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Business Trends

Salesforce and Google invest in Japan startups

US tech companies give market a fresh look as cloud demand grows

Japan's public cloud services market, the fourth biggest in the world as of this year, is projected to more than double from the 2017 level to $13 billion in 2022.   © AP

TOKYO -- After years of passing Japan by, U.S. technology giants are seeking opportunities in the nation's fast-growing public cloud services market.

Salesforce said Wednesday that it has formed a $100 million fund through a venture capital investing entity of its Japanese unit to invest in emerging Japanese developers of cloud-based services. The value far exceeds its cumulative Japanese investment since first launching in the country in 2011, the California-based company said. The amount represents about 10% of its global spending of $1.2 billion.

Salesforce's move comes on the heels of investment by other American tech giants. Google said Tuesday that it has invested in Abeja, developer of an AI-powered system for analyzing customers' in-store behavior and of a product inspection system for manufacturers.

Amazon.com, meanwhile, opened AWS Loft, a hub for supporting developers, in Tokyo earlier this year, its third such location in the world.

Salesforce looks to invest in startups developing services that can be provided with its customer relationship management systems. In particular, the company is eyeing developers of cloud-based software for marketing, customer analysis and e-commerce systems.

The companies in its Japanese portfolio are all cloud-based developers, including accounting software company Freee and business card scanning and contact management service Sansan.

The announcement marks Salesforce's first fund in Asia. Japan is a leading destination for IT investment, where businesses quickly adopt new technologies, said John Somorjai, senior vice president. The CRM giant wants companies in the portfolio to also become partners in business, he said.

American companies had long overlooked Japan when it comes to investing, in a practice known as "Japan passing." Now they see opportunities in the strong growth of the tech industry here.

Japan's public cloud services market, the fourth biggest in the world as of this year, is projected to more than double from the 2017 level to $13 billion in 2022, predicts data company IDC Japan. Cloud-based software is gaining fans among understaffed small businesses that seek to enhance efficiency and among manufacturers pursuing "internet of things" technology.

For startups, becoming part of a major American tech player's ecosystem greatly boosts access to international markets.

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