Title
Inaugural Cybozu Shareholders HQ Meeting - Focus on a Staff Conference Reflecting
Cybozu’s Open and Flat Organization and Advice from Shareholders
Summary
The following is a transcript of the content of Part 1 of the 2022 Cybozu Shareholders
HQ Meeting held on March 5, 2022.
Speakers
Yoshihisa Aono, Representative Director & President, Cybozu, Inc.
Keita Kuriyama, General Manager of Sales Division and Business Strategy Office,Cybozu, Inc.
Teppei Sato, General Manager of Development Division, Cybozu, Inc.
Yumika Nakane, General Manager of Human Resources Division and Legal &Compliance Division, Cybozu Inc.
Tadamasa Hayashi, General Manager of Corporate Affairs Division, Cybozu, Inc.
Tamotsu Hayashida, General Manager of Business Marketing Division, Cybozu, Inc.
Osamu Yamada, General Manager of Organization Strategy Office, Cybozu, Inc.
Transcript
What is a Shareholders HQ Meeting?

Yoshihisa Aono ("Aono" below): Welcome to today’s meeting. My name is Yoshihisa
Aono, President of Cybozu, Inc. First of all, I would like to thank you for joining us today
at the Cybozu Shareholders Meet-up, or rather our Shareholders HQ Meeting. Althoughwhen I say, “joining us,” my hope is that you will also participate.
Our practice until last year, was to hold what we called our “Shareholders Meet-up,” anevent that shareholders were able to attend in a passive capacity. Since then, we haverevised our plans in response to feedback from within the company that shareholders
should be able to participate more actively in proceedings, more like what happens at
an internal meeting. The outcome of that is today’s inaugural Cybozu Shareholders HQ
Meeting.
As you can see in the slide, Cybozu is made up of a number of divisions. We holdmeetings on a regular basis and our practice is to open up important meetings to all
employees, thereby providing everyone with an opportunity to contribute and express
their views.
What we have now decided is to extend this practice to involve our shareholders also
by opening up our internal meetings to you and seeking your participation. Which is tosay, today’s meeting will proceed just like a typical Cybozu internal meeting. I hope you
will join in under your new employee designation of “shareholder.”How to Register Your Advice

Aono: We will begin today's program with a review of six of Cybozu's divisions and theirplans for this year. In Part 2, we will deal with the topic of corporate governance, with a
discussion of governance by our internal and outside directors and other management.
The intention is for you to be able to observe these proceedings.
The key objective today is not just that you will have the opportunity to learn somethingworthwhile but also that you are able to register your participation using the QR codeon the slide and provide us with your feedback and advice.
The key to the success of today’s event will lie in our receiving a large amount ofadvice. You may, for example, acknowledge the effort we have been putting in, but feelthere are things we could be doing better, or you may have advice on other factors toconsider in corporate governance, or other ways of doing things. This is why I strongly
urge you to register using the QR code.
Today's ParticipantsAono: These are the participants in today's Shareholders HQ Meeting. They include
myself and six general managers. I have also invited Yukio Ohtsuki, Manager of the
Corporate Branding Department, to serve as facilitator, and we will be joined for Part 2of today’s meeting by the two nominees for outside directorships.

Part 1: 2021 in Review

Aono: So, let Part 1 of today’s proceedings begin. Before we go on to discuss theactivities of each division over this past year and their plans for the future, I would likefirst to imagine for a moment that our new “shareholder employees” are new recruits
and to tell you something about Cybozu as a company.
Our Vision Since 2020

Aono: These are the principles that, as a company, we value deeply. What is interesting
about Cybozu is that this company vision was passed as a resolution at our Annual
Shareholders Meeting. While shareholders meetings ordinarily discuss a wide variety ofother matters, the Cybozu company vision was agreed at our Annual Shareholders
Meeting and its principles and philosophies for how we go about our business adopted
with the approval of our shareholders.
This slide shows the company vision that we formulated in 2020 and had approved atlast year's shareholders meeting. As you can see, it is split into "Purpose" and "Culture,"
with the former expressing what it is we seek to achieve.
While Cybozu brings together a large number of people, what is it we are all here to do?
Our answer to this question: we are “Building a society brimming with teamwork.” Thisis our goal.
An abundance of teamwork is not what we see when we look at society today. We aim
to change this. What would such a society look like? The answer is expressed in thefour key aspects of our “Culture.”
We want to achieve is for everyone to share in our vision, to engage in teamwork withrespect for the individuality of everyone involved, and to establish a foundation of trustin which we are transparent, truthful, and open with one another.
To this end, our vision for a society brimming with teamwork is one that works throughconsultation, with people able to express their own opinions about what they want to
do and how things should be done. This is the reason why Cybozu exists and this iswhat we have all come together to achieve.
It is not about maximizing sales or profits. Rather, our vision is to maximize global
teamwork. This, more than anything else, is what I want you to understand andappreciate.

Information Sharing and Teamwork (1)Aono: To this end, information sharing platforms are at the core of our business. In thissense, there is not much information sharing going on in society. While you no doubt
make use of e-mail in your work, e-mail is a prime example of information
fragmentation.
The world of e-mail is one where, when you send a message, the information goes out
to those on the address list, but not to anyone else. The more emails we send, the more
information becomes fragmented. It's like whispering in private.
Information Sharing and Teamwork (2)Aono: Rather, what we want is a common information sharing platform that allows
people to cooperate and help one another across organizational boundaries throughthe open sharing of information. For example, where and what kind of conversations
are people having with one another, who is working where and what are they doing, andwhat successes or difficulties are they experiencing? We have four products designed
to achieve this.
Information-sharing Tools that Cybozu Provides

Aono: I would now like to tell you about these four products. The product best suited tothose just getting started is Mailwise, shown at the bottom right of the slide. Those
emails that disrupt the sharing of information – with Mailwise, everyone is able toreceive them, to see what they say and to reply. The service is intended to turn e-mailinto a tool for sharing information.
For intermediate users, Cybozu Office and Cybozu Garoon are groupware application
suites of the sort typically needed for teamwork in a company. Along with e-mail, they
include scheduling, a bulletin board, workflow, and files.
The current focus of our efforts is Kintone. Kintone is a cloud-based tool for creating
your own applications for all the different information you want to share within yourcompany, allowing you to put the applications out there for others to use. Through thewider use of these products, we are working to create a society brimming with
teamwork.
Aggressive Investment in Future Cloud Growth

Aono: Next, I would like to look back at our performance over the past decade. The bar
graph on the slide shows sales. Sales have increased more than fourfold over thisperiod, from about 4 billion yen (4,000 million) 10 years ago to about 18.4 billion yen(18,400 million) last year. The red line graph shows our profits. Following aggressive
investment in the launch of our cloud business that resulted in a loss in 2015, we havesince enjoyed a V-shaped recovery.
While profits were growing steadily, we were impacted by COVID-19 and have also
been increasing investment in advertising in recognition that it is about more than justshowing a profit. Moreover, amid ongoing global digitalization, there is no better timethan now to be promoting our efforts to create a society brimming with teamwork.
We are also anticipating lower profits for this year as we invest in enhancing our cloudinfrastructure.

