Japan's software development industry is broadly divided into two development models: SIer (System Integration) and product development. SIer, short for "System Integrator," refers to companies that develop and integrate custom software systems for client enterprises. On the other hand, product development companies plan, design, and develop their own products or services, delivering them directly to end users. Product development may be closer to the Western software development culture.
When building a career as a software engineer in Japan, understanding the differences between these two models is extremely important. Each has distinct development cultures, tech stacks, and career paths that will shape your direction as an engineer.
This article provides a detailed comparison of the cultural differences between SIer and product development in software development, offering a guide to help you determine which environment suits you as a software engineer.
1. SIer (System Integration): Client-Centric Software Development Culture
It's said that 70% of IT companies in Japan are SIer-type companies. This is a significant characteristic of Japan's software industry. Understanding the differences between SIer companies and product development companies is crucial when pursuing a software development career in Japan.
Roles and Characteristics in Software Development
SIer companies (pronounced "es-ai-er" or "es-ai-ya" in Japanese) are specialized companies that handle all aspects of software development for client companies. Main responsibilities as a software engineer include:
- Implementing Client Requirements: Handling everything from requirements definition, design, implementation, testing, to operations and maintenance for business systems required by clients such as financial institutions, manufacturing industries, and public agencies.
- Large Enterprise Systems: Focus on large-scale software projects requiring high reliability, such as banking core systems and municipal administrative systems.
- Multi-tier Development Structure: A hierarchical structure where software development tasks are distributed from prime contractors to multiple subcontractors is common.
- Technology Selection Constraints: Adoption of latest technologies is limited as systems must align with clients' existing systems and infrastructure. Mature enterprise technologies like Java, .NET, Oracle, and COBOL are mainstream.
Cultural Background of Software Engineering
Japan's SIer culture heavily reflects quality control methods from the manufacturing industry. Software development is characterized by:
- Waterfall Development as Standard: A phased process of requirements definition → design → implementation → testing → delivery, with thorough quality assurance at each phase.
- Document-Centric: Detailed documentation, including design documents, specifications, and test plans, forms the core of the software development process.
- Rigorous Quality Control: Strict testing processes aiming for zero bugs and prioritizing stable operation in production environments.
- Importance of Client Negotiation: Even as a software engineer, communication with clients and project management skills are highly valued.
Advantages and Disadvantages for SIer Software Engineers
| Perspective | Advantages | Disadvantages |
|---|---|---|
| Tech Stack | Deep knowledge of enterprise technologies | Limited opportunities to work with modern development methods and latest frameworks |
| Software Development Process | Experience in designing and architecting large-scale systems | More time spent on documentation than implementation or coding |
| Career Path | Clear career path to management positions with upstream skills (requirements definition, design, PM) | Difficult to build a career path deepening technical expertise as a software engineer |
| Development Environment | Stable employment and systematic training programs | Development tools and processes are often outdated, with little emphasis on developer experience |
SIer is an environment to polish "the ability to view entire systems" and "coordination skills with clients," but software engineers passionate about coding and creating products may feel technically unfulfilled.
2. Product Development: Product-Centric Software Engineering
Roles and Characteristics in Software Development
In product development companies, software engineers are deeply involved from the planning stage and become central to technical decision-making.
- Product-Thinking Development: Building software products that solve end-user problems rather than client demands. Examples include SaaS, mobile apps, and web services.
- Fast Development Cycles: Adopting modern development methods like Agile, Scrum, and CI/CD for rapid iteration and feature improvements.
- Freedom in Technology Selection: Ability to choose optimal tech stacks for product growth. Active adoption of latest technologies like React, Vue.js, Python, Go, Rust, and Kubernetes.
- Full-Stack Orientation: Opportunities to work across broad technical domains including frontend, backend, infrastructure, and database design.
- Direct User Feedback: Environment where you can directly feel the impact of your code through user reactions, providing high satisfaction as a software engineer.
Cultural Background of Software Engineering
In recent years, startups and tech companies have been increasing in Japan, gradually spreading global standard software development culture.
- Agile Development Practice: Repeating feature development and releases in short sprints, quickly reflecting user feedback into products.
