Cloud computing providers Zendesk and Tokyo-based Cybozu have announced a strategic partnership to integrate and market each other’s products in the U.S. and Japan. The deal underscores the rapidly growing adoption of cloud computing in Japan, and is also a potential harbinger of further product integrations between software-as-a-service companies based in different countries.
The agreement means that Cybozu will market Zendesk’s customer service software to businesses in Japan, while Zendesk will promote Cybozu’s cloud platform for business collaboration to its U.S. customers. The two companies will also develop integrations with each other’s platforms. Zendesk and Cybozu will officially launch their joint marketing efforts at the cybozu.com conference on cloud computing in Tokyo this Friday and their joint product integration is expected to begin later this year.
Founded in 2007 and headquartered in San Francisco, Zendesk has received funding from Charles River Ventures, Benchmark Capital, Goldman Sachs, GGV Capital, Index Ventures, Matrix Partners and Redpoint Ventures. Cybozu was founded in 1997 and is listed on the First Section of the Tokyo Stock Exchange.
The partnership will help the two companies accelerate their global expansion. Cybozu, the top collaboration software in Japan in terms of market share, recently entered the U.S. Meanwhile, Zendesk opened its first office in Tokyo earlier this year. Zendesk now has 30,000 customers in 140 countries, who use its software to provide customer service to more than 200 million people. Cybozu has more than 60,000 customers, most based in Japan. The company released kintone, a cloud-based collaboration software application, in the U.S. in July 2013, and its business cloud platform, called cybozu.com, has had more than 5,000 business installations since its release in 2011.
Mikkel Svane, founder and CEO of Zendesk, says his company’s partnership with Cybozu will allow it to take advantage of rapid growth in Japan’s cloud computing industry, which has benefited from government support.
“We’ve seen the government actively trying to legislate and make it more attractive for companies to move to the cloud, so you’re seeing the beginning of a kind of movement in Japan, which will definitely accelerate the adoption of cloud software,” says Svane.
According to a study by U.S. software developer Parallels, cloud service market for SMBs in Japan grew 25% over the past year to $2 billion in summer 2013, and will reach an estimated $3.1 billion by 2016. The fastest growing category is cloud-based business applications, which are expected to increase 21% year-over-year in Japan, reaching $1.5 billion by 2016.
Though Japan was a relatively slow adopter of cloud computing, Ken Aoyama, chief global business officer at Cybozu, says enterprises have become more receptive to the technology over the past two years. Factors spurring interest in cloud computing among Japanese users include strong data privacy laws; the popularity of cloud-based social media platforms like Facebook, Mixi and Twitter; the migration of Japan’s postal service to the cloud after implementing Salesforce.com software; and the rebuilding of IT infrastructure 2011 earthquake.
Cybozu recently closed deals with social gaming company DeNA and a telco company that has 10,000 employees. “A few years ago, customers were concerned about cloud security, but they don’t ask me about that anymore. Now they ask about feature differentiation,” Aoyama says. “There are more customers in Japan migrating to the cloud, not just SMBs, but also big enterprise customers.”
Svane adds that the deal between Zendesk and Cybozu continues “a relatively young tradition among cloud companies in the U.S. of working tightly together.”
“We work very closely with companies like MailChimp, SurveyMonkey and HootSuite,” says Svane. “We do that because we share similar philosophies, similar platforms, similar Internet-driven open architecture and the same market approach. We’ve seen over the last two to three years a new generation of cloud-based Internet software companies working together on that premise.”
Photo by Toshihiro Oimatsu