More Offices and Increased Hiring

Aono: The graph on the right of the slide shows the steady increase in employee
numbers. Our staff turnover rate remains at about 5 percent; meanwhile we have beensteadily opening new offices in Japan.
Expansion of Global Offices

Aono: The number of overseas employees has also increased considerably.
Approximate numbers are 90 in Greater China, 90 in Asia, and 50 in the USA. With theupcoming launch of a subsidiary in Malaysia, our total overseas headcount now
exceeds 200.
Updated Corporate Blueprint

Aono: Through these activities, Cybozu is engaged in more than just spreading
digitization. While tools are important, we are also pursuing a Corporate
Transformation in how we use these tools. This is being done to help realize our visionof a society brimming with teamwork.
We are trying out new ideas within the company. The challenges we are taking on
include the use of our information sharing platform to make information more openly
available to employees and making Cybozu a company in which anyone can become adirector. I hope we can obtain know-how and other feedback from you on these
initiatives.

Reference: 2021 Financial Results and Business Details

Aono: More details of our business activities are provided in the video. As this material
is being made publicly available, please feel free to take a look.
Internal Organization Chart and Presenting Departments

Aono: We now come to the main substance of this session. As shown in the slide,
Cybozu is divided into a number of divisions. In simple terms, the divisions listed as“Business Infrastructure” at the bottom of the slide handle back-office functions.

Further up the chart are the divisions responsible for producing and selling our
products. Divisions further to the right of the chart have more direct contact withcustomers. The heads of those divisions in the red boxes are here with us today to givepresentations.
Again, I ask you to listen to what they have to say and to provide us with your feedback
and advice. I hope that you will join in with the spirit of the occasion and contributewhatever input you feel you have to offer.
Development Division Topics

Aono: I now welcome Mr. Teppei Sato, General Manager of the Development Division,
to introduce himself and tell us about his division’s activities for this year.
Teppei Sato ("Sato" below): My name is Teppei Sato from the Development Division.
Thank you for attending today’s meeting. Out of all the work my division intends tofocus on during this coming year, I have three topics in particular that I want to talk to
you about today. Rather than the usual discussion of new releases and so on, such asfunctional updates to our products, these relate more to our internal activities andchallenges.

1. Revamp infrastructure

Sato: To summarize, the first of these relates to the revamp of our infrastructure. It has
been more than a decade since we released "cybozu.com," and I am glad to say that it
has grown considerably since then, with a large increase in the number of users.
Some of what we put in place initially never envisaged growth of this scale. This hascaused problems with an inability to handle large quantities of data and madeoperating practices difficult to automate. We started working on upgrades to addressthese issues some three years ago.
The work completed up until last year has put the groundwork in place, meaning thechallenge from this year will be to undertake the actual product migrations. We have a
lot of work ahead of us and we are devoting considerable internal resources to thiswork.

2. Take on the challenge of global market expansion

Sato: The second topic relates to the global market. Our past practice has been todevelop products for the international market. It was to facilitate this global
deployment that we transferred “kintone.com” to a database platform in 2019 to serve
the US market.
We have now decided to make “kintone.com” available to the wider international
market from this April. Work on this has already started and it is an area where weneed to continue moving forward. The same applies to sales management systems
where the challenge is to create products suitable for use around the world, including
in terms of what they are able to do, and we are taking steps to achieve this.
3. Adapt to the tougher hiring market

Sato: Meanwhile, there are many other tasks we would like to progress but need to beable to find the people to do the work. This is becoming a major challenge.

The hiring market is becoming very tight and we need to ensure that what we do iseffective. While people were already talking about how engineer recruitment has
become more difficult than ever, my impression is that last year and this year it has
become even tougher. I believe this is an area where we need to consider new
alternatives.
While we bolstered our engineering recruitment team last year and were able to recruit
about three times as many mid-career hires as in the year before, the fact that we stillneed more people means that this is an area with more work to be done.
Aono: Thank you very much. I would now like to open up the discussion on the topics
raised by the Development Division. Recruitment is clearly difficult.
Sato: It certainly is. In the past, salary ranges and so on tended to be different at startups, but with the easier availability of funding in recent times, both in Japan andelsewhere, it now seems that such companies have become a source of strong
competition on hiring.
Aono: Foreign-owned companies are also paying very high salaries.
Sato: Yes, that's right.
Aono: Do you do a lot of recruitment advertising?
Sato: While we make use of a variety of channels, right now most success comes fromreferrals, targeting, and scouting. I feel we are doing what we can on recruitment. But
given that other companies are also doing the same things, there is no guarantee that
this will be successful.
Aono: It would certainly be helpful if shareholders could assist with referrals.
Sato: Very much so.
Aono: Given that we have about 20,000 shareholders, one referral from eachshareholder would give us an extra 20,000 employees.

Sato: What really matters is how we communicate the unique appeal of Cybozu, andhow we ourselves are conscious of this.
While I believe that Cybozu has done a comparatively good job of making itself known
in the context of flexible workstyles, COVID-19 has made working fully remotely astandard practice at companies competing in the market for engineers.
Being able to offer the option of working fully remotely used to be a plus for Cybozu
back before COVID. Sadly, it is no longer the attraction it once was as everyone looking
to recruit engineers is offering the same. As such, we need to be thinking about whatelse we can now do.
Aono: How about in Human Resources? Do you also feel that COVID has robbed us ofan advantage?
Yumika Nakane ("Nakane" below): I am Yumika Nakane, here representing the Human
Resources Division. Certainly, although everyone has done what they can, it is true that
Cybozu no longer stands out from the crowd. However, I think this is a very good thing.
Not only in terms of Cybozu's competitiveness, I also feel that we will benefit from howchanges in the attitudes of job candidates will flow through to the company as well.
Sato: That is certainly a factor. We are recruiting more people from places where wehave not had an office in the past, places other than Tokyo and Osaka, as remote
working makes it easier for them to come onboard.
Nakane: The barriers are certainly lower.
Sato: In this regard, I believe the changes are for the better.
Aono: In other words, more people are coming to realize that, whereas they may havethought of Cybozu as a Tokyo or an Osaka company, you can in fact work fromanywhere.
Sato: That's right.

