• The company recently held its inaugural HDS Analyst and Advisor Connect event in the US.
• On the impact of tariffs, HDS said some sectors such as education had been affected, and the company was monitoring the situation closely.
• According to the CEO, with the implementation of AI, raw headcount is not as important.
• HDS mentioned that it was already exploring ways to incorporate quantum computing into its existing portfolio.
  

Hitachi Digital Services (HDS) recently held its inaugural HDS Analyst and Advisor Connect event in Dallas. I attended the event along with several analysts, HDS executives and many of HDS clients and partners. It has been some time since I attended a Hitachi-affiliated company event, so it was good to get an update from their side.

For those not so familiar with Hitachi Digital Services, it is a wholly owned subsidiary of Hitachi which was formed in 2023. It operates as an independent systems integrator, powering mission-critical platforms with people and technology. It helps enterprises build, integrate and run physical and digital systems with tailored solutions in cloud, data, IoT and ERP modernization, underpinned by advanced AI.

Source: Hitachi Digital Services

The event kicked off with CEO Roger Lvin who attended a fireside chat with HDS AR head Patrick Corcoran to give an overview of the company and discuss some of the prevailing issues in the industry. Unsurprisingly, the issue of tariffs came up fairly quickly, with Lvin mentioning that he had seen an impact in some sectors such as education and that the company was monitoring the situation closely.

He was also asked about the impact of AI on the system integrator landscape, and I found his response interesting. Previously, the market was all about headcounts – having 250,000 employees would be an advantage over a competitor with 200,000 employees. But according to Roger, now with the implementation of AI, raw headcount is not as important. A critical mass is still relevant but as so much can be automated in the IT world, what is becoming more important is expertise. As parent Hitachi and HDS see themselves as “engineering and R&D first” organizations, Roger believes that their deep IT-OT expertise across the many verticals they cover is increasingly relevant in the AI era.

One major area of focus at the event was the Hitachi Application Reliability Centres (HARC) platform, which has been upgraded to incorporate GenAI workloads under a product known as ‘HARC for AI’. This solution was developed as many enterprises struggle with scaling GenAI applications, particularly in terms of cost and performance metrics. Also discussed was the company’s Reliable, Responsible, Observable and Optimal AI (R2O2.ai) solution which offers pre-built GenAI model blueprints for large enterprises to use along with a responsible AI compass and can be integrated with HARC for AI. I have seen many large enterprises try to develop such models in-house and this brings many challenges, so solutions like this are needed.

The rest of the event highlighted many use cases in areas such as IoT, cloud computing and overall digital transformation in industries where Hitachi and Hitachi Digital Services are known, such as pharmaceuticals, healthcare, logistics, manufacturing and telecommunications. Of particular interest to me was an update on the development of the new Hitachi Rail facility in Hagerstown, Maryland, which will significantly increase the company’s prowess in combining IT and OT technology in that sector.

One topic that I was not expecting to hear about and which I found particularly interesting was a discussion on quantum computing. Hitachi is a strong global player in the quantum computing space in terms of both hardware and software, so it was interesting to see HDS mention that it was already exploring ways to incorporate it into its existing portfolio. I think that this will be the next frontier for enterprise IT solutions as quantum computing has massive implications for industries such as logistics, materials science and drug discovery. I look forward to hearing more about this going forward.

Overall, the event was a great chance for me to get an update on how the SIer world is changing in the face of the AI era. It is clear that HDS is one of the companies preparing for the massive changes that are coming.