 |
|
| Japan Internet Report No. 15 April 1997 ********************************************************** In this month's issue: - What a 15th month! - Interview with Vincent Gebes, General Manager of PSInet Japan - Industry news briefs - Three Golden Rules of Japanese banner advertising - Japanese Web report nearing completion - JIR policy review ********************************************************** April 1997 marks the 15th month for JIR, and what a month it's been! Checkout the story on Fedex, for example - fantastic! Vincent Gebes of PSInet Japan provided us with a dynamite interview this month.Look forward to JIR's conversation with Computing Japan Editor-in-Chief William Auckerman next month. ********************************************************** This month we had the pleasure of speaking with Vincent Gebes, General Manager of PSInet Japan. The following is the complete conversation. - The Internet in Japan is much more Web-centric than in the U.S. Why do you think this is so and what implications does it have for ISPs, for example? I think this is a very interesting observation and is true to a large extent due to historical and cultural factors. Although Japanese businesses have been using computers for internal data processing for quite some time, widespread use of PCs throughout the company developed well behind the desktop computing trend in the U.S. This is partly because of the relative difficulty of creating a standard input system for Japanese writing. The result has been a business culture where handwritten documents prevail and text input skills are a specialty rather than a necessity. Although this is changing rapidly, it is still a well understood characteristic of Japanese companies, often referred to in Japan as 'keyboard-phobia.' In the U.S., text based applications, most notably word processing, have been widespread for much longer, and the initial electronic mail and news applications available on the Internet in the early 90s are exactly what proved to be so popular for early commercial Internet services. However, in the same way that the multimedia interface provided by WWW browsers brought the Internet to a whole new set of business applications in the U.S., it provided an interface that did not depend completely on keyboard input and which could be useful in Japan immediately. Therefore, the development process has been somewhat reversed in Japan. Where it was the widespread use of text applications inside companies that made email and enews so attractive and spurred the initial growth of the Internet in the U.S., the deployment of more and more Japanese web content has made the Internet more useful for Japanese companies, and has led to more use of email and other text applications, and in fact has even contributed greatly to the growth of PC sales in Japan, in my opinion. More people have learned to type, as well. :-) This has a couple of implications for Internet Service Providers. Notably, since setting up a web page is a top priority for most new commercial Internet users, helping the customer coordinate content is often required. Many ISPs provide content creation and management services, while others set up strategic relationships with companies who can provide these services. Another implication is that startup costs for new Internet users in Japan can be much higher in Japan than in the U.S. Putting aside the hardware and software costs of setting up a new server, content creation and server administration costs can be overwhelming for companies who are just starting out on the web, especially in Japan where system administrators with Unix and networking skills are very hard to find. For this reason, web hosting services which outsource the web server maintenance are proving extremely popular. Our PSIWeb service, for instance, provides customers with a fully functional web server right on the Internet backbone at a fraction of the cost of setting up a server in house. I believe that the availability of services such as PSIWeb, coupled with the difficulties of setting up and maintaining web server hardware and software, will push Japanese companies to do more outsourcing for their web services than U.S. companies have done initially. - You mentioned in our pre-interview interview that there is more of a consumer focus to the Internet in Japan compared to the U.S. Could you elaborate? There certainly is a healthy consumer market in the U.S. However, I think that the Japanese Internet does seem to be more consumer oriented. Part of the reason for this may simply be the greater concentration on WWW technology, as we have discussed. Since U.S. companies are more accustomed to using email for both internal and external communications, there is a wide base of corporate users in the U.S. who use the Internet mainly for business communications. In Japan, since the web has been a driving force in market growth since the beginning, most organizations are using their web based Internet services to offer content to customers and consumers. Another reason may be the way the popular press has treated the Internet in Tokyo. Although there is certainly information available concerning using the Internet in a corporate environment, in a metropolitan area with such a huge percentage of the population there is a natural focus on individual consumers. If you look through the multitude of Internet related books and magazines which are out there, most of them focus on consumer content, individual homepages, and technical support for consumer connection services. One interesting anecdote: My wife's personal home page has been introduced in three magazines and portions of it published on CD-ROM. Many of my friends have had their web pages introduced as well. The "consumer Internet" in Japan has spread from the net itself to traditional mass media in a manner much different from the "business Internet." and is more visible in my opinion. Finally, there is a fundamental lack of separation between the consumer services and the corporate services in Japan, even now. When IIJ started their dialup PPP service in 1994, there was no notion of "corporate" vs "consumer" use. At that time, most companies did not have LAN environments, and except for very large corporations most Internet connectivity came one machine at a time in the form of dialup PPP