Japan Digital Agency Adds Domestic Firm to U.S. Tech Giants as Provider of Government Cloud Services

The Yomiuri Shimbun

21:00 JST, November 28, 2023

The Digital Agency has chosen a Japanese tech firm for the first time as a provider of government cloud services to go along with the U.S. tech giants used so far.

The announcement Tuesday said that Sakura Internet Inc. was tapped on the condition that the Osaka-based firm would be able to meet all requirements for selection, including data storage, by the fiscal year ending March 2026.

“For the first time, the possibility of a domestically produced government cloud has emerged,” digital minister Taro Kono said at a press conference in Tokyo. “Without doubt, I want them to do their best.”

The government cloud services help manage personal information and other data held by municipalities.

Sakura Internet was established in 1999 and is listed on the top Prime section of the Tokyo Stock Exchange. The company is expected to start providing cloud services in the second half of fiscal 2025.

Up to now, the government cloud providers selected are four U.S. companies, including Microsoft Corp. and Oracle Corp.

As cloud services are becoming increasingly important for economic security as essential infrastructure for data management, there are strong calls for fostering domestic production.

In September, the agency revised its selection process to introduce domestically made products into the government cloud. The revision allows the use of other companies’ services to fulfill the selection requirements, which previously had to be provided by a single company. In addition, the revised process now mandates that all requirements be met by the end of fiscal 2025.

After the revision, domestic companies such as Tokyo-based Internet Initiative Japan Inc. (IIJ) and SoftBank Corp. also applied to provide government cloud services. The agency has been reviewing the proposals from the companies since mid-October.