TT-493 -- Office in a Box, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, November 9, 2008 Issue No. 493

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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----------------- PBXL - CUT COSTS NOW! -------------------

Looking for ways to cut expenses in your existing operations
in Japan and around Asia?
If so, PBXL's CommDown program is perfect for you.

Focusing on telecom expense management, our shared savings
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-----------------------------------------------------------

+++ WHAT'S NEW

There wouldn't be too many companies in Japan right now
that are not working on some kind of cost reduction plan.
The line items that might come up in such a plan are not
hard to imagine. Generally companies will start their cuts
with marketing, especially advertising, then move on to
delaying training and removing employee non-salary benefits.
Next would be IT and operations costs, then director
bonuses and shareholder dividends, and finally cutting the
body of employees themselves, starting with part-timers and
freelance/contract staff.

Clearly, this means that if you're in PR, marketing, IT,
and a number of other business areas, you can expect demand
for your services to drop substantially over the next 6
months. UNLESS, that is, you have something in your product
or service mix which allows companies planning such cuts to
actively choose your offering and in so doing to save cash.

Generally buying something cheaper but which is outside the
mainstream of solutions is preferable to laying off lots
of employees -- and so a downturn is often the best time
for a younger entrepreneurial company to be creating and
selling something which is a bit different.

Such contrarian thinking that has made many entrepreneurs
successful, and is a hallmark of the folks behind
Office-in-a-Box (OiB), from Fusion Systems.

Some readers may know the team behind Fusion, led by serial
entrepreneurs Mike Alfant and Ray Ribble, both of whom know
how these economic cycles work. Last time around they were
running a similarly named IT company that sold for many
millions of dollars at the height of the dotcom/IT boom in 1999.
Now they're about to hit the news again by expertly picking the
timing for their release of the cost-cutting OiB
(http://www.oibox.net/). You can read about them in this
month's issue of Japan Inc. magazine at
http://www.japaninc.com/mgz_november_2008_high-expectations.

[Continued below...]

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[...Article continues]

Essentially the Fusion guys have realized that most
companies do not want to be in the IT business and in
particular do not want the cost of a full-time IT engineer
on their premises (sorry, if you are an IT person at a
smaller company, this is a growing trend). And never before
has the promise of saving JPY5m-JPY10m a year been more
attractive than now. At the same time, network bandwidth is
now both reliable and cheap, and by combining this with the
infrastructure of a centralized back office so as to allow
more efficient use of IT resources, as well as network
appliances, a company can get the same or better level of
IT resources that it gets now but for a fraction of the
cost.

This is not a new trend, and companies like Salesforce.com
(SF.com) and Google have been taking the core applications
of companies out of the office and putting them into a
"cloud" backed by banks of professionally (and cheaply)
managed servers, secure backup facilities, and staff for
some years. Indeed, Software-as-a-Service (SaaS) sold on a
subscription basis is making great in-roads all over the
world, including change-resistant Japan. In March, NTT
signed a deal to sell SF.com out to its many major
corporate clients in Japan. This deal marked a sort of
coming of age for SF.com.

The reason for this trend to externally hosted solutions is
simple, there is a minimal upfront investment, no
programming or maintenance costs, and yet for a modest
monthly fee you get an enterprise-class application that
lets you compete with the big boys.

Here in Japan, no one has successfully translated the SaaS
concept to infrastructure, until the advent of Fusion's
OiB. In a nutshell, Fusion's team have taken all the
essential infrastructure and applications needed to run a
network and have concentrated them into a single box
connected wirelessly or otherwise to user PCs (yes, those
still exist). This box can either be on your premises or in
the Fusion data center. The functions in OiB include pretty
much everything you need to run an office of PC users,
including: an e-mail server, web server, user management
control center, UTM firewall, Universal Plug-'n-Play
capability, web filter (site specific, white list, black
list), application filter, WiFi access, file sharing, and
print sharing. These applications are then bundled with a
human-based remote network management and user support
service that keeps expensive support/engineering time
on-site to a minimum, but makes sure that it's available
when it's needed.

