GOVERMENT & POLICY

A scientific software initiative
The Science and Technology Agency (STA) will start in FY1998 to develop next-generation software for large-scale scientific computations. The initiative is intended to build a foundation for using the power of massively parallel supercomputers with teraFLOPS-class capability. Two projects will initially be launched to work on programs targeting numerical computations for nuclear fusion and extensive simulation in life sciences. The nuclear software is expected to enable reactor designers to do full-scale simulations of the motion of plasma particles.

Constructing a patent database
In a bid to build a reference collection of data that until recently hadn't been considered directly related to patent issues, Japan's Patent Office will start creating a comprehensive database of computer software and financial sector materials from industry journals and other publications. By collecting data from the fast-moving software and electronic commerce industries, the Patent Office hopes to construct the world's first database of this kind that could prove useful for conducting patent searches and examinations. The Patent Office also hopes to use the database as a new form of patent search tool, one which might become a world standard for search tools of its type.

BUSINESS BRIEFS

Hitachi joins next-generation server project
Hitachi, Intel, Hewlett-Packard (HP), and Microsoft have agreed to develop next-generation servers that will run both Unix and Windows NT. Intel and HP already have a processor capable of running both operating systems. Hitachi, the first Japanese company to participate in the US firms' project, will assign about 100 engineers to a new project division within the year. Plans call for launching volume production of next-generation servers at Hitachi's Toyokawa plant in 1999. Hitachi hopes that sales of the new servers will account for more than 10% of its computer sales in 2000.

MRI to market design support tool
Mitsubishi Research Institute (MRI) has signed an exclusive distributorship agreement with Invention Machine of Massachusetts. MRI will domestically market Tech Optimizer Professional Edition (IM Pro), a design and idea support tool developed by the US firm. The product is based on an invention theory called TRIZ, developed in the former USSR, that helps to accelerate R&D and streamline patent application creation. MRI will set up an organization to localize the tool and provide user support. The company aims to win 3,000 users (at a fee of «2.5 million each) in three years, primarily among R&D staff in the manufacturing sector.

Mission-critical support team
NEC and Oracle Japan have formed a partnership to provide software support for mission-critical systems that run on Unix servers. NEC will permanently station two engineers at Oracle Japan's newly established Diagnostics and Defect Resolution (DDR) support organization. The two firms, which are strengthening their support capabilities, started offering services from July that focus on mission-critical applications in which even short downtime can have a significant impact on a client's business.

Sybase partners with Fujitsu for RDBMS
Sybase Japan has formed a sales partnership with Fujitsu in the relational database management software (RDBMS) arena. Sybase, which holds the number two share in Japan's RDBMS market, is strong in mission-critical applications. But rival Oracle Japan's shipment of a beefed-up mission-critical package in September means intensified competition in the high-end corporate market. Sybase hopes to strengthen its position by teaming up with Fujitsu, which has a strong track record in the Unix server sector. Specifically, Sybase will bundle its SQL Server 11 with Fujitsu's Granpowerª@7000 Unix server. The two firms will also cooperate in executing marketing promotions and providing customer service.

ERP tie-ups launched
Nihon DEC, the Tonen Group, and US-based Ross Systems have formed a partnership in the enterprise resource planning (ERP) package software business. The two Japan-based firms will localize the Ross Renaissance CS ERP package and cooperatively sell it in the Japanese market at prices starting from «3.0 million. SAP of Germany and Oracle of the US are the front-runners in Japan's ERP software market, but their packages are designed primarily for the manufacturing and assembly industries. The Ross product is designed for the chemical, food product, and pharmaceutical manufacturing equipment industries.

IBM Japan, meanwhile, will resell JD Edwards' OneWorld ERP system. This tool-oriented software, one of six that IBM Japan will resell, is aimed at midsize companies. As part of the partnership, IBM Japan will set up within JD Edwards Japan's offices a center for testing the software on IBM computers. JD Edwards Japan, for its part, will set up its own special sales and consulting team to work with IBM on selling the product.

NEC, too, is stepping up its focus on the ERP business. The company in July established an ERP Package Development Headquarters office in order to accelerate joint development of ERP software with Marcam of Massachusetts. While a growing number of Western firms are installing ERP software, Japanese companies have been slower to do so because many domestic corporate work processes differ from international standards.

INTERNATIONAL NEWS

Sony to build PCs in US
Sony will manufacture personal computers in the US. The company has built a new 30,000-units-per-month manufacturing line at its San Diego plant, with production slated to start before year-end. Sony, which previously outsourced its desktop PC production to Intel, has decided to switch over to 100% local in-house production for all models, including the new notebook PC it released in July. It also plans to start manufacturing and selling its own PCs in Europe by April 1999, which will give Sony a three-pronged global PC manufacturing and sales organization.

