WHATEVER happened to the British computer industry? “Ah, that’s another story,” sighs David Courtley, chief executive of Fujitsu Services. His firm, in part, provides the answer: born out of the former British heavyweight ICL, it now battles the American giants IBM, EDS and Hewlett-Packard in the vast and increasingly competitive IT services market.

And after some difficult years, the firm — once British, now Japanese — appears to be making headway at last. Next week Derby-born Courtley will announce a leap in profits on sales of £1.7 billion at Fujitsu Services. This follows a surge in big new contracts, proof that revival is on the way for the old ICL (bought by the Japanese giant Fujitsu in 1990, renamed after its parent in 2002 and now solely a services company).

But is there much of the old ICL left? “Yes,” says Courtley, blinking behind frameless glasses. “At its best there is a great engineering tradition and capability here, and partly we’ve tried to rekindle that in a different way. The quality of people, the engineering excellence: when the company lost its way, that wasn’t being put to work, so we are re-releasing it now, if you like.”

The irony is that, despite having a government that is a world leader in contracting out large IT service projects, Britain has mainly foreign-owned subsidiaries competing for the deals. And the projects touch all of us: Fujitsu Services is providing online record reading for health professionals in the NHS, electronic banking services for Post Office Counters, it has deals with the Inland Revenue, the DVLA, and more.

That’s just in the public sector, part of a total IT services market in the UK that has leapt from £7 billion 10 years ago to £20 billion this year. Somehow it is an opportunity that we Brits have let slip through our fingers.

It is Courtley, by the way, who is pointing this out to me. He is speaking from a spacious meeting room at the Excel exhibition centre in London’s Docklands, taking time off from a get-together of 700 of Fujitsu Services’ senior managers.

Outside, the Thames slops round the docks. Inside, Courtley, 47, makes his points with quiet persistence. Short, blunt, amiable and self-effacing, with shaggy grey hair framing a pouchy face, he epitomises the new breed of low-key boss steering suppliers through the ever more complex IT marketplace.

Educated as a mathematician, trained as a programmer, he cut his teeth developing and selling IT to the military for EDS, rising to head the American firm’s UK operation. He later made the leap into Fujitsu in 2001, after short stints at Computacenter and BT.

And despite the techie background, Courtley has a reputation in the industry for keeping things simple. That appears to be paying off at Fujitsu Services, which in the last financial year has won £4 billion worth of infrastructure management contracts, in a streak of success that sees it snapping at rival EDS’s heels in the public sector. Only two years ago it was making a loss of £133m.

Little wonder the executives at Excel look pretty pleased with themselves.

Why the problems? Courtley, typically frank, says that in the past Fujitsu has been reluctant to get properly involved with ICL. Consequently, despite being the third-largest IT services firm in the world, it failed to punch its weight in Europe.

“If you think about the management style of most Japanese companies, they don’t want to jump in here with both feet, and they still don’t. But what has altered is that their tolerances of making losses ran out, and they wanted to make changes, and that has been useful.”

Courtley was headhunted by the chairman, Richard Christou, to help make the requisite changes. Those who work with him say that he and Christou have radically reorganised the operation, simplifying the structure, removing layers of the old management and closing parts down. Consequently total turnover has dropped, but profits are now rising.