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| Japan Internet Report No. 11 December 1996 ********************************************************** In this month's issue: - Parade of acronyms - Interview with GOL President Roger Boisvert - Industry news briefs - Company name of the month award ********************************************************** Parade of acronyms There are so many new Japanese Internet-related abbreviations going around these days I thought it would be useful to list up a few. This is particularly appropriate now that it's December, when NTT's OCN service is slated to get underway in a limited number of areas (over the past two weeks it's been touch and go whether MPT would approve service startup for this month - at the moment it looks like a go). Some of these acronyms will become quite important to industry watchers over the next year, others will fade into oblivion. OCN This is an important one that you will be hearing more about - Open Computer Network. It's the biggest news in Japan's Internet scene today because it marks the full-fledged entry into the Internet connectivity service business by NTT, the world's largest telecommunications firm. The move will put strong downward price pressure on dialup and dedicated line rates and spur consolidation in the access industry. ODN Open Data Network will be operated by Japan Telecom, a domestic long-distance telephone company and NTT rival. Japan Telecom is a major investor in a new international Internet connectivity service firm called Internet Direct, and is likely to use ODN as the domestic grid to which Internet Direct's satellite circuits will be linked. CNS Computer Network Service is an initiative designed to counter OCN with similar services but lower rates. Participants include TEPCO-affiliated new common carrier TTNET, IIJ, and the Wide Project. WCN World Computer Network, another fledgling rival to OCN, is being promoted by OSAKA MEDIA PORT (OMP). The company claims it will offer both lower rates and in some respects a broader service menu compared to OCN. JIH KDD figured that since all those carriers got to have those nifty acronyms, it should too. So it came up with Japan Information Highway, a scheme to link up domestic nodes using its own circuits. ********************************************************** Interview with GOL President Roger Boisvert This month we feature an online chat with Roger Boisvert, founder and president of Tokyo-based Internet connectivity service provider Global OnLine (GOL). GOL has been an influential force in the shaping of Japan's ISP market, and currently provides dialup connectivity services to about 5% of JIR readers. - What is the most interesting application of Internettechnology you've seen in Japan to date? On a personal level, the ability to listen to a 24-hour live radio broadcast from Canadian Broadcasting. It is wonderful to be able to listen to radio from back home after so many years. Real Audio is a truly excellent product. On a business level, there really is very little in the way of interesting applications in Japan. We are not really at that stage yet. Companies are still only beginning to learn how to use these technologies for real business purposes, such as improved customer contact, streamlining work, improved profitability, etc. However, a direct answer to the question, intranet applications I see beginning to happen are about the most exciting uses of Internet technologies I've seen. While companies in Japan (and in the U.S. for that matter) have not yet learned to use the Internet effectively for business promotion, etc., they have learned a few things about intranet. The desire to understand more, and to use the technologies more effectively is very strong. Knowledge of precisely how to do so is very weak in Japan. I have seen a few really useful business applications on intranet so far, but the few I have seen provide excellent value to the companies using them. The greatest difficulty in implementation should be lack of specific technical knowledge, but it is not. To be sure, there is a lack of people with the technical knowledge, but the real problem is simply a lack of vision of how to really use an intranet for the benefit of the company involved. This is more of a strategic issue than a technical issue. As a former McKinsey consultant in strategy and in IT, the need I see is for strategic uses, creation and presentation of the right knowledge and facts to the right people. We all need information to do our jobs properly. A great challenge for companies is to determine which is the right knowledge and facts needed, for which specific people. Making it accessible across LAN, WAN or intranet is only a technical part of the problem. The real issue is the decision making before then, and that is the real problem as well. There really should be no conceptual difference between a LAN/WAN or an intranet. The only real diifference is the tools available to help serve whatever the real needs are. One shouldn't choose the tools, then determine the need. "Today I want to work with a screwdriver. Show me a problem that I can fix with a screwdriver" is clearly the wrong attitude. The more reasonable attitude is to examine the need, then determine the tools. If a screwdriver is the right tool, then it should be used. If a wrench better serves the need, then that is what should be used, but, only after examining the needs. Choosing which tools, the intranet, LAN/WAN, etc. decision should come after the more strategic decisions, though this is rarely the sequence of events normally used. I have seen a number of small, but very useful intranet appliations,everything from corporate internal phone books, company rules, business decision making charts, knowledge bases on technology, internal documentation, competitors, and customers. The ones I liked the most in a way were the simplest ones, the kind that any company could create; simple internal lists that were updated regularly, etc. Excellent use of simple technologies for positive effect. - What unmet Internet-related needs do you see in the Japan market that might represent opportunities for foreign companies? It's interesting that you ask this question. I just returned from a trip to Canada doing a presentation tour for JETRO, trying to inform companies foreign to Japan that it is possible for them to do business in Japan, and possible for them to break through regulations, policies, and distribution issues. As I indicated in response to the earlier question, there is a great shortage of systems people with the skills needed for Internet and intranet applications, especially in firewall needs (mostly intranet). There is an equivalent shortage of skills in systems integration as well. This is an area that has historically not been very advanced in Japan, except key systems, especially for large companies. The other shortage (need) I saw is for consultants beyond the standard Systems Integration role who understand more about, and can consult on strategy as well. In terms of hardware, software, etc specifically for Internet : there is a high cost for communications in Japan, much beyond what exists in NorthAmerica. Any hardware or software that helps to cut the costs of communications should well succeed. I am not talking about Internet phone, but rather data compression tools, hardware and software; entertainment products, easier to