Japanese industrial giant Fujitsu is using its clout in the computer hardware business to enter the profitable market for e-business software. Although the $49bn (about £33bn) company may find it hard to break into the ranks of companies dominating the application-server software market, the addition of home-grown software to its line-up may help it sell more hardware, analysts said. Fujitsu plans to import its family of e-business software, currently sold in Japan, to the North American market, which is dominated by Microsoft, Oracle, IBM and others. Later this summer, its San Jose, California-based subsidiary, Fujitsu Software, plans to release in the United States its application-server software that runs e-business and other Web site transactions. Though it's a lesser name in the US technology equipment market, Fujitsu is a powerhouse in Asia and Europe. The company makes everything from semiconductors and disk drives to specialized software and network equipment to PCs and mainframes. In its fiscal year 2000, the company reported revenue of $49.6bn. Roughly 37 percent of Fujitsu's sales -- and the bulk of its profits -- come from software and services. Fujitsu has been in the application-server business in Japan since the early 1990s, said Ronald Alepin, general manager of Fujitsu Software's enterprise products division. "We're big in Japan, but we now want to enter North America. And this is our big push," Alepin said. Despite its deep pockets, analysts say, Fujitsu will have a tough time breaking into North America, considering the number of entrenched players fighting for a relatively small amount of business. In the $1.6bn application-server market, BEA Systems ranks first with 35 percent market share, followed by IBM with 30 percent, according to Giga Information Group. Other competitors in application servers based on the Java programming language include Oracle, Sun Microsystems' iPlanet, Sybase and Borland. The Java supporters all compete against Microsoft's Windows-based e-business software. Hurwitz Group analyst Evan Quinn said that Fujitsu's strategy with software resembles Hewlett-Packard's recent focus on the software market. The companies can compete better against Sun and IBM on hardware sales if they also offer the software that runs on top of their computers and servers. "Most people prefer a single provider for their hardware, operating system, system management tools and software," Quinn said. But Quinn said Fujitsu will have a tough time cracking the US market. "There's not a lot of room in the market for new entries in North America, but there's a lot of unclaimed territory in Asia and even in Europe," he said. "There's a significant amount of marketing done by IBM, BEA, Oracle and the others. For Fujitsu to come in, they have to get recognised. It will be a tough road." The application-server software market has consolidated rapidly in the past few years. HP, for example, bought Bluestone Software last October. Before that, BEA Systems acquired WebLogic, and Sun acquired two application-server companies: NetDynamics and Forte Software. "Fujitsu's been below most people's radar screens in the US," said analyst Mike Gilpin, of Giga Information Group. "Fujitsu has an impressive list of (customers) in Japan for their Java application server, but unless their market presence in North America increases dramatically, it's unlikely that would translate into more than a small market share here." The company previously released its iFlow "business process automation" software, technology that allows companies to choreograph how an e-commerce site functions and how information is passed through computing systems to complete a transaction. Fujitsu's fourth version of its application server will be released in the third quarter, and it supports the Java standard for writing business software, called Java 2 Enterprise Edition. After that, Alepin said, Fujitsu plans to round out its family of e-business software by releasing other products already available in Japan. That includes an integration server that allows businesses to link with its customers, suppliers and business partners, as well as a portal server that allows companies to build portal Web sites for their employees and partners. For complete enterprise coverage, see ZDNet UK's Enterprise Channel. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forum. Let the editors know what you think in the Mailroom. And read other letters.