The Japanese giants slowly wake up to the Net
by Hugh Ashton
Although the electronics
giant Fujitsu is altering direction, to a more software- and Internet-based strategy,
the general public may not be aware of this change. The problem may actually be
that Fujitsu has been too successful in the past, selling its hugely popular line
of computers. As a result, the company is not typically identified with software,
even though it has sold software in the past--usually bundled with mainframe computers.
In short, software sales on their own have not formed a large part of the public
perception of Fujitsu, especially overseas.
This is just one
of the tasks facing Ryuzo Miyahara, the new president of Fsol (www.fsol.co.jp).
His task is further complicated by the fact that the composite entity that we
know as Fujitsu is essentially a large group of companies, each with its own identity,
often sharing the same turf (both geographically and in terms of vertical markets)
for the same stakes.
The new Fsol
Fsol was formed as the result of a merger between four companies, all in the Kanto
area (the prefectures surrounding and including Tokyo). Fujitsu also operates
software houses in other areas of Japan. However, since programming talent in
Japan naturally gravitates to the Tokyo region, Fsol--with nearly 2,000 employees--possesses
more expertise, both in terms of quality and quantity, than any other regional
software effort. As a result of the merger, Fsol has inherited a number of software
lines, each applied to a specific market. Although Miyahara is well aware of the
vertical and geographical boundaries between the different areas of Fujitsu operations,
Fujitsu is a very free and easy company in which to operate a subsidiary. The
key concept for the company, then, is to cooperate, rather than to compete, with
the sales forces of other Fujitsu group companies.
Among its offerings, Fsol offers the cryptically - named ISS - SV / SC, a retail package
designed to help managers of shopping centers offer turnkey services to their
tenants. However, the main focus of today's software efforts within Fsol is on
the Internet, echoing the driving principle of Naoyuki Akikusa, the Fujitsu president,
"everything on the Internet." As a result, the Fsol offerings include a range
of Web-based products, all designed to help their customers achieve effective
business-to-business as well as business-to-customer e-commerce solutions. Included
in this strategy is the business of being an application service provider, where
an Fsol solution can live on a central server, and be accessed through the Internet.
traditionally provide "one-stop shopping," and here Fsol is no exception, with
the range of services running from providing a Web server hosting service, through
to sophisticated custom solutions. However, Fsol has another key card to play,
which is not as readily available to its competitors. Within the Fujitsu group
is the recently-christened @Nifty (ex-NiftyServe)--one of Japan's largest ISPs,
with over 3.5 million users connected to the Internet, and this provides any Fujitsu
group company (all aiming to help customers to achieve B2B on the Internet) with
an almost captive market, provided by a portal service on @Nifty. The number of
subscribers to the service is still increasing and some estimates place total
users at 10 million in the next 12 months, providing any company wishing to start
an e-commerce business in Japan with a very large, ready-focused audience within
a very short space of time.
But why has Japan,
with its large and well-educated population, been so slow, compared with North
America and Europe, to embrace the possibilities of the Net?
the current era as a time in which dramatic changes will occur. He takes a cyclical
view of history, in which three sets of conditions predominate. Typically, these
cycles repeat at three-hundred year intervals, but in the last few hundred years,
these cycles have sped up dramatically (this seems to be the case in any cyclical
view of history).
The first of these
periods, into which we are now moving and which last occurred immediately following
the Second World War, is the age of expansion and entrepreneurs. Immediately following
the Second World War, companies such as Matsushita and Sony had their beginnings,
fueled by the energy and initiative of individuals who worked hard to build up
Japan from the ashes (literally). Miyahara likes to refer to this as the age of
the Samurai, or to the age of the settler in the pioneer Wild West. In fact, Mr.
Miyahara is a great fan of Western films and enjoys vivid similes such as these,
referring often to the "pioneer spirit" which was present at that time, and is
rapidly becoming more apparent in today's new economy.
The next age is
that of the bureaucracy--and this is the age in which Japan grew and became a
leading economic power. This, however, was gained at the expense of initiative
and individuality. It was a time in which many managers in large corporations
and enterprises gained promotion, not through any exercise of their merits, but
through seniority and length of service. As a result, when the bubble economy
burst, there were many managers in positions of so-called responsibility who were
unable to react to events, never having had to make a significant decision in
the whole of their careers. Miyahara is scornful of the bureaucrats in Kasumigaseki.
Noting that the United States especially is far ahead of Japan when it comes to
software development (except in one noteworthy area, that of games), Miyahara
asks why this should be so and concludes that games are one area of software where
the heavy hand of Japanese bureaucracy has never set foot (my mixed metaphors,
not those of Mr. Miyahara).
Japan and e-com
One very important question that is being asked both inside and outside Japan
is, "When will the electronic commerce revolution begin in Japan?" Miyahara's
answer is an interesting one. He compares Japan to sumo [Japan's national wrestling
sport] and the US to boxing. In boxing, when the bell rings to signify the beginning
of a round, the fighters come out of their corners, and start fighting immediately.
No such strict time keeping exists in sumo--the wrestlers decide for themselves,
within certain parameters, when they start fighting, the exact time being determined
by the state of readiness of the contestants themselves. In the same way, Japan
must make sure that everything is ready before e-commerce becomes a widespread
reality in Japan. The banking system, which still retains some procedures that
would not be totally unfamiliar to Victoria bankers, must be dragged, kicking
and screaming (Miyahara says "uprooted") into the 20th century in order to be
ready for the 21st.
Perhaps this rationalization
and deregulation inside a major Japanese company, with a new emphasis on software
and services, rather than on manufactured goods, signals the start of a new era
for Japan. The rigid systems which grew up in the postwar era in larger companies
in Japan are now coming to an end, as the world moves toward open systems in which
Japan can no longer afford to be isolated, the traditional conservative Japanese
corporate structure has to change.
High Ashton firstname.lastname@example.org
is a regular contributor to Computing Japan Online and J@pan Inc. magazine.
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