The reason why Fusion has been able to make the OiB concept
workable is that they have been able to come up with certain
applications that replace or work alongside the standard
Microsoft and other branded applications that most
companies are so wedded to. The e-mail server for example
is completely compatible with Microsoft Outlook and Outlook
Express, but doesn't require the upfront cost and
time-consuming patch support needed for Exchange Server.
The same goes for the security and other applications.

We think that Fusion is going to have a hit on their hands
moving forward. Saving on the cost of an on-site person to
maintain IT operations is very compelling, and for smaller
companies of less than 50 people, it may help senior
management of meet their current cost-cutting targets
without damaging the core operations of the business.

Not only Fusion's OiB, this general trend of centralized
and thus more efficient operations support is going to
spread quickly throughout Japan, thanks to the current
business environment and the fact that the platforms
being used to deliver these services are open and
transferable between suppliers (thus offering the
"insurance" of not getting locked into a specific
vendor). The movement will start with more adaptable
and aware businesses first, then penetrate more
hard-core companies as they see their competitors
leave them behind.

The reason we couldn't have said this technology would
work 5 years ago, the time when we last had the
recessionary pressure needed to push managers into
making a cost-cutting move of this nature, is that 5
years ago the infrastructure and low-costs weren't there.

But they are here now... and so is the recession.

Also, as some readers may be aware, our sister company,
LINC Media has been offering for the last 18 months a set
of services called LINC BACK OFFICE (maybe we should rename
it LINC BACK-OFFICE-in-a-Box?!), which allows smaller
companies of up to around 25-30 employees to outsource their
accounting, tax, HR, and compliance activities to the
bilingual LINC team. This service is priced lower than the
cost of a full-time person in the client's own office and
can be offered economically for much the same reason as
Fusion's OiB -- because it is more efficient to have a
single-discipline professional concentrating on a given
range of tasks on a multi-company basis than it is to have
a single multi-tasked person in one office.

Actually, it's not only more efficient, it's safer as well --
because it helps to make smaller companies resignation,
sickness, and pregnancy proof. And like the OiB concept,
LINC's BACK OFFICE relies on software tools to improve
effectiveness.

We are aware of other industries where this remote back
office operations trend using software automation and
centralized vendor teams is starting to pick up speed,
including: training and benefits management, building
facilities and asset management, sales, IR, PR, and even
for some board of director level services. Then you also
have the telephone system as a PBX-in-a-box, per the PBXL
service advertised in this newsletter. We expect there will
be many more such services announced over the coming months
if only because this recession is still getting started,
and because it is likely to be quite long.

Will the recession be a long one? Well, right now you have
governments the world over throwing cash at their banking
and (probably) next their commercial sectors. Yes, these
measures are having a temporary ameliorating effect, but
the market seems increasingly nervous about actual earnings
because most of us are not banks or too-big-to-fail car
companies. Thus, moving forward it is easy to see that
there will be lots of lay-offs next year. This will start
a vicious cycle in consumers cutting back their spending out
of fear, and politicians diluting the value of their
currencies. This sets the scenario first for a bout of deflation,
caused by the push of funds into the markets so as to
increase liquidity, then a bout of inflation, as the various
currencies start to find their new (diluted) values in the global
market. Or, worse still, we might get both -- in a case of
Japanese-style 1990's stagflation.

Given that, if your firm is thinking to save money, you
should be looking to move soon, and in our opinion, solutions
like Fusion's OiB represent a very viable direction.

