In most countries, a “tech company” builds technology. In Japan, the phrase “IT company” covers several very different businesses — and the one you join shapes your salary, your skills, and your daily life far more than the job title does.
Japanese engineers sort companies into these types almost automatically. People applying from overseas usually don’t know the categories exist. This article gives you the map.
Why Japan’s IT industry looks different
Here’s the single most important fact about Japanese IT:
In Japan, 72% of IT workers work at IT companies, and only 28% at “user” companies (banks, retailers, manufacturers and so on). In the US it’s the opposite: only 34.6% work at IT companies, and most work directly for the businesses that use the technology.
— IPA data (2015), cited in Japan’s 2019 White Paper on Information and Communications
In other words, Japanese companies have traditionally outsourced their IT. A bank doesn’t build its own systems; it hires an IT company, which often hires other IT companies below it. That outsourcing culture is why SIers and SES exist on such a large scale in Japan.
The five types
| Type | Japanese term | What they do | Where you work |
|---|---|---|---|
| Product company | 自社開発 (jisha kaihatsu) | Build and run their own product or service | Own office / remote |
| SIer (System Integrator) | エスアイヤー | Design, build and manage large systems for clients | Own office or client site |
| Contract developer | 受託開発 (jutaku kaihatsu) | Build software to a client’s order, usually smaller projects | Mostly own office |
| SES | 客先常駐 (kyakusaki jōchū) | Place engineers at clients to add headcount | Client site |
| In-house IT at a user company | 社内SE / 情報システム部門 | Run the IT of a non-IT company (bank, manufacturer, retailer) | Own company |
1. Product companies (自社開発)
Companies that build their own product — web services, apps, SaaS, games.
- You work on: one product, over time. You own what you build and see how users react.
- Good for: engineers who want modern tech stacks, product thinking, and a clear career path.
- Watch out for: competition for these roles is highest, and small startups carry business risk.
- For foreign engineers: along with foreign-owned companies, this is where you’re most likely to find English-friendly engineering teams. (Among international developers who never use Japanese at work, only 40% work for a Japan-headquartered company — TokyoDev Developer Survey 2025.)
2. SIers (System Integrators)
Japan’s large IT service companies. They take on big projects — banking systems, government systems, factory systems — and manage them from requirements to operations.
Japanese engineers further divide SIers by origin:
| SIer type | Japanese term | Origin |
|---|---|---|
| Manufacturer-affiliated | メーカー系 | Subsidiaries of hardware/electronics makers |
| User-affiliated | ユーザー系 | Former IT departments of banks, trading houses, etc., spun off as companies |
| Independent | 独立系 | No parent company |
- You work on: large, long-running projects. At the prime (top-level) SIer, much of the work is project management, requirements and coordinating subcontractors — less hands-on coding.
- Good for: stability, structured training, understanding how large enterprises run.
- Watch out for: at big SIers, you may write less code than you expect. Work is usually in Japanese.
3. Contract developers (受託開発)
Companies that build software to order: a client asks for an app or system, the company builds and delivers it.
- You work on: a series of client projects, usually at your own office.
- Good for: variety, and seeing a project from start to finish.
- Watch out for: deadlines are set by the client contract. Quality of life depends heavily on how the company negotiates scope and schedule.
4. SES (engineers placed at clients)
Your employer sends you to work at a client’s site, often under an SIer. The client pays for your hours.
I’ve written a full guide on this: SES in Japan: How to Spot a Body-Shop Before You Sign.
5. In-house IT at user companies (社内SE)
The IT departments of non-IT companies. Traditionally they managed vendors rather than building systems themselves, but many are now hiring engineers directly as part of “DX” (digital transformation) efforts.
- You work on: your own company’s systems, close to the business.
- Good for: work-life balance and business understanding.
- Watch out for: at traditional companies, the job can be mostly vendor management and internal coordination in Japanese.
The subcontracting chain: why your position matters
SIers, contract developers and SES companies are often connected in a chain:
End client (bank, manufacturer, government)
└─ Prime SIer (元請け)
└─ 2nd-tier company (二次請け)
└─ 3rd-tier company (三次請け)
└─ ...This isn’t just theory. In 2022, Japan’s Fair Trade Commission surveyed about 21,000 companies in the information services industry — the first investigation of the sector in 18 years. It found problems flowing down the chain, such as unfair price cuts (“buying down”, reported by 15.7%) and reduced payments to subcontractors (13.5%). 33.5% of companies at the bottom of the chain said they were aware of middlemen who add little value but take a cut. (IT Leaders summary of the JFTC report)
For you, the lesson is simple: the closer your employer is to the end client, the more of the money — and the say over the work — reaches you. When you look at an SIer, contract developer or SES company, ask where it sits in the chain.
MARU’s honne: where I sit
I’m a freelance engineer, currently working inside a product company’s team (自社開発) — a team that builds and runs its own service. That’s the lens for everything on this site. When I describe the other types, I’m describing them as someone in the same industry, not as an insider.
How to tell which type a company is
Job postings rarely label themselves. Here’s how to check:
| Check | What it tells you |
|---|---|
| Does the company have a named product you can use or look up? | Yes → probably a product company |
| Company website: “事業内容” (business description) | “自社サービス” = product · “システムインテグレーション” / “SI事業” = SIer · “受託開発” = contract · “SES事業” / “技術者派遣” = SES |
| Is there a parent company? | A large manufacturer, bank or trading house as parent → manufacturer- or user-affiliated SIer |
| Work location in the posting | “Client sites” (顧客先) → SES or SIer placement |
| Who are the clients? | “Major financial institutions and government agencies” → SIer or a company in an SIer chain |
And ask in the interview:
- “What will I build, and who uses it?”
- “Is the work done in-house, or at client sites?”
- “For client projects, is your company the prime contractor?” (元請けですか？)
Which type is right for you?
There’s no single right answer — it depends on what you want from Japan.
| If you want… | Look at… |
|---|---|
| Modern stack, English-friendly teams, product ownership | Product companies, foreign-owned tech companies |
| Stability, training, large-scale systems | Prime SIers (usually requires Japanese) |
| Variety of projects, fast exposure | Contract developers, carefully chosen SES |
| Work-life balance, business-side understanding | In-house IT at user companies |
| Just getting into Japan, with limited experience | Any type that sponsors you — but read the SES guide first |
Summary
- “IT company” in Japan can mean five different businesses: product, SIer, contract, SES, in-house IT.
- Japan outsources IT far more than the US — 72% vs 34.6% of IT workers are at IT companies — which is why SIers and SES are so big.
- Many projects run through multi-layer subcontracting chains. The closer you are to the end client, the better.
- Check the company’s business description, parent company and work location before applying.
- English-friendly engineering roles are found mostly at foreign-owned companies and some product companies.
This article is general information based on public data and my own experience in the industry. Company structures vary; always check the specific company.
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