Intellution expands China presence
Japan-based Intellution, a major industrial software company, will quadruple (from two to eight) the number of its plant control PC software sales centers in China by 2000. The company currently has sales offices in Beijing and Taibei; it markets FIX, software that controls small to midsize plants using PCs and helps users develop a distributed plant control system. A third sales center was opened in Shanghai in September, and another will be established in Sichuan within the year. The company hopes to boost its China sales from ¥140 million in FY1996 to over ¥1.5 billion by FY2000.

Fujitsu expands Asian HDD production
In response to burgeoning demand,Fujitsu is expanding overseas hard disk drive production. The company, which currently produces a total of 800,000 units per month in Thailand and the Philippines, will increase combined output to 1.3 million units per month by the end of FY1997, and to 2 million units per month in the first half of FY1998. Fujitsu will invest some ¥5 billion in its Thai plant to develop clean rooms and install assembly equipment. Plans also call for raising the production ratio of 2.5-inch hard disk drives at the Thai plant from the current 20% to 30% within one year.

MARKET NEWS

New PDA standard set
Six Japanese and US information system makers - including Toshiba, Fujitsu, and IBM - have agreed to create a new standard for PDAs (personal digital assistants). Based on the Network Computer specifications (a dedicated network terminal standard) jointly developed by IBM, Sun Microsystems, and Oracle last year, the new standard was to be finalized in September so that the companies can begin introducing PDAs based on the standard by year-end.

The market for portable information terminals based on the new standard is expected to reach 10 million units in 2000. Major information system makers in Japan hope to play a central role in creating a consortium to compete against Microsoft, which controls the de facto international PC standard.

Mobile NC standard under development
Eleven companies - including Toshiba, Hitachi, Mitsubishi Electric, Netscape, Nokia, Sun Microsystems, and IBM - have agreed to develop a mobile Network Computer (NC) standard. The companies will form working groups to develop a Mobile Network Computer Reference Standard (MNCRS). Three mobile NC models will be based on this standard: the Professional Assistant Model, which will enable mobile NCs to be used just like desktop NCs; the Information Access Model, which will focus on Web browser and e-mail functions; and the Basic Model, which will be designed to run special applications for salespeople and other business travelers. More than a dozen other companies worldwide have expressed interest in the MNCRS, and six Japanese firms, including NEC, Japan Telecom, and Matsushita Electric, will participate in the working groups.

Mac shipments fall
Apple Computer looked likely to show its first-ever year-on-year drop in personal computer shipments in Japan for the period through September 1997. The company initially forecast shipments of one million units for the year, but marketing missteps and product shortages are likely to keep shipments down to about 820,000 units. Industry watchers expect Apple's share of the Japanese market to fall below 10% this year, underscoring its worldwide woes. The company's Macintosh computer shipments reached 893,000 units in FY1996.

COBOL sales are up
No, the COBOL programming language isn't dead. In fact, COBOL product sales in Japan are growing. Leading vendors each expect COBOL product sales to expand in FY1997, according to a Nikkei BP report. Fujitsu's PowerCOBOL85 sales are likely to expand by 70%, from 10,000 copies in FY1996 to 17,000 in FY1997. Micro Focus will likely ship 8,000 copies of Micro Focus COBOL, up 23% from last year's 6,500 copies. And Hitachi expects to increase its COBOL product sales by 44%, from 4,100 to 5,900 copies. The overall Japanese market for development versions of the COBOL language is estimated at ¥3 billion.

TELECOM NEWS

NEC eyes PHS handset market
NEC is aiming for a greater share of Japan's PHS (personal handyphone system) handset market. NEC's share was only about 2% in FY1996, since it introduced only one model for Astel and stopped producing handsets sold under its own brand name. The company intends to release four to six PHS models that support 32K-bps data communications by the end of FY1997, to be marketed by carriers under their own brand names. NEC also plans to develop a hybrid PDA/PHS terminal to be sold under the NEC brand name. NEC hopes to ship, in total, 500,000 units in FY1997.

Making fiber more efficient
Nissho Iwai and Nissho Electronics have invested in Ciena of Maryland to market a large-capacity optical transmission system in Japan and the rest of Asia. They will promote sales of MultiWave 1600, a high-density optical wavelength multiplexing system that can send 2.5G-bps signals on each of 16 wavelengths, to achieve a transmission capacity of 40G bps. The system will enable carriers to expand bandwidth without installing new fiber-optic cable. For comparison, installing additional fiber-optic cable between Tokyo and Osaka would cost about ¥10 billion, while using the MultiWave 1600 system would cut that cost to less than ¥1 billion.

Lower PHS subscription rates
NTT Personal Communications Network has started offering Plan198, a new rate structure whereby its PHS subscribers pay only ¥1,980 rather than «2,700 for basic monthly service. Airtime charges are 50% more, but since a growing number of PHS subscribers are using their portable handsets primarily to receive rather than to place calls, NTT Personal hopes to capture this customer segment. Other PHS carriers are expected to follow suit.