...The information janitors/

***------------------------****-------------------------***

--------- Important Directors' Seminar in English ---------

CCH Japan Presents the "Corporate Directors'
Responsibilities and Duties Seminar"

If you are responsible at director level for your company's
operation in Japan, then you need to know what your legal
duties and responsibilities are. Covered in the seminar are
the following key topics:

- Overview of Duties and Responsibilities of Directors
- Role of directors in company law
- Duties of directors: principles of management decisions
- Obligations to establish internal controls
- Conflict of interest transactions, non-compete deals
- Directors and third party liability
- Lawsuit and court litigation cases
- Insider Trading regulations in Japan
- Recent M&A trends and developments

Date : Wednesday, November19th 1:00pm~5:45pm
Venue: Toranomon Pastoral Hotel '8F Shirakaba'
(4-1-1 Toranomon Minato-ku, Tokyo)

Fees: JPY 25,000+Tax (Regular Fee is JPY 30,000+Tax)
Language: English
Speaker: Attorney from Morrison and Foerster LLP

For more details, please contact: support@cch.co.jp, or
03-3265-1161, www.cch-japan.jp
-----------------------------------------------------------

+++ NEWS

- Winter bonuses to fall 2.9%
- Stronger yen to boost overseas travel
- Fraud in local government escalates
- Music download industry status
- Corporate tax take plummets

-> Winter bonuses to fall 2.9%

A Nikkei article says that the average winter bonus
expected by Japanese employees is likely to drop 2.9% to
around JPY405,378 ($4,000 approx.). ***Ed: We suspect
that it is partly due to an expectation of this income drop
that the government has passed a stimulus package that
includes direct payouts, similar to the U.S. economic
stimulation payments made in the form of US$600 checks
sent out to consumers in May. We note that the U.S.
US$110bn program appeared to have almost no effect on
overall spending, since most people banked the money or
used it to pay down bills.** (Source: TT commentary from
bloomberg.com, Nov 8, 2008)

http://tinyurl.com/6rr8yu

-> Stronger yen to boost overseas travel

While families and older couples are struggling with lower
salaries and bonuses, some consumer segments are still
doing reasonably well. One such segment is perennially
free-spending female singles, especially those in their
20's and 30's. According to internet reservations company
Apple World, a recent survey users indicates that 52.6% are
planning trips overseas this year-end. Apparently the
driver for the sudden up-tick in travel plans is the
stronger yen. As a result, about 20% of Apple World's
female users are planning a typically expensive trip to
Europe. Further, 36.1% of all respondents planning a trip
are planning to go for 6 nights or longer, with about a
third having a spending budget of JPY100,000~JPY200,000
(US$1,000~US$2,000). (Source: TT commentary from
nikkei.co.jp, Nov 8, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20081108D08HH442.htm

-> Fraud in local government escalates

What happens when you put a huge chunk of tax revenues into
the hands of oji-sans running prefectural governments far
from central government? They find a way to keep some of
it. Apparently the latest Board of Audit report to central
government says that all 12 prefectural governments that
were audited were found to have been misusing taxpayer
cash. In fact, half of the local governments had slush
funds that were purposefully set up, despite recent
scandals and subsequently embarrassing resignations over
similar funds. The most common use of these slush funds was
to pay for "business" trips for unrelated projects. ***Ed:
Will they (the pols and bureaucrats) every learn?!**
(Source: TT commentary from nikkei.co.jp, Nov 7, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20081107D07JF341.htm

-> Music download industry status

comScore Japan has issued stats for the online music market
for Japan and has found that Japanese users are taking to
online paid music download sites well, and in the case of
iTunes are using the Apple site almost twice as often as
the global average. The most visited music site out of the
21m unique visits to such sites recorded by comScore in
August, was Yahoo! Music, with 7,340,000 unique visitors.
Next was Sony Connect with 2,921,000 visits, then Sony BMG
Music Entertainment with 2,673,000. Separately, out of 107m
unique users of iTunes globally in August 2008, 13,590,000
came from Japan, second only to the U.S. which had
31,729,000 users. (Source: TT commentary from
marketwatch.com, Nov 7, 2008)

http://tinyurl.com/5uertq

-> Corporate tax take plummets

Government stats state that corporate tax revenues received
in the period March through September 2008 fell a massive
40.9% below last year's take -- and that is before the
worst of the financial turmoil hit. Apparently tax revenues
were around JPY886.72bn (US$9bn approx.), reflecting a 5.1%
drop in corporate earnings over the same period. ***Ed: The
Finance Ministry is no doubt concerned that the government
was going to use reserves to fund the upcoming JPY2trn
financial stimulus outlined by Taro Aso, but now it's not
clear where the money will actually come from.** (Source:
TT commentary from tax-news.com, Nov 7, 2008)

http://tinyurl.com/6et288

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

------------- Looking for English Magazines? --------------

Subscribe to your favorite English magazines today -- TIME,
Newsweek, National Geographic, Scientific American, People
and many more.

eigoTown.com is now offering subscriptions to English
magazines at great prices.