Aono: If we are to build a society brimming with teamwork, then it would be a concern
if other companies did not follow our example, although we also need to keep one stepahead. Let’s return now to the first topic raised by the Development Division.
While it can be difficult for people outside the company to appreciate, replacing
infrastructure is a real challenge. Given that it involves replacing and upgrading over
1,000 servers, we would really like to know in advance where the risks are likely to lie.
Sato: It certainly is. This is a critical project, and what makes it so is that, given ourcurrent user growth, failure to proceed with this upgrade would, in a matter of a few
years, put us in a position where we would find it very difficult to accommodate any
new users. This is why we need to establish new infrastructure that will give us theability to scale as needed before that situation comes to pass.
Aono: Where do you think the bottlenecks might occur? If difficulties arise, where do
you anticipate the causes might be found?
Sato: We are now getting to the actual migration stage where, to some extent, we willneed to transfer data while existing systems are still running. The size of this job isdaunting. It is not simply a matter of deciding on which day the transfer is to happen.
Rather, the transfer will be a drawn-out process that happens in the background, andwe will need to put preparations in place to allow the progressive copying of data to thenew system, over a period of many months, while users are still using the oldinfrastructure.
As these preparations will not be completed quickly, we also need to take the time toensure we are ready to reallocate resources should something go wrong along the way,for example. The long timeline of the project means that any failures along the way will
only further push out the completion date.
Another potential difficulty is if the new infrastructure proves to be unstable andcauses delays in switching over the production environment to the new system.
Rather than designating a particular day for switching over all services at once, we arelooking for ways of minimizing risk by having the migration proceed in stages,
switching over one service or one part at a time as the performance of the new
infrastructure gets better. In this regard, some of the smaller services are already up
and running on the new infrastructure.
Aono: Doing it in a way that users won’t notice?
Sato: That's right.
Aono: What makes it difficult is that we need to work behind the scenes without any
service interruptions. Is there any way in which the respective divisions could help?
Sato: Certainly it might be useful if they could go a little easy on the current
infrastructure. They may find themselves getting inquiries from clients wanting to
make very large-scale use of the current platform, with large file sizes or heavy accessloads, for example. They could perhaps suggest that users of the current infrastructure
wait a little longer for these things.
Aono: Wait until the new infrastructure is ready?
Sato: I have already had to ask some people to wait a little longer as it is still a work inprogress.
Aono: I certainly hope that Mr. Kuriyama and Mr. Hayashida appreciate this point.

Keita Kuriyama ("Kuriyama" below): Our partners are well informed about what ishappening with Kintone and we have been building up our integration know-how as wework on the current infrastructure. Everyone is becoming much better at getting dataout of the system.
Aono: A guide containing useful know-how has been put out recently and this hashelped make its use more reliable.
In any case, we have now reached the end of the time allotted to the Development
Division. There is more to come, however, so please stick around. I would also
encourage you to continue submitting any advice you have to offer.
Business Marketing Division Topics

Aono: Next, Mr. Hayashida will tell us about the topics relating to the Business
Marketing Division, or “Bizima” as it is known within the company.
Tamotsu Hayashida ("Hayashida" below): My name is Tamotsu Hayashida from theBusiness Marketing Division. Thank you for attending today’s meeting. The first topic
relating to my division over the past and current year is our investment in productadvertising, especially TV commercials, which we have stepped up from the second
half of last financial year. We are also looking to issue a range of communications ontopics such as workstyle, company organization, hybrid work, and diversity. Moreover,
we are in the process of strengthening our human resource development.
These are the three main topics that I wish to talk about today. I intend to focus inparticular on the first and second of these, both of which relate mainly to how we
present ourselves to the outside world.
1. Accelerated investment in product-related advertising mainly in the second half of
FY2021

Hayashida: We have been investing a lot in product advertising over the period from thesecond half of the last financial year through to this year. We have boosted our activity
across a range of channels, including television, online, and outdoor advertising, andindeed I expect many of you will have seen some of these commercials.
Much of this has been about raising the profile of Kintone and prompting people to ask
themselves what Kintone actually is. While this will not necessarily lead to an
immediate increase in users, website visit statistics are on the rise and I believe thatthe first phase of this advertising is gradually beginning to show its worth.
A survey of customers who have signed up for our services found that, in more thanhalf of all cases, signing up for the service did not happen until more than a year after

the user first learned about Kintone. When you consider the internal approvals andother procedures such users would have needed to go through, this is not unexpected.
We appreciate that keeping these users engaged with Kintone and preventing themfrom forgetting about it will require reminding or informing them about it on a variety offronts. This is why we chose to use online advertising and a range of other channels toprovide these Kintone reminders.
As such advertising needs to be sustained if it is to deliver benefits, we intend tocontinue with it for several years, albeit with some ups and downs in the level of
spending over time.
2. Communicate several viewpoints e.g. workstyles, company organizations, hybrid
work, diversity

Hayashida: We are looking to communicate our views on topics such as workstyle andcompany organization. As mentioned earlier when talking about the Development
Division, the issue is what message we should be trying to convey on where to next forworkstyle reform.
Working remotely is becoming more common, with different companies pursuing avariety of workstyle reforms. Conversely, looking around at what is happening, myimpression is that having all of these companies pursuing reforms may in fact bereducing interest in flexible workstyles and causing a fall in the number of people
looking into the subject.
On the other hand, information of a somewhat different form is coming out, like at last
year's Board of Directors Meeting, and this may have the effect of reviving interest. We
should get some reaction by approaching the subject from a variety of different angles,
such as diversity or relocating out of the main cities.
As of right now, while we have yet to identify which angle to pursue, the challenge weface amid all of the changes happening in Japanese society is to keep trying todiscover where the traction is to be gained in our ongoing communications. This is a
key issue for the Business Marketing Division, especially over the period from last year
through this year.

Aono: Thank you very much. Shareholders often ask whether we are spending too
much on advertising.
Hayashida: Yes, they do.
Aono: Given that today’s meeting is meant to be in-house, I feel our discussion can be alittle more candid in such an environment. In Silicon Valley, a company like ours withsales in the 20 billion yen range may run at a loss of about 20 billion yen.

