Back to Contents of Issue: January 2000

Japan's telecom infrastructure good? Opportunities abound

by John Stern

We recently left a Japanese training center shaking our heads. Logon had been invited to lecture on the Internet at a sparkling new facility, equipped with the latest Bose speakers, Sony wireless microphones, and Matsushita projection equipment. Just when one thinks that the natural ascent of man demands equipment to display PowerPoint animation, Logon found that none of the lecture rooms had any way to hook up a personal computer to a projection screen. Of course no access to the Internet was available. Yet, just as paving contractors are happy to fill in cracks in Japan's roadways, foreign IT companies are doing a good business filling in potholes on Japan's information highway.

The government training facility had plenty of whiteboards, about 50 of them. They join another 7 million in use in Japan. Jaemes Shanley built Nippon Polaroid's package software distribution business from a sideline for the film maker to over 20% of Polaroid's sales in Japan. Now he has taken over as Asia-Pacific general manager of Virtual Ink, a startup full of MIT and Polaroid folks, and their Mimio product is digitizing the whiteboard. Mimio is a set of port-able, wireless sensors that fit around black, red, green, and blue markers or erasers and stick onto the whiteboard. Unlike most PC-to-analog interfaces, this one takes a mere 30 seconds to calibrate, following voice prompts. The result is that whiteboard presentations can be followed in real time via a PC or network, can be annotated or edited by PC, and can interface with the Internet. Logon rarely sees a PC in a Japanese conference room, but always a whiteboard.

Readers have probably been following the use of convenience stores in Japan as the payment point for items purchased over the Internet from credit-card-challenged Japa-nese retailers. One of the leaders in generating the electronic forms needed to create the barcoded invoices shoppers use to pay at their local convenience store is JetForm Japan K.K., a subsidiary of the Canadian corporation. JetForm Japan is headed by Naoki Iwamitsu, formerly with Cognos Japan.

Maybe someday Japan will accept plastic the way the U.S. accepts credit cards; maybe someday Japan will digitize its conference facilities. As JetForm and Virtual Ink show, in the meantime, there is plenty of opportunity for bridge technologies, and those technologies can be foreign-supplied.

The Euro exchange rate may not be doing well against the yen recently, but European companies have been remarkably active this year in the Japan information technology market. Ulrich Plate of Nacamar Data Communications, one of Ger-many's largest Internet pro-viders, can claim what seems impossible in the dog-eat-dog world of Internet providers: 20-fold sales growth since 1996 on a formula of near-zero downtime, advanced security, and 24x7x365 network operating center support. This quality formula should be a hit in Nacamar's next market, Japan, where it plans to open January 1. Nacamar may partner with an EC extranet provider, World Online, operators of the ambitious CARNET e-commerce network, which ties together banks, insurance companies, car dealers, junk yards, and nearly any other business involved with automobile manufacture, sale, financing, and repair.

The Internet is a worldwide market, and the world speaks many languages and pays in many currencies. It should not be a surprise, given Europe's long experience with foreign languages and currencies, that EC companies are leaders in developing the enterprise resource planning and supply chain management software that tracks multinational product movement. With spending on Y2K largely finished at Japanese multinationals, the local offices of SAP (Germany), Baan (Netherlands), and Business Objects (France) all look forward to further ERP penetration next year. Even Indian ERP implementation consultancies like ISC Consult-ancy Services have moved into the Japan market.

When an ERP system is installed, there remains the often-overlooked task of localizing the hundreds of peripherals connected to the system in office, warehouse, and factory settings around the world. Out of Auch, France, of all places, comes the leader in Japan and the EC in localizing industrial printers on ERP networks, a company named Teklynx International.

Japanese commentators often call Japan's telecommunications infrastructure state-of-the-art, American commentators often find it populated largely by U.S. firms. Logon finds that it ain't necessarily so.

John Stern is President of Japan Market Engineering.

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