Visit: http://magazines.eigotown.com
Credit cards and PayPal accepted.
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CANDIDATE ROUND UP/VACANCIES

=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions for market
entry customers setting up in Japan, as well as other
employers of bilinguals.

** HIGHLIGHTED POSITION(S)

BiOS now has an opening for an Information Security
Administrator within the risk management section of the IT
support department for a well-known global financial
institution. As part of the Risk Management team you will
assist in the execution of IS programs, enforce client
security policies, track and report on non-compliance
issues as well as provide daily support to the Risk
Management officer in issue management.

This is an excellent entry-level position for someone
looking to bring their IT skill or compliance background to
the busy financial IT industry. The ideal candidate will
already have a grasp of IT technical terminology and up to
2 years of compliance or audit-related experience. In
addition, this role is well suited to candidates with a
strong work ethic and the ability to follow laid out
procedures and lead compliance with new ones. A high level
of fluency in both English and Japanese would be
advantageous for your application.

Remuneration is JPY3.5m – JPY4m, based on your experience.

** POSITIONS VACANT

- Financial Controller, new Japan start-up, JPY8m – JPY10m
- IT Director, global hospitality company, JPY14m – JPY18m
- Account Manager, foreign Media co., JPY3m – JPY4m+ comm.
- Escalation Analyst in an investment bank, JPY3.5 – JPY4m
- Enterprise Helpdesk Engineer in Okinawa – JPY4m – JPY5m

Interested individuals may e-mail resumes to:
stuart.gibson@biosjp.com

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its
job seeking candidates, called BiOS Job Mail. Every edition
carries a list of BiOS's current and most up-to-date
vacancies, with each entry featuring a short job
description and a direct link to the main entry on the BiOS
home page. Regardless of whether you are unemployed and
searching, thinking about a career change, or just curious
to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and
convenient way for you to stay informed. If you would like
to register for the BiOS Job Mail, or to find out more,
please email stuart.gibson@biosjp.com.

Interested individuals may e-mail resumes to:
stuart.gibson@biosjp.com

-----------------------------------------------------------

+++ UPCOMING EVENTS/ANNOUNCEMENTS

--------------- MIDEM/MIDEMNET MUSIC EVENT ----------------

PRICE FREEZE:REGISTER TO MIDEM/MIDEMNET BEFORE NOVEMBER 17

People drive music forward. And MIDEM is about people

* A worldwide community of professionals from every sector
who create and use music in all its forms.

* MIDEM: the world's music market
(18 - 21 January 2009), 9,000 key professionals from 90
countries

* MidemNet Forum: music business in the digital age
(17 - 18 January 2009), 2 days of intense conference
sessions and serious networking with 1,400 international
music executives

Register now at www.midem.com
-----------------------------------------------------------

------------------- ICA Event - Nov 20 --------------------

Topic: Focused on the Bottom Line, Using third party
solutions in Japan for SMEs

Presenter: Tony Fujii - Partner, Fusion Systems
Details: http://www.icajapan.jp/, (RSVP Required)

Date: Thursday, Nov 20, 2008

Time: 6:30 Doors open, Buffet Dinner included, cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members)
Open to all. Venue is The Foreign Correspondents' Club of
Japan

http://www.fccj.or.jp/aboutus/map
-----------------------------------------------------------
______________________________________________________
Events announcements are priced at JPY50,000 per week.
For more information, contact sales at japaninc.com

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** No corrections this week.

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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