Yet even with all we are doing, we still expect to be in the black this year. That is, we
still have the scope to step on the accelerator to the tune of 20 billion yen. When you
consider the potential for Kintone to become part of the social infrastructure of the
future, should we not in fact be spending even more right now while we still have afavorable tail wind? How do you respond to that?
Hayashida: Ultimately, if we wanted to spend 20 billion yen, then of course we could.
While it does not have to be 20 billion yen, the essential point is that, if we want toremind customers about Kintone and keep it in their minds, then it is vital that we
increase opportunities for these customers to come into contact with Kintone in manydifferent areas of their daily lives.
To this end, we intend to keep on with the TV commercials and make plentiful use, notonly of online advertising, but also outdoor channels such as trains and taxis, not tomention magazines and newspapers. There are many different places where people
come into contact with ads as they go about their daily lives, so for us as an advertiser,
there are many available channels and a great deal of scope for investing in even more
advertising.
Aono: Have you used outdoor advertising before?
Hayashida: Not very much. While we have advertising up in railway stations, we still
have not made much progress on getting ads into subway stations, particularly theplaces where business people are likely to pass by. It would help to have advertising insuch locations.
Aono: I would appreciate any advice. Can you think of any interesting places or ways inwhich we could advertise? Something that stands out as being distinctively Cybozu, orsuggestions as to where such advertising could go.
Hayashida: I would welcome any suggestions as to what sort of advertising people
would like to see.
Aono: Previously, when we were promoting workstyle reform, I understand the ads
were focused on Kasumigaseki Station.

Hayashida: Right.
Aono: And these were targeted at people from the Ministry of Health, Labor andWelfare? In that regard, the question becomes "what message do we want to convey,
and to whom?”Hayashida: That's right. We want to highlight to people how use of Kintone can maketheir current work more efficient and allow them to get things done more easily. Thereis a lot that I would like us to be getting across with regard to the value we have tooffer.
Kuriyama: What I hear from our partners is that, while executives continue to travel,
non-executive level employees are making fewer business trips. This means that rightnow could well be a good time for using airport advertising for the pinpoint targeting ofexecutives.
Aono: Good idea. We are now getting onto our second topic, where the message shifts
from one of workstyle reform to corporate governance. While workstyle reform mayseem more a topic for Human Resources, moving on to corporate governance brings
us into the realm of management, an area where targeting executives makes sense.
Hayashida: It certainly is. As is the case with board-level reform, when changes start
happening in workstyle reform there will be some who take the view that the company
is fine as it is. So, I hope we will be able to come up with some good suggestions forthe executives as to other ways in which things can be done.
Rather than people scrutinizing the airport advertising, we will first need to come up
with some key words that will catch people’s attention and I very much hope that this issomething we can do.
Aono: Thank you everyone. We have now reached the end of the time for Bizima. The
next speaker is Mr. Kuriyama.

Sales Division Topics

Kuriyama: The Sales Division has had a lot to do over the two years since 2020. While I
found it difficult to narrow things down to just a few topics, there are three in particularthat I wish to raise.
1. Take on the challenge of developing new sales channels

Kuriyama: This is the first topic. In terms of our IT industry category, Cybozu can becharacterized as a BtoB SaaS company. However, one characteristic that distinguishes
us from the very many other BtoB SaaS companies that handle all of their own sales isthat Cybozu is strong in the area of partner and other indirect sales.
We are continuing to seek out new sales channels to better leverage this characteristic.
There are two such initiatives that I believe were especially successful in 2021.
One is our alliances with regional banks and other financial institutions. I also believe
we have had great success with the delivery of Kintone through consulting firms, achannel where we have had very few sales in the past.
The second initiative is our work with major system integrators (SIers, implementation
partners). Although we have put in a lot of effort, we have had few dealings in the pastwith large system integrators. To name names, the largest include NTT Data, SCSK,
Nihon Unisys, and Itochu Techno-Solutions (CTC). We are putting a lot of thought into
whether we can do more in this area.
2. Raise Kintone’s presence in the public sector market

Kuriyama: This is the second topic. Compared to the past, deployment of Kintone in the
public sector has visibly accelerated over the past two years. Notably, Kintone has
been adopted by nearly 200 municipalities, and some central and prefectural

government agencies are either currently considering installing it or have alreadyinstalled it.
There are two reasons behind this. The first has been the need to get many systems up
and running quickly during the COVID-19 pandemic. There have been numerous
instances of systems commencing operation within a month of the government policy
being announced. I have found myself receiving calls from people who want a systemthat they can start using next week. To which I can only reply, “Did I hear you correctly?
Did you say next week?” This need to get systems working at very short notice has, I
believe, opened up considerable opportunities for Kintone.
The second reason is the overall trend toward the digitalization of services forresidents, and, of public-sector operations generally. I expect you all participate in theelections, and you will find that 70 to 80 percent of mayors these days are promoting
the digitalization of resident services and city operations in their campaigning. It seems
to me that this is an area where we are frequently called upon to help.
3. Focus on product alliances

Kuriyama: This is the third topic. While it may not be widely appreciated, companies are
increasingly adopting cloud services. It is said that trends reach Japan a few years
behind the US market. The current survey data from the US is telling us that areasonably large company can be expected to use about 70 different cloud services.

In Japan, meanwhile, while an increasing number of companies have adopted at least
some cloud services, this tends to happen in a piecemeal fashion without any
coordination. This is why I believe that interoperability between different BtoB SaaS
products will be a major factor in the future adoption of cloud services. The sort ofissues that arise in the selection process include customers choosing a particular
product simply because it is available or choosing not to adopt a service because,
while it looks good, it will not work with what they already have.
Fortunately, Kintone is very easy to connect to other services. It is a little hard tounderstand without a diagram, but suppose there are three services: A, B, and Kintone.
Kintone can interoperate with both A and B. However, there is no direct link between A
and B. Cases like this are very common.
It means that, while A and B cannot interoperate directly, they can do so via Kintone if it
is installed. It has become clear to me that our being able to fill this role in the cloudindustry is a strength, one that clearly differentiates us from our competitors.
Being able to connect various services via Kintone also strengthens our competitive
position and this is an area where we intend to devote a lot of effort, including by
establishing a specialized team and assigning more staff. That’s all. Thank you for thisopportunity to give you a brief overview of these three topics.
Aono: Thank you very much. It was very interesting. The Sales Division is involved in arange of different initiatives, of which these are but three.