Don't want to stop to ask for directions? Just call.
Toyota Motor and Nissan Motor each plan to launch, within FY1997, an interactive car navigation service that uses cellular phones. This is in part an attempt to bolster support for their respective affiliated cellular carriers, IDO and the Tu-Ka Group. Both automakers plan to set up centers for interactive service within FY1997. Cellular users will be able to call up the center and receive, for example, information on the shortest route to a destination or nearby shopping areas. The companies think that since the new services will use the nationwide cellular network, they will be more effective than VICS (vehicle information and communication system), which requires infrastructure development.

NET NEWS

More e-commerce trials launched
The Cyber Business Association is implementing a three-year electronic money experiment, starting this fall. The association will use an electronic money system developed by NTT that employs IC cards, digital signatures, and other encryption technologies - one that can be used both online and in conventional retail stores. The association plans to complete basic design and system development by April 1998, then move into full-fledged field trials in July 1998. The association hopes to have 1,000 participants in FY1998, and 10,000 users actually moving money between bank accounts in FY1999.

Meanwhile, 10 city banks and about 60 regional banks have joined with NTT in a cooperative experiment aimed at developing a practical form of electronic cash by the year 2000. The group will develop a card that combines the functionality of prepaid cards used at retail stores, bank cash cards, and telephone cards. In 1998, the group expects to issue cards to some 100,000 participants in what it hopes will become Japan's largest electronic money experiment ever. This experiment will directly compete with a Ministry of Posts and Telecommunications-backed postal savings system experiment slated to begin in January 1998. Both efforts are aimed at establishing a de facto standard for Japan's future electronic money system.

Multiple identities
A majority of e-mail users (58%) have multiple e-mail IDs, using different accounts for business and private use, according to a survey by the Japan Users Association of Information Systems (JUAS). This survey was conducted among attendees at Business Show '97 in Tokyo in late May. The most common complaint among e-mail users is the inability to confirm whether or not their sent messages have been received. Among other findings, the survey shows that the most popular websites among Japanese are those related to hobbies, sports, entertainment, the economy, and the arts.

IN 50 WORDS OR LESS

Mitsubishi Corp. and the data processing subsidiary of Osaka Gas have signed a joint reseller agreement with N Commerce of the US to market that company's Windows NT-based Gate Access management system for intranets and extranets.

Japan Energy merged its two Tokyo-based software subsidiaries, Central Computer Service and CTEC, in October. The new company employs 600 people and expects to have about ¥14 billion in sales in FY1998.

Justsystem now provides corporate information supplied by Tokyo Shoko Research on a fee basis as part of its JustNet Internet information service. The service, with data on 630,000 companies, offers standard and economy corporate information, corporate finance information, and corporate list generation.

Fujitsu plans to increase the recycling rate for its PC and mainframe trade-ins to over 70% in FY 1997, up 20% from FY1996.

Microsoft has revised its annual Windows NT Server 4.0 shipment projection for Japan upward by 20%, to 300,000 units. The company will double its support staff by mid-1998.

Virtuality, a leading virtual reality game software vendor based in Tokyo, has released a new VR system. Priced at about ¥1.48 million, it sells for about one-fifth the price of conventional VR systems.

In a move aimed at strengthening its data-related businesses, Mitsubishi Materials in July acquired a 20% stake in Checkpoint Systems Japan.

FY1996 communications equipment production soared 35% year-on-year, to ¥4.2 trillion, according to the Communications Industry Association of Japan. Cellular phone production accounted for more than half of radio communications equipment production, reaching ¥888 billion, up 71%.

Mitsui & Co. has signed an exclusive Japan sales contract with California-based Infospace, developer of Java-based SpaceSQL and SpaceOLAP data warehousing solutions.

Oracle Japan in September launched sales of Oracle 8, the latest version of its relational database software. Oracle 7 has already secured a 60% Japan market share for server-based databases.

NEC has released three models of gateway systems that enable Internet telephony. Shipments started in September.

Toshiba has established Spanworks, a US-based software joint venture with Connexus Licensing of California.

KDD plans by April 1998 to enter the domestic electronic data interchange (EDI) service business under a partnership with GE subsidiary GE Information Services (GEIS) of Maryland.

The Radio Regulatory Council has recommended that the Ministry of Posts and Telecommunications revise its ministerial ordinances in order to facilitate commercialization of CDMA (code division multiple access) cellular phone services.

The number of Internet users in Japan surpassed 6,661,000 at the end of 1996, according to IDC Japan, a nearly threefold year-on-year increase. IDC predicts that the number of Internet users in Japan will reach 31,950,000 in 2000.

Tokyo-based KDD Communications (KCOM) has started offering Internet connectivity outsourcing services.

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