- Code Quality and Review Culture: Engineer-led quality control through code reviews on GitHub/GitLab, pair programming, and TDD (Test-Driven Development).
- DevOps/SRE Practice: Eliminating boundaries between development and operations, with software engineers involved in infrastructure construction, monitoring, and improvement.
- Engagement with Tech Community: Participation in external study groups and conferences, and OSS contributions are encouraged.
Advantages and Disadvantages for Product Development Software Engineers
| Perspective | Advantages | Disadvantages |
|---|---|---|
| Tech Stack | Learn latest languages, frameworks, and tools in practice | Difficult to gain broad industry knowledge due to specialization in specific product domains |
| Software Development Process | Practice modern development methods with more time for coding | High pressure as you're directly responsible for user numbers and business metrics |
| Career Path | Paths open to technical specialist, tech lead, software architect | Limited position options if the organization is small |
| Development Environment | Environment emphasizing developer experience (DX), often with remote work and flexible schedules | Startups may have inferior benefits and employment stability compared to large companies |
Product development is an environment to "master technology as a software engineer" with the satisfaction of directly contributing to product growth, but focused on a single product domain, requiring effort to broaden perspectives.
3. Software Development Style Comparison: SIer vs Product
Development Process and Engineer Roles
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SIer: Waterfall-type processes are central, with software engineers implementing based on decided specifications. Specification changes involve contract changes, limiting flexibility. Clear separation between upstream (requirements definition/design) and downstream (implementation/testing) processes, with engineers focusing on their assigned phases.
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Product Development: Adopts Agile development, repeating plan → implement → review → release cycles in approximately 2-week sprints. Software engineers participate in specification decisions, proposing technical feasibility and optimal implementation methods. Product managers, designers, and engineers collaborate to create products.
Product Ownership Differences
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SIer: In SIer, it's often difficult to have ownership of products because you must follow client intentions. Also, in Japan's SIer companies where multi-tier subcontracting structures are common, even questioning "why is this feature necessary?" can be difficult. In SIer, where delivering deliverables by deadline within assigned responsibilities is required regardless of whether the feature is actually needed by customers, product ownership is difficult in most patterns. Additionally, when clients lack software development literacy, you may be forced into what seems like irrational development.
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Product Development: Product development naturally requires strong product ownership compared to SIer.
Business Stability
- SIer: Generally, SIer is more stable as a business compared to product development. Revenue is generated based on how many software engineers worked for how many hours, regardless of project success. Compared to product development, future revenue is easier to estimate, and business risk is low because revenue is guaranteed even if projects fail.
This characteristic of SIer can also be a barrier to adopting new technologies. Doubling productivity by introducing new technology doesn't affect their revenue—in fact, it might even decrease revenue due to reduced working hours.
- Product Development: No matter how excellent a product you develop, you cannot achieve sales if the market doesn't accept it. From a business perspective, this is higher risk compared to SIer.
Tech Stack and Tool Selection
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SIer: Technology selection must align with clients' existing systems. Proven enterprise technologies like Java + Spring, .NET, Oracle Database, SAP, and Salesforce are mainstream. For legacy system maintenance, knowledge of COBOL and Mainframe may be required. Development tools are also determined by organizational standards, with limited individual discretion.
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Product Development: Freedom to choose optimal technologies for product requirements. Active adoption of modern tech stacks like Python, Go, Rust, TypeScript, React, Vue.js, Docker, Kubernetes, AWS, and GCP. Software engineers themselves can lead evaluation and adoption of new frameworks and tools.
Code Quality Control and Review Culture
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SIer: Rigorous testing by quality assurance departments is central. Progressing through unit testing, integration testing, system testing, and acceptance testing stages, with checks based on test specifications. Code reviews are conducted but tend to be formal checklist-based reviews.
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Product Development: Peer code reviews among engineers are core to the development process. Engineer-led quality control through mutual reviews via Pull/Merge Requests, pair programming, and TDD. Continuous quality improvement through automated testing and CI/CD pipelines.