Aono: It is interesting to hear that you have been able to bring partners, such as
regional banks, onboard as sales channels. What I would really like to hear, however, isthat you have got us a major system integrator (SIer). Given the many instances inJapan of large system integrators taking on large projects, the question becomes oneof how to engage with them.
Some of our viewers today may work at such companies, or some of you may know
people who are involved in their management. Perhaps you might want to give us a calland offer to join forces?
Kuriyama: Since this is an internal meeting, I will put it in a way that will be easier for
those from other divisions to understand. Fundamentally, there is not much affinity
between Kintone and large system integrators. In simple terms, Kintone is a service
that allows you to create an existing system at low cost.
It is a rough way of putting it, but that is what it is. As adopting Kintone somewhere
where systems are already in place only reduces the unit sales price, I expect it will bedifficult to achieve any depth of engagement unless we can successfully explain tosystems integrators the benefits of having Kintone as part of their portfolio of
offerings.
We have been looking for answers to this problem, and are slowly starting to findsome. The in-depth discussions we have been having with one of the major companies
have reached the point of talking about how Kintone can play a central role in theirbusiness. While it is only one company at the moment, we are working with them tofind the right answers.
Aono: As we need to make a profit if we are to remain in existence, we want toestablish a model that allows us to operate our business while still keeping customers
and partners happy.
Kuriyama: There was a way of expressing it that came to me while I was talking with
their directors and facing a degree of reluctance. The history of the IT industry has
been one of continual downsizing.

We went from mainframes to office computers, from office computers to open
systems, and from open systems to the cloud, downsizing all the way. And yet, amid allof this downsizing, never once did the IT industry get any smaller.
As I put it to this person, while I lacked the evidence to prove it, there was no chance of
this latest downsizing doing anything other than making their business larger, notsmaller. They conceded the point and we went on to discuss how to proceed.
Aono: That's right. While people always tend to focus on what will be disrupted when a
new innovation comes along, it would be great if they could also appreciate the evenlarger market that awaits them further down the track. Accordingly, we would love tohear advice from our shareholders on how we can better make our case and boost ourearnings.

Aono: Regarding the second topic of the public-sector market, I understand that isgoing well. Overall, the impression is that demand is coming from the cities.
Kuriyama: Yes, that's right. The numbers are higher for metropolitan areas.
Aono: Do you tend to focus on larger cities such as Tokyo, Osaka, Kobe, andKitakyushu?
Kuriyama: Metropolitan areas, by their nature, tend to have a larger volume of work.

Aono: Local governments outside the main cities are severely understaffed. They often
complain that, while they are unable to increase staff numbers, the workload does not
get any smaller and so they want to get things moving quickly.
Kuriyama: I have had many opportunities to speak with local government and haveheard many different stories. While I had always assumed that in the regions jobs inthe public sector would be extremely popular, it turns out in fact that regional
municipalities have been unable to recruit as many staff as they want or fill thevacancies with new graduates. This difficulty in hiring is something you hear about a
lot when you visit the regions.
Aono: And if action is not taken soon, the work environment will only get worse … I wish
there were some good ideas on how to address this problem. Speaking of which, I
understand there are about 1,600 to 1,700 municipalities in Japan?
Kuriyama: About that number.
Aono: It would be helpful if we were able to deal with them on a more collective basis.
Dealing with them one at a time, there would be little to show for it even after a decade.
What is needed is a strategy that can be applied across the entire sector at the sametime. In any case, this completes the allotted time for the Sales Division. Thank you .
Organizational Strategy Office Topics

Aono: Osamu, are you there?. I understand you are in the US today?
Osamu Yamada ("Yamada" below): That’s right. I’m currently in San Francisco.
I would like to start by telling you about the Organization Strategy Office. As
digitalization progresses, it uncovers more and more opportunities for improvement,
just like at Cybozu. What we are embarking on at the Organization Strategy Office is averitable corporate transformation of Cybozu as a company. My three topics for today
are the "10-presidents Plan," "Decision making and Advice," and "We are All Board
Members.”
Vision for the Organization Strategy Office

Yamada: We talk about creating a society brimming with teamwork, but this is no easytask. What we want are teams that can grow and sustain themselves, that can do so
without being dependent on particular individuals, and that, rather than being based on
authority or power, are able to operate in such a way that people can work toward
common goals on the basis of knowing what they want to achieve. We call these"autonomous, decentralized campfire-style teams," and these are the types of teams
we are setting out to build.

Cybozu’s organization chart

Yamada: While you might think that Cybozu has a flat corporate structure, in fact, ourorganization is a typical hierarchical one with a concentration of authority as shown
here.
Cybozu’s information sharing

Yamada: However, we are far advanced with digitalization at Cybozu and our
information sharing is very flat.
From a pyramid to Mount Fuji

Yamada: Our first step toward making this transformation in an environment of flat
information sharing was to embark on our “10-presidents Plan.” Up until the year
before last, Mr. Aono was the senior-most manager with ultimate authority. Now, incontrast, he has stepped down a rung and we have reshaped our organization from apyramid to something more like Mt. Fuji.
Company-wide view looking like the Himalayas?

Yamada: The result when you look at the organization chart for the entire company ismore like the Himalayas. While Mr. Aono counts as one among them, it is the generalmanagers who are the final decision makers. This means there is now much that Mr.
Aono is not allowed to decide alone.
In effect, while he represents the company, in terms of authority, he is like everyone
here, including perhaps myself. That is, his authority only extends as far as the scopeof his particular responsibilities.
Decision-making and advice

Yamada: You may be wondering whether this decentralizing decision-making really
works. However, the way we do it also includes a system for providing advice todecision makers. When a decision is to be made, we have the people with knowledgeof the matter, or who can influence the decision, or bring in different perspectives,
provide advice in a manner that is visible to all.
What we are doing is like what you shareholders are currently experiencing here today,
including being able to agree or disagree with advice or ask questions when unsure.
However, rather than all of this being a majority decision, it is still up to the decision
maker to make the decision and justify it.

We are All Board Members (Mintori)

Yamada: When Cybozu switched last year to open recruitment of its internal directors,
there were some murmurs as to whether our corporate governance was still okay. It is,and the reason why is because, as we have just been discussing, we share thedecision-making process, share the final results in the form of minutes, and operate asystem that allows everyone to ask questions on the basis of having a duty to question
as well as a duty of accountability.
This information sharing also means that anyone wanting to misuse the system isunable to do so. We have also now taken this questioning one step further by making
everyone a director so that we are able to make it known if we find something odd
about any of the decisions made around us. It is the Organization Strategy Office thatis responsible for this initiative.

Aono: Thank you very much. I will put off further discussion of this “We are All Board
Members (Mintori)” initiative of making everyone a director for now as we will be
coming back to it in Part 2 of today’s proceedings. What I will say is that what thisShareholders HQ Meeting is doing right now is an instance of such decision making
and advice. It is a chance for all of you to watch on as we discuss what the different
divisions are thinking about and doing, and for us to seek your advice and fulfil our dutyof accountability by answering any questions.
None of which has any point, of course, unless such advice is forthcoming. So, we aregoing out of our way to elicit feedback as it would be no good for this meeting if,
despite our protestations of openness, no one was to offer any advice or if theatmosphere discouraged it.

