TOKYO -- Hitachi is forming a new U.S. company tasked with managing businesses at the intersection of hardware and data in an effort to compete with General Electric and Siemens for a bigger piece of rising global infrastructure demand.
The Tokyo-based conglomerate will merge information technology unit Hitachi Data Systems and data analytics company Pentaho on Wednesday to form Hitachi Vantara. The new California-based company will be entrusted with expanding Hitachi's "internet of things" operations to over 130 countries and oversee roughly 7,000 employees, or a third of the conglomerate's IT personnel.
Vantara will be responsible for linking IT teams in Japan, China, India, Europe and elsewhere to develop new services and create proposals for clients in markets around the world from Silicon Valley. The reorganization allows Vantara to give orders across departments and group companies.
The company will use proprietary artificial intelligence technology and sensors to provide products and services for infrastructure as well as manufacturing and logistics. One such application could be analyzing the flow of people in a train station to devise ways for avoiding rush-hour congestion and keeping trains on time.
Hitachi's internet of things services are geared toward infrastructure, including traffic, energy and "smart city" projects. Rival industrial groups GE and Siemens, on the other hand, are more focused on systems for large-scale industrial equipment that perform tasks like diagnosing signs of trouble. With Vantara, Hitachi seeks to accentuate its comparative advantages.
Hitachi invests about 100 billion yen ($897 million) a year in internet of things operations to acquire related ventures, AI specialists and other talent. Hitachi Data Systems and Pentaho alone increased hiring by 1,000 people last year. The new company will continue to expand the ranks by several hundred people annually going forward.
The Japanese group is targeting 1.05 trillion yen in sales related to the internet of things for fiscal 2018, a 20% rise from fiscal 2016.