Company history

Otsuka Minoru founded the company in July 1961, at thirty-eight, on about $833 (¥300,000) — his severance pay and the surrender value of a life-insurance policy. He had come to it through repeated defeat. Born in 1922 to a pottery dealer’s family in Tochigi, sent to the Burma front in 1943 and repatriated in 1947, he joined Riken Optical (later Ricoh), made his name as its top salesman, then led a revolt against the founder-president Ichimura Kiyoshi, lost, and left. The paper company he set up next failed; so did a flash-bulb venture he funded. He was working at a copier-supplies dealer when he started again on his own account.

The trade he entered sold office equipment to large companies with money to spend — and those customers were already locked up by the established trading houses. A late entrant with almost no capital had no way in. So Otsuka went where the competition would not: small and mid-sized firms, where each order was tiny and collection was laborious. He brought the machine to the office, sold it for cash, and stacked up units one at a time. The founding slogan, サービスに勝る商法なし — “no business method beats service” — was a plain statement of the arithmetic: on customers this small you cannot compete on price, only on the speed and density of your response.

That produced the asset the company still runs on — a branch network laid down at the density of newspaper delivery routes, each branch staffed with both sales and maintenance so a single ream of copy paper could be delivered at once. By 1978 there were 41 branches — 25 in Tokyo, 9 in Osaka — carrying some 45,000 users at roughly 1,000 per branch, with service vans running four circuits a day. Otsuka Minoru described it in military terms: the branch was the squad, three or four squads a platoon. The point was less the toner than the visit: every delivery was an occasion to look around the office and propose the next machine. This was the germ of what the company would later call stacked selling.

In October 1979 Otsuka began selling SMILE, packaged accounting, sales-management and payroll software it had written itself — unusual at a time when dealers resold hardware and left software to others. From 1981 it added personal computers and word processors, and in 1982 it opened OA Centers that demonstrated the machines locally and sold them wrapped in training, positioning the PC not as a product but as a way to fix a workflow. CAD followed in 1984, networking in 1987; a development arm, Otsuka System Engineering (today OSK), took over SMILE in 1984. In April 1990 came a subscription support contract, Total-α — the ancestor of today’s たよれーる maintenance business.

The decisive move of the period, though, came from the balance sheet. Otsuka Yuji, the founder’s eldest son, who had joined in 1981 after a spell at the Bank of Yokohama, was alarmed by borrowings of $780.7M (¥87bn) — roughly half of annual sales. There were only two ways to reduce them, sell more or cut more, and in 1993 he chose the first, in a form that was really an argument about method: a plan called the Grand Design that merged the back office and the information systems onto a single PC LAN and consolidated customer records, until then held branch by branch, into one master file. A financial problem, solved as a question of how the sales force works.

It did not pay off quickly. Recurring profit in the year the plan was written was ¥1.15bn, and by 1998 the company posted its first decline in earnings since founding, down to ¥1.7bn. Otsuka Yuji himself dates the start of the core-systems work to 1998 — some five years from drawing to effect. Running alongside it was his father, still president, tearing up the personnel evaluation system in the face of the collapse from minicomputers to PCs, on the reasoning that “yesterday’s expert is no good.”

Selling machines is lumpy work: the revenue arrives once, and it rises and falls with the capital-spending cycle. From 1999 Otsuka set about converting that into something recurring. In February it launched たのめーる (Tanomeru), a membership catalogue and web service through which customers reorder stationery, toner and copy paper — the consumables side of the office, bought again every month. The maintenance contracts descended from Total-α became たよれーる (Tayoreru). In August 2006 the whole service-and-support business was consolidated onto these two brands: repeat purchases of supplies and continuing IT support, together offsetting the one-shot nature of equipment deals.

The infrastructure was rebuilt in parallel. A build-to-order PC centre opened in Tokyo in 1997, a Taiwanese affiliate in 1997 and a Shanghai company in 2006; hosting and document services arrived in 1999, and an internet data centre in 2000 extended the ISP business into hosting other firms’ systems. In July 2000, thirty-nine years after founding, the shares moved to the First Section of the Tokyo Stock Exchange.

In August 2001 Otsuka Minoru handed the presidency to Otsuka Yuji. What the son inherited was not his father’s selling instinct — that was not transferable — but a way of measuring it. In the same year he launched SPR (sales process re-engineering), which merged customer records with sales support so that who to call on, with what, and when became a matter of data rather than of nerve. The branch network had been generating an enormous stream of contact information for forty years; SPR was the machinery that finally read it. Reform begun to pay down debt had turned into the company’s competitive engine.

Growth in the mature phase came from systems integration. SI revenue rose from $2.9B (¥353bn) in FY2015 to $6.0B (¥903bn) in FY2025 — about 2.6 times — lifting its share of consolidated sales from 58% to 68%, while service and support grew from ¥255.4bn to ¥419.8bn and became the profit engine, earning ¥29.5bn in FY2025. Each externally imposed deadline — a Windows end-of-support forcing PC and server replacement, the My Number rollout, remote working, the GIGA School programme putting a device in every pupil’s hands — arrived as a wave of refresh demand, and Otsuka met it by attaching subscription services to the hardware rather than selling the hardware alone.

The policy has a name: “the whole office” — taking on everything from IT equipment to office consumables so that a mid-sized company’s entire back-office need runs through one supplier. Otsuka Yuji puts the room to grow in his existing book rather than in new logos: of roughly 290,000 customers, about two-thirds buy only a single category from the company. On his own arithmetic, counting everything those customers spend annually on IT and office supplies, the addressable market would justify ten trillion yen of sales. What makes the deepening tractable is the data spine laid down by the 1993 Grand Design, now read by machine: seven separate AI models run across the systems in a pipeline, some of them patented, working out which product each account should be offered next.

The corporate scaffolding caught up in the same decade — OSK absorbed Alpha System in 2015, a DX committee in 2020 and government DX certification in 2021, a sustainability committee in 2021, a nomination and remuneration committee in 2022, and in April 2022 the move to the TSE Prime Market. Consolidated revenue rose from ¥515.8bn in FY2012 to ¥1,322.8bn in FY2025, net profit from ¥16.3bn to ¥64.3bn. Otsuka Yuji has now led the company for more than two decades, and the question he names as unfinished is the same one his father faced: who comes next.