Aono: This "10-presidents Plan" is a bit disturbing because it looks like I’ve been lopped
off.
Yamada: The way it appears on the slide is unfortunate.
Aono: Nevertheless, we have now genuinely reached a state of affairs in which
decisions can be made at important company meetings without my presence. One year
on, how is everyone doing? Do you find it difficult to proceed without me? How about
you, Mr. Kuriyama?

Kuriyama: I haven’t had any trouble.
Aono: Really? No problems? How about you, Ms. Nakane?
Nakane: When you think of the delays that would happen because Mr. Aono absolutely
had to be there, then, no, I don’t think it has caused me any problems.
Aono: So, in a sense then, if someone wants to get something done, they decide to doso for themselves.
Nakane: That is how it works.
Aono: And there is more of a sense of urgency?
Nakane: That’s right. What we need to address next, however, is the question of how togather advice from across the entire company when making the really big decisions
that impact more than just one division, how this can be done efficiently, and who willtake the lead in doing so. While, in the past, it would have been up to Mr. Aono to givethe final word on such matters, given that this is no longer the case, this is now
something we ought to be thinking about.
Aono: You are talking about the issue of what to do when your division has a particularplan of action but other divisions see it differently? You could put a structure in place
whereby there is one individual at the top to make decisions that everyone can thenfollow, but we don’t have that option.
Nakane: That’s right, we don’t.
Aono: How do we overcome this? If we discuss matters openly, I believe we should be
able to reach a conclusion.
Yamada: It should at least provide us with some insights. As things currently are, when
we discuss a particular matter, we do so on the basis of having already decided who it
is who will decide what to do. In the future, however, I believe we need to consider avariety of factors with regard to how we should proceed when there are disputes about
who gets to decide.

Aono: This is another area where, rather than worrying about something that hasn’t yet
happened, maybe we should figure out what to do about such situations when they doin fact arise. For example, when we have trouble deciding on the division of
responsibilities, or when someone who wants to pursue a particular plan of action
encounters resistance that obstructs progress.
Yamada: You are suggesting that this is currently not much of a problem. Actually, I
have a very big problem.
Aono: Is that so?
Yamada: At the Organization Strategy Office, we are always dealing with the company
as a whole and our work often encompasses different divisions. In the past, I believe it
was easy for me to make my own decisions after hearing what others had to say solong as you (Mr. Aono) gave your approval.
The way things are now, however, because nobody pays attention to whether you haveapproved something, they have to listen to what I have to say. This makes it difficult to
get things moving forward if other people are not really convinced. It was easier when
you acted as the company president. I have become acutely conscious that things
were easier when there was someone in the top spot.
Kuriyama: Does the opposite not also apply? People would bring in things saying that
Mr. Aono has already given approval, but I’m glad that this now no longer happens.
Yamada: That’s one side of it.
Kuriyama: And this is another.
Aono: So you are saying that you can no longer rely on presidential authority to getthings done?
Kuriyama: This pyramid does give the impression of a seniority system. I just wanted to
say that before the shareholders get involved.

Yamada: There is still a slight sense of seniority.
Aono: But you wanted to change how things worked. You never know when I will get
sick or have an accident. Were something like that to happen, it would be great if we
had 10 people already trained up to be president. Rather than having just one person aspresident, we are clearly in a much stronger position having 10 people in that role. I
appreciate the difficulties, but I still hope you will take up the challenge.
Yamada: There was a proposal that you withdrew in response to advice and opposition
from employees.
Aono: I would say that there were more people who were opposed. We have become acompany that doesn't try to second-guess the President.
Hayashida: A question that warrants a lot of thought is how much and what kind ofadvice do we need to receive to go ahead with something, and what will cause us topull back. You can think of it as a form of training, and I believe the more people whoare in training, the stronger we will be.
Aono: Yes, that's right. As time is up, I would like to conclude this section on the
Organizational Strategy Office. Thank you, Osamu!
Human Resources Division Topics

Aono: Over to you Ms. Nakane.
Nakane: I am Yumika Nakane from the Human Resources Division. I have two topics I
wish to talk about today. The first is about how we achieve a happy, autonomous,
decentralized organization, the second relates to diversity and our future workstyles forboth teams and individuals.
A company brimming with teamwork = Cybozu-style autonomous, decentralized teams

Nakane: The first topic of how to realize a happy, autonomous and decentralizedorganization relates directly to what we have just been talking about with theOrganization Strategy Office. That is, we are spreading authority more widely andbecoming an organization in which people can think and make decisions forthemselves.

1. Happy, autonomous, decentralized teams

Nakane: At Cybozu, not only are we adopting autonomous and decentralized ways of
doing things, we also have a wide variety of workstyles. With our having also become
so geographically dispersed, it raises the question of whether such a company reallycan be brimming with teamwork? There are issues that remain a cause for concern,one of which is that an autonomous decentralized organization does not necessarilyneed to be decentralized.
A decentralized organization may well appear spread out, and if each team goes about
things in their own way independent of one another it may be for the best within theirown context. However, the question remains: will this result in our efficiently achieving
the larger ideal of Cybozu as a team in itself?
What we are trying to do at the Human Resources Division is to build Cybozu into ateam in a way that gets as close as possible to being a society brimming with
teamwork. We also want to create a platform that can roll out this concept of teams
brimming with teamwork much more widely.
Two key concepts are needed to achieve this, I believe. One is "Connection" and theother is "Platforms." Connections are vital, meaning both connections between people
and connecting with information.

At the Human Resources Division, our particular role lies in connecting people withpeople. The Development Division is the Development Division and the Sales Division is
the Sales Division. Their respective general managers do what is best given thesituation in front of them. At Human Resources, however, our role is to consider how tocreate connections between people in ways that transcend these different divisions
and teams.
We want such connections to bring a sense of reassurance and safety, and an
environment in which people can achieve things together. This is because, without thissense of reassurance and safety, I do not believe we can get accountability, and the
responsibility to advise and question, to work in practice. You will be ill-inclined to offer
advice to someone who you find intimidating.
A key point, then, is to be able to establish connections that are not like this, and tocreate opportunities for people to forge good connections.
“Platforms,” meanwhile, are all about our establishing mechanisms that make it easy
for people to create their own such opportunities and ways of doing things. This is thefirst topic.
2. Workstyles and diversity for teams and individuals going forward