set up and maintain firewalling systems, software and hardware, etc. etc. - How do you see the proliferation of backbone-typeservices such as OCN, ODN and CNS affecting the Internet scene in Japan? I fully expect that 90% of the ISPs in the Tokyo region who are focused on the price sensitive markets will suffer very badly. Those providers that survive will need to differentiate themselves in ways other than low price. I see this in three different segments; small local providers offering a small local service, specialty providers with more specialized services providing very distinct services, and the final group will be the largest providers competing for the corporate and mass market segments. Near term it will likely result in the demise of hundreds of Tokyo-based providers. Tokyo is over-represented at the moment, while other regions in Japan for the most part are underserved. That is why I focused on Tokyo in this response. - In the early days, non-Japanese folks like you played quite a significant role in shaping commercial Internetconnectivity services in Japan. Why was this? In the early days Japanese people did attempt to break into the market, well before I did, yet, it took me, a foreigner to find the solutions. We created the very first government-authorized commercial Internet in Japan. A number of Japanese-led companies had tried, but, not succeeded in getting government authorization. A large number of people and companies felt it was simply impossible. The few who tried couldn't find the way through the maze of regulations and government policies. Foreigners often bring new ways of thinking, and different ways of seeing problems, issues, solutions and opportunities. It took the eyes and mind of a foreigner to break through with new ways of seeing the problems. Once one person finds the way then others can follow the path through the forest of regulations and policies. The reason I related this story was to express with a clear example that it is possible for foreigners not only to do business in Japan, but, because of their somewhat different ways of looking at things, they sometimes have an advantage over Japanese people and companies. Part of the answer to your question, though, needs to explain that people who lived in North America had already been exposed to the Internet. Japanese people had, for the most part, not yet been exposed. For us, it was old-hat. For Japanese people here, especially corporate leaders it was all quite new: "Internet? What's that?" Roger BoisvertGlobal OnLinerjb@gol.comhttp://www.gol.com ********************************************************** Industry briefs JAPAN TELECOM decides to lease OCN routers JAPAN TELECOM has decided to lease Open Computer Network (OCN) routers from NTT for use in its Open Data Network (ODN).Although ODN is being set up as a direct competitor to NTT's OCN, JAPAN TELECOM will use its rival's network to provide access lines andwill base the ODN on OCN routers. JAPAN TELECOM faces the same problem with its data network as it does in voice communications: it needs to use NTT local network facilities to access its network. NTT's OCN is scheduled to begin operations in December, while the ODN is expected to start in April 1997. KDD planning to forge Internet interconnections with cable operators nationwide KDD disclosed plans to forge Internet gateway interconnections with cable television operators across Japan in a bid to develop a business providing those operators with Internet-related services such as system design and management, network monitoring, and server rental and co-locating. KDD offers a high-bandwidth gateway service to major domestic Internet access providers through a partnership with MCI, and wants to provide a mechanism whereby cable operators can offer their own connectivity services. KDD hopes to use its direct overseas connection with MCI to compete with rivals such as IIJ who are attempting to provide similar outsourcing services to cable firms interested in the Internet connectivity service business. Credit card companies move to establish standard EC protocol Ten credit card companies are moving to establish a standard electronic commerce transaction protocol. JCB, UC CARD, SUMITOMO CREDIT SERVICE, NIPPON SHINPAN, and others have organized a group to study the Secure Electronic Commerce Environment (SECE), a protocol being developed by HITACHI, FUJITSU and NEC. The group will try to anticipate problems with developing a safe transaction system, then decide basic specifications for the standard and determine how to operate a credit approval office. With NTT DATA COMMUNICATIONS having already decided to have its CAFIS credit transaction network, Japan's largest, comply with the SET standard proposed by VISA INTERNATIONAL and others, the credit card industry may see a protocol dispute between the SECE and SET groups. JUSTSYSTEM to start selling files online next spring Software giant JUSTSYSTEM will start selling files via its JustNet online service next spring, using "Just Digi-Trade," a distribution/encryption/settlement system developed in cooperation with NTT. The company claims it will be Japan's first service to enable purchase and delivery of software files entirely online. Out of bandwidth considerations, the service will initially offer relatively small, low-priced files such as research study results, newspaper stories, photographic images, and corporate information, rather than data-intensive PC programs. JUSTSYSTEM plans to offer approximately 10,000 files from 100 companies by the end of the first year, while partner NTT hopes to sell the Just Digi-Trade system to other online vendors of small price point merchandise. MATSUSHITA, DIBA develop telephone with Internet functions MATSUSHITA ELECTRIC of the U.S. has developed in cooperation with Internet/information appliance startup DIBA of California a telephone equipped with a 5x7cm LCD display and the ability to send and receive e-mail and browse the World Wide Web. The device, to be displayed at Comdex next week, makes going online much easier compared with personal computers and will cost less than low-priced PCs, according to MATSUSHITA. A company spokesman said MATSUSHITA ELECTRIC would develop other information appliances with DIBA, which also has alliances with companies such as NEC and SAMSUNG. ********************************************************** Company name of the month award: To D-Brain, a management consulting firm that offers a Web-based service called Internet Investment Venture Mart which links startups with potential investors. ********************************************************** It's going to be a busy December, and we may take a rest from publishing JIR in January, putting out the next issue in February of 1997. All the best to you and yours over the holidays! Tim Clark Editor Copyright 1996 by Digitized Information, Inc. and TKAI All
rights reserved NOTE: Some JIR industry briefs appear later in Computing Japan magazine under modified titles. JIR is co-sponsored by Digitized Information, Inc. of Tokyo, a leader in providing daily English language coverage of electronics industry developments in Japan. For more information on monitoring electronics industry developments in Japan, or to receive a free e-mail sample of service offerings, please contact Digitized Information at diginfo@gol.com |
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