4. Software Engineer Career Path Comparison
Career Development in SIer
In SIer, the following career paths are typical:
- Programmer/Junior Engineer (Years 1-3): Coding and testing based on detailed design documents
- System Engineer (SE) (Years 3-7): Handling basic and detailed design, directing programmers
- Project Leader (PL) (Years 7-10): Leading teams, managing progress and making technical decisions
- Project Manager (PM) (Years 10+): Overall project responsibility, managing budget, schedule, and quality
Management and client negotiation skills tend to be valued over technology, making it difficult to build a career as a pure technologist.
Career Development in Product Development
In product development, career paths for engineers are diverse:
- Junior Engineer (Years 1-3): Building foundation through feature implementation and code reviews
- Mid-level Engineer (Years 3-5): Leading design and implementation of complex features, making technical decisions
- Senior Engineer (Years 5-8): Architecture design, technology selection, mentoring junior members
- Tech Lead/Staff Engineer (Years 8+): Setting technical direction for multiple teams, demonstrating technical leadership across products
Alternatively, there's a path to specialize in team management as an Engineering Manager. Both paths—mastering technology and mastering management—are available.
5. Choosing Your Environment: Self-Assessment as a Software Engineer
Use this checklist to determine which development environment suits you:
Software Engineers Suited for SIer (System Integration)
- ✓ Want to gain experience across various industries and business processes
- ✓ Want to learn large-scale system architecture and design skills
- ✓ Interested in client communication and project management
- ✓ Want to build career steadily in stable employment environment
- ✓ Want to gain development experience with mature enterprise tech stacks
- ✓ Want to build career as PM or consultant in the future
Software Engineers Suited for Product Development
- ✓ Want to feel your code reaching users
- ✓ Want to practice latest tech stacks and modern development methods
- ✓ Want to make technical proposals from product planning stage
- ✓ Value collaboration among engineers through code reviews and pair programming
- ✓ Want to build deep expertise as technical specialist
- ✓ Value remote work and flexible working styles
6. Impact of Japan-Specific Software Development Culture
Japan's software development culture has unique characteristics different from global standards.
Thorough Commitment to Quality
In Japanese software development, regardless of SIer or product development, there's a culture of extreme aversion to bugs or failures in production environments. This reflects manufacturing industry's "quality first" philosophy, with enormous time spent on testing and reviews.
Teamwork and Consensus Building
Team-wide cooperation and consensus building are valued over individual outstanding achievements. Even technically excellent decisions tend to be avoided if made unilaterally without team agreement.
Documentation Culture
Written information sharing is valued over verbal communication. Creating detailed documents like design documents, meeting minutes, and procedure manuals is required as part of software engineers' work.
Importance of Japanese Communication
In SIer, Japanese communication with clients is essential. Even in product development, companies using English as the official language are limited, and business-level Japanese proficiency greatly expands career options.
7. Is SIer a Suitable Choice for Software Engineers from Overseas?
This includes my personal opinion, but in many cases, the answer is "No." (JapanTechCareers also lists very few SIer positions) As mentioned earlier, SIer has a strong Japanese manufacturing culture and differs from commonly imagined software engineer roles. However, it might suit those interested in more stable corporate culture or Japanese custom work. That said, SIer companies vary greatly in culture, so more careful company research is necessary.
Especially in SIer companies mainly doing subcontracting work, the proportion of simple tasks tends to increase. You may not believe this, but there are software engineers whose main job is copying dashboard values that update every 5 minutes onto a whiteboard. (They don't need to know what those numbers mean or why that operation is necessary. If the customer demands it, that's what should be done. And they still receive decent salaries.)
8. Conclusion: Career Choices as a Software Engineer
Japan's SIer (System Integration) and product development differ greatly in work style, tech stack, and career paths for software engineers.
- To acquire broad industry knowledge and upstream skills, aiming for PM or consultant, gaining experience in SIer (System Integration) is effective.
- To create products using latest technologies and grow as technical specialist, deeply practicing software engineering in product development is appropriate.
What's important is whether the company's development culture, tech stack, and team atmosphere align with your values. Beyond job postings, verify actual development environments through tech blogs, GitHub, and employee interviews.
Understanding your strengths and direction as a software engineer and choosing an environment that matches them is the first step to building a fulfilling career.
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