Nakane: The second topic relates to workstyles and diversity for teams and individuals
going forward. Two years into the pandemic, workstyles at Cybozu have changed
considerably. Pre-pandemic, around 70 percent of our people came into the office towork. Now, however, perhaps thanks to the power of groupware, that number hovers
around the 10 to 20 percent range. While this number varies quite a lot across different
offices and depending on what people are working on, in broad terms, this is where weare.
Over these past two years, we have given a lot of thought to whether we should reduce
the number of offices we have or whether we should focus instead on making themeasier to use. This has included conducting regular surveys, and over this time it has
become apparent that both the real and virtual worlds have their own particularstrengths. What we are trying to do is to take advantage of both worlds to provide a
hybrid work environment, creating a workplace in which both individuals and teams canwork in a way that lets them choose what is best given their current situation.
This ties in with what I was saying earlier about connections. What we are really trying
to do, I believe, is to transform the office from somewhere where people work andproduce output to a place where individuals, teams, and staff connect with one
another.
In other words, rather than connection for its own sake, the end result should be a shift
to ways of working that raise the output of teamwork, establishing practices andworkplaces that generate results in the form of greater efficiency, higher sales, andmore customers making use of our products. It is no easy task, but we are doing our
best.

Aono: Thank you very much. Our Human Resources Division is working on many
progressive initiatives that I would love to tell you about. Right now, however, we are
discussing the establishment of an autonomous, decentralized organization. While thisis our aim, getting people together to “connect” in the midst of the pandemic is achallenge.
Nakane: It certainly is.
Aono: Although we want to turn the office from a place to work into a place to connect,
the best use of bricks and mortar offices to achieve that is problematic.
Moreover, as well as being aware of this problem, I am also concerned about themental health angle. With the pandemic going on, you get situations such as new
recruits not having the opportunity to all get together at the same time, or staff who are
only meeting their supervisor for the second time this year. What can you do about thisin terms of short-term measures?
Nakane: One practical initiative we are putting a lot of effort into is holding companywide events on a scale that brings people together from across team boundaries andkeeps people interested. These provide opportunities for people to genuinely connect
and we also make good use of virtual options, utilizing various technologies and newservices to set up such venues and then inviting all sorts of people to attend. We areworking on these sorts of company-wide events. For example, we currently have ahanami (cherry blossom viewing) party planned that we hope new recruits will attend.
This also relates to mental health and it pays to remember that the various problems
and attitudes that arise are all created in the workplace. Meanwhile, it is the workplace
managers who are most familiar with the people who work for them. At Human
Resources, we want to help these managers connect with one another.
We want to create opportunities, not just for managers to acquire knowledge, but also
for them to work with other managers to resolve problems, consulting with one
another, and sharing know-how. This is something we have been working on since lastyear, and to get things moving for this year we held our first event just yesterday. We
have launched a Management Bar where managers can get together.

Aono: So, the number of events has increased? You have certainly been very creative
about organizing online events.
Nakane: We have done what we can, but it has been difficult.
Aono: So this is about first getting managers connected with one another so that,based on their understanding of their own people, they can then bring them together
and avoid their being isolated?
How many people are there in Cybozu? We are a company of about 1,000. So, howmany would you say are involved in this initiative connecting managers together?
Nakane: About 70 to 80 people.
Aono: That is quite a lot.
Nakane: Along with supporting managers, this is also about what you spoke of earlier,about how to care for people’s mental health as we make the transition to online work.
I see mental and physical health as both being very important and fundamental toensuring that everyone enjoys their work. Awareness of mental health has been
growing, not only for managers but also among individual employees.
One example is how staff are obliged to have annual stress checks and such like. While
Cybozu obviously conducts these, and even though they are mandatory, it is left up to
the individuals concerned as to whether they actually get the check. This participation
rate, which was in the 70 percent range last year, has since risen to the 90 percent
range for this year.
In part due to the pandemic, I believe people are now more conscious of the need to beproactive about caring for their own mental health. This has resulted in a lot of staff
undergoing the checks and with it a slightly higher number being identified as having
high stress. Dealing with this is a challenge for the future.
Aono: We are already recognized for our progressive workstyles and I hope that we will
also come to be known for how much effort we put into this area. If anyone fromoutside the company has advice on how to achieve this, I would like to hear it.

Nakane: Yes, please let us know what you think.
Corporate Affairs Division Topics

Aono: Tadamasa, you are our final speaker.
Tadamasa Hayashi ("Hayashi" below): My name is Tadamasa Hayashi representing the
Corporate Affairs Division. Thank you for attending today’s meeting. My division's
primary mission is finding ways to ensure the reliable conduct of routine tasks, such asprocessing expenses and running management meetings. I would like to talk to you
about some of the key topics that arose out of this work over the past year. Mattersrelating to the Board of Directors and the consideration of candidates for the next term
will be discussed in more detail in Part 2. Right now, I have two other topics I would liketo talk about.
The first is one that I expect will be of considerable interest to those of you here today,
namely our shift to a new section of the Tokyo Stock Exchange (TSE). The second is
our commencement of work on a new independent information sharing support
initiative that was split off from Corporate Planning in January of this year.

1. Compliance with the new TSE market category

Hayashi: In response to the new TSE market classification, we have applied to move to
the Prime market, the equivalent of the existing First Section.
When, in my role as head of Finance and Accounting, I made a draft proposal to the
Executive Committee to have them confirm that the Prime market was the right place
for us, I was surprised that the question led to considerable discussion. The prevailing
opinion at the meeting, including that of Mr. Aono and Osamu, was that the Standard or
perhaps the Growth market would be best for Cybozu, given the sort of company weare and how we are placed, as these would give us more freedom to move. The general
tone of the meeting was that we should be heading in that direction.
However, I was a little uneasy about agreeing to this and set out again to canvas theopinions of others in the company, putting to them the question: Which of the newmarket segments do you think is best for us?
When I did so, I got a strong response from staff. Much more emphatically than before,
people were urging that we should go for the Prime market. When talking to people in
the workplace, for example those who must face up directly to the reaction of themarket, including our credibility with customers, their sense was that the impression of
credibility that comes from being in the Prime market segment would be a major
benefit to our business.

This then is one of my main topics: the way in which, despite the Executive Committee
having felt that the Standard or Growth market would be okay, this view was overturned
by feedback from the workplace, resulting ultimately in the company’s senior
management giving its consent and our putting in an application to move to the Primemarket.
2. Start initiatives to support information sharing

Hayashi: Next I would like to talk about our initiatives to support information sharing.
As has already been reiterated a number of times, Cybozu discloses as muchinformation as possible so that all staff can participate in discussions on an equal
footing.
Because all of this information and communications come together on our groupware
platform, the amount of information to be shared has increased enormously as ourorganization and operations have grown. As opportunities to meet and talk face-toface have diminished since the start of the pandemic, I understand that the Kintone
open Spaces alone now get around 35,000 comments each week, a roughly five-foldincrease from before.
This flood of information makes it quite difficult to ensure the right information gets to
the right people. I believe that Cybozu is now at a point where we need to beimplementing concepts of information dissemination that go beyond mere disclosure,ensuring reliable delivery as well as simply posting information publicly.
To this end, we have established a team that, from this year, will be working on ways ofprocessing internal information appropriately and facilitating its delivery to all staff.
Thank you. This completes my summary of the two topics from the Corporate Affairs
Division.

