What are Cloud ERP?
Cloud ERP is a software-as-a-service (SaaS) solution that provides enterprise resource planning (ERP) functionalities over the internet. Instead of being installed on local servers, it is hosted on a cloud platform and accessed via a web browser, allowing businesses to manage key operations remotely.
Japan Cloud ERP market is experiencing significant growth, driven by the rapid adoption of digital transformation strategies, SME modernization and government-backed IT infrastructure expansion. Enterprises across manufacturing, retail, BFSI and trading sectors are shifting from traditional on-premise ERP systems to cloud-based solutions to enhance operational efficiency, reduce costs and ensure regulatory compliance. The market is further strengthened by AI-driven automation, IoT integration and the rise of hybrid cloud ERP solutions tailored to Japan’s highly structured business ecosystem.
What is Driving the Cloud ERP Market in Japan?
Businesses in Japan are embracing cloud ERP in order to optimize their operations without incurring significant upfront capital costs. The integration of cloud ERP with technologies like Artificial Intelligence (AI), Internet of Things (IoT), Big Data and Machine Learning helps Japanese organizations to stay competitive and nimble in a rapidly changing market. Here's a list of factors driving the country’s market:
- Focus on Enhanced Security and Compliance: The market is significantly driven by a focus on enhanced security and compliance, as businesses prioritize data protection and regulatory adherence. A significant instance of this trend is the Digital Agency of Japan, which, in September 2021, launched the government cloud to accelerate digital transformation across public services. The initiative reflects Japan’s commitment to AI-driven innovation, enhancing administrative efficiency, transparency and citizen services. In June 2024, two cloud engineers from the Digital Agency, Kazuma Takeda and Shinichi Nishihata, shared insights at the AWS Summit Japan, showcasing Japan’s cloud-first approach in modernizing government operations.
- Rapid Adoption of Cloud Solutions: The rapid shift towards cloud-based infrastructure in Japan is a key driver of Cloud ERP market growth, as businesses seek scalability, cost-efficiency and seamless system integration. Companies across industries are migrating from on-premise ERP systems to cloud-based solutions to enhance real-time data access, automation and collaboration. A major instance of the driver is Microsoft’s US$ 2.9 billion investment in Japan’s hyperscale cloud computing and AI infrastructure, which strengthens the foundation for Cloud ERP deployment.
Competitive Landscape:
The top 5 global companies in the Japan Cloud ERP market include:
- SAP SE: Holding over 20% of the share in Japan Cloud ERP Market, SAP SE is also a global leader in enterprise applications and business AI, driving digital transformation across industries for over 50 years. It pioneered enterprise resource planning (ERP) with SAP R/2 and SAP R/3, setting the global standard for business software. SAP S/4HANA leverages in-memory computing, AI and machine learning to optimize business operations. Its integrated applications unify finance, procurement, HR, supply chain and customer experience, creating an intelligent digital suite. With over 230 million cloud users and 100+ solutions covering all business functions, SAP boasts the largest cloud portfolio of any provider.
- Oracle: Oracle Corporation is one of the leading global technology company specializing in cloud computing, database management and enterprise software solutions. Oracle provides cloud infrastructure (OCI), database systems and SaaS applications for businesses worldwide. It competes with AWS, Microsoft Azure and Google Cloud in the cloud sector. The company also offers SaaS applications, including Oracle Fusion Cloud ERP, NetSuite and AI-driven analytics for businesses of all sizes. The company has 19.34% of the Japan Cloud ERP Market in 2024.
- Microsoft Corporation: A global technology leader that develops, manufactures, licenses, supports and sells software, hardware and cloud services. It holds 13.83% of the Japan Cloud ERP Market in 2024. Microsoft’s product portfolio includes the Windows operating system, Microsoft Office productivity suite and the Azure cloud computing platform. With a strong focus on innovation, Microsoft is investing heavily in AI, quantum computing, cybersecurity and digital transformation. It operates globally, serving consumers, businesses and governments.
- Infor: Infor is a leading company in business cloud software specialized by industry. The company holds 7.65% share in the Japan Cloud ERP Market in 2024 and offers comprehensive solutions for various sectors, including manufacturing, healthcare, retail and public services. Infor's ERP solution provides extensive functionality suitable for diverse manufacturing processes. In Japan, Infor has established a significant footprint by offering industry-specific cloud ERP solutions tailored to the local market.
- NEC Corporation: NEC Corporation is a Japanese multinational information technology and electronics company. The company holds 5.80% of the Japan Cloud ERP Market in 2024. NEC provides IT and network solutions, including cloud computing, artificial intelligence and telecommunications equipment and software. The company serves a wide range of clients, including business enterprises, communications services providers and government agencies. NEC offers the "NEC Cloud IaaS," a cloud infrastructure service tailored for the Japanese market. This service provides high cost efficiency, performance and reliability, along with robust security measures and streamlined operation of hybrid cloud environments.
Conclusion:
The Japan Cloud ERP market is highly competitive, with global giants like SAP SE oracle and Microsoft leading the industry. The companies dominate by offering scalable, AI-driven and industry-specific ERP solutions tailored for enterprises undergoing digital transformation. Meanwhile, Infor and NEC Corporation focus on industry-specific ERP solutions, with Infor excelling in manufacturing and NEC leveraging its localized expertise for Japanese enterprises.
The remaining companies of the market is fragmented, consisting of various local and niche players offering specialized solutions. The market’s nature reflects Japan’s strong preference for reliable, compliant and highly customizable ERP solutions, with a growing trend toward SaaS-based cloud ERP adoption to reduce costs, improve agility and ensure seamless business operations across global and domestic locations.
