenticity … Partners with Accedian to
  focus on providing advanced performance-monitoring, analytics, and network
  visibility services.

Financials

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Table 3 compares NEC’s overall financial performance
for the recent past fiscal years.

About the Author

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Brady Hicks is an
editor with Faulkner Information Services. He writes about computer and
networking hardware, software, communications networks and equipment, and the
Internet.

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