Aono: Was the main practical reason why staff were so keen to move to the Primemarket to do with their belief that this would make sales easier?
Hayashi: Yes, that's right. I have heard numerous reports of how, when customers ask
us about things like security requirements, customers equate being on a particularsection of the stock market to having a certain degree of credibility; the attitude beingthat if a company is on what is equivalent to the First Section of the TSE then there isno need to go into more detailed questions.
Aono: If it makes sales easier, then I think being in the Prime market segment is a goodidea. At Cybozu, we have something of our own internet in-house. I do not for a minutethink that I am totally across all aspects of it, so if any of our speakers here today haveany specific details about work in this area that you can share with our new“shareholder employees” then please do so.

Hayashi: We have recently set up a means of sharing some of what the Executive
Committee has been doing within the company during the month. This is a video
entitled "Cybozu Digest" that summarizes the month’s activities.
For this month, some of you will have seen the Cybozu TV commercial, and the video
also reports on the completion of the sound and motion logos, and the selection of the
new nominees for the Board of Directors. We are putting together items on major
topics in a way that makes it easy for everyone to be informed.
Meanwhile, eliminating the information divide between those inside and outside thecompany is another major aspect of governance at Cybozu. While we will still beanswering your IR questions as they come up, we also hope to be able to makeinformation available outside the company in the form of summaries, covering things
like what the Executive Committee has been discussing and how these matters areproceeding.
Aono: That’s interesting. It would be good if this information sharing could also extend
outside the company. You could think of this Shareholders HQ Meeting as being one
example. Through this information sharing, we want to take up the challenge ofbuilding a society brimming with teamwork. Speaking of videos, the quality has
improved dramatically in recent times.

Hayashi: They have been well received within the company and I see this as recognition
that they are the culmination of everyone's efforts.
Aono: Customers often ask me whether sharing information the way we do at Cybozu
just results in information overload. It really is an issue. But perhaps it is also the casethat these difficulties lead us to devise ways of overcoming them, and in doing so work
toward having these practices taken up more widely.
Boosting recruitment of development personnel

Aono: This is an area where I would like some feedback. One piece of advice on
boosting the recruitment of development personnel is the observation that Japan has ashortage of IT talent and that we should be thinking about training as well as hiring. It
might be interesting, for example, to establish a Cybozu IT school in Ehime Prefecture,
our birthplace, to train engineers who could also live on site.
Sato: I think that is a very astute suggestion. Just this week our hiring team wasdiscussing the idea of expanding the range of people able to work for us by providing
more training.
Of course, training is something we are already doing. For example, we have generated
a lot of buzz on social media by making our own training material for development

personnel public annually for the last two or three years. The importance placed onlearning is also highlighted by the attention such initiatives receive.
Meanwhile, an increasing number of people from non-engineering backgrounds aretaking up opportunities such as programming boot camps, which have lately become
quite common in Japan. This growth in the number of people prepared to take up suchchallenges is something we should be paying attention to in the future in the sense thatit represents an opportunity.
While I am not sure what form it would take if we were to go as far as setting up aschool, such an initiative would parallel aspects of the President's Office and Cybozu
Teamwork Research Institute. Is there some backstory to this idea of opening aschool?
Aono: Ryuta Nakamura, the General Manager of the President's Office, has identified
this as something he wants to do. We should also get Mr. Wada or some of the otherpeople at the Cybozu Teamwork Research Institute involved to see what they can comeup with. It sounds interesting.
TV commercials

Aono: Another piece of advice we have received is to put out more TV commercials.
The suggestion noted that: “Both Money Forward and Rakuraku Seisan gained

exposure on TV. The first time I heard about Kintone was when I saw the nameadvertised on a pillar in a passageway at Tokyo Station.” That must have been a whileback. I think it was around 2013 or 2014 that we were advertising in Tokyo Station.
As for commercials, this is a matter for the Business Marketing Division. To repeat
what I said earlier, what do you think about the advice that this is an area where weshould try to do more?
Hayashida: That is something I would love to do. It is also important to get the rightbalance between challenge and efficiency. Right now, we are doing enough advertising
to gain a degree of recognition. There is also the option of running a short campaign ofconcentrated advertising that nobody will be able to miss. I hope we can take up thechallenge in a way that is targeted. We are currently running the advertisements in anarrow range of time slots. Bearing in mind that there are also people who watch TVlate at night, this is among the many things I would also like to try.
Alliance with a major System Integrator

Aono: The following suggestion is for the Sales Division and concerns entering into a
partnership with a major system integrator. “As I think many of the big players arestuck in a billable man-months mentality, what I would suggest is a strategy that
focuses on marketing Kintone to small and medium-sized companies through midsized system integrators.” What do you think, Mr. Kuriyama?

Kuriyama: This sounds like it was written by someone familiar with the industry, butthere is a problem with targeting mid-sized companies. That is that the IT industry inJapan has a hierarchical structure, meaning that medium-sized system integrators
tend to be second- or third-tier subcontractors and lack their own dedicated sales
team. Companies that work under this regime may employ 1,000 people but only have
two salespeople.
So while they make good partners for deals that we have closed, there are quite a few
issues with using them as a means of customer acquisition. To be frank, this is the sortof advice I would give, and this is an area with which I am very familiar.
Aono: My impression is that there are a lot more firms willing to consider us among
those somewhat smaller in size that you find when you move down below the layer oflarge top-tier IT contractors.
Kuriyama: They are certainly more of them. The numbers are up considerably, including
quite a few that we have deliberately targeted.
Aono: There are some out there who are doing quite well and I hope we can generate
more interest among medium-sized system integrators in the future.
Thank you for all the advice. We even had one suggesting that we advertise at theparliamentary dormitory. While we have not been able to consider all of the advice here
and now, I hope we can respond to them in some form so that they do not go to waste.
Through today’s event, we have had the chance to let you listen in on what Cybozu istalking about internally, and bolstered by your advice I hope that we can become astronger and wiser organization and make further progress toward realizing our vision.
I hope we can continue to count on your support.
This concludes Part 1. Thank you for your time.