connections. Typically, each department or section in a company would have one or two connections, and users would share. As LAN-based connection services have become less expensive and LANs have become more common, there has been a shift toward LAN-based services, but even today many companies are connecting to the Internet one machine at a time. This makes it more difficult to guess what proportion of Internet use might be business related rather than consumer. As a leading provider of corporate Internet services, PSINet certainly does have perspective with respect to growth of business related Internet use, and we will continue to help increase that growth with innovative services that help businesses get more out of their Internet connection. But that's another story... :-) - There've been a lot of announcements lately about Internet-based telephone service startups in Japan (true phone-to-phone, not PC-to-PC). How do yousee these new services developing? Will they be successful, and how will they fit in with the conventional telecom structure? There is a lot of speculation with respect to improving voice over IP technology. There certainly is a place for audio and video services on the Internet. Will the Internet replace the existing telephone and broadcasting networks? Well, no, I don't think so (my opinion only :-). The Internet is a computer network. Sure, you can turn realtime sound into a network service and deliver it on the Internet, but what do you gain by plugging existing telephones into the Internet and using it as a bypass network? The major advantage is that you can get "free" telephone service. But of course it isn't really free. If you look at the economics of delivering two party voice conferencing (a typical phone call), the existing telephone network is much more efficient than the Internet. There are a couple of factors that make such services attractive now. First, the current regulatory structure for phone service throughout most of the world gives phone companies real or virtual monopolies that result in the often high tariff rates for that service. If you look at services with more competition, such as long distance, you will see much lower service charges as regulations are relaxed and competition occurs. Second, the technology and economics of IP networking have allowed Internet providers to deliver valuable services with a "best effort" network. There is no quality guarantee for end to end communications. If you must guarantee an isochronous bit rate for a certain application at a certain time between two endpoints, the economic model will change and the cost will increase. The POTS network is much more efficient for one-to-one voice service and it works today. So, in light of the rapidly increasing competition in the voice telephone markets (including such services as callback for international, public long distance deregulation for domestic, and even perhaps some small number of "Internet bypass networks" should they become available) and given the lack of standardized, deliverable Internet phone technology today, its hard to imagine these services becoming a true competitor to existing phone networks for basic voice service in the near future. Of course, PSINet has the best network design for realtime IP services in the industry, so if I am wrong we are well positioned. That too is another story... :-) However, because the Internet is a computer network, there are many value-added voice and video applications that should prove successful, especially in the business world. Realtime conferencing with shared computer documents, whiteboard applications, and intracorporate video conferences come to mind. I think that this audio/video Internet technology will change the way people communicate through new applications such as these, and that rather than replacing traditional phone communication or broadcasting you will see an explosion in new uses which take advantage of the Internet's natural strengths as a computer network. One slightly different example: PSINet has recently launched a remote printing service called Internet Paper, which will allow remote printing of documents to FAX machines worldwide. Of course thisservice will not replace the office FAX machine overnight. What it willdo is increase productivity (remote printing to a FAX machine direct fromthe desktop) while lowering costs. It is this type of service, which adds value over the current system, that I think will be successful in the audio and video applications areas as well. - Please tell us the complete Vincent Gebes story in 25 paragraphs or less,including how you came to be working in such a strange and wonderful country. I was born in Chicago, IL, in 1967 and grew up in a small town near Lansing, MI. In the summer of 1983, while I was still in high school, I had the opportunity to spend three weeks in Japan visiting a friend. Although it was a very short stay, the people I met and the experiences I had instilled a great interest in the country and its culture. When I entered the undergrad program in Computer Science at the University of Michigan, there was a requirement to study a foreign language, so I chose Japanese. In 1988, after my sophomore year, I chose to take a year off from my studies and participate in a nine month exchange program in Shiga Prefecture, near Kyoto. I returned to Michigan the following year to finish my degree, but knew that I wanted to return to Japan for a few years after graduation. My timing turned out to be excellent, as a subsidiary of AT&T called AT&T Jens (Japan Enhanced Network Services) was looking for computer programmers with a Japanese language background for development of application software. In the summer of 1990 I came to Tokyo and worked on a variety of products before joining the newly created Internet business team in early 1993. This team brought up the first commercial Internet link in September, 1993 with a link to Performance Systems International in the U.S. For personal reasons, I decided to leave AT&T the following year, and I joined PSINet (at that time Performance Systems International, or PSI) in October, 1994. PSINet was the first nationwide commercial IP network provider in the U.S., an Internet company formed by people who had helped build the network and technology even before the days of the NSFNET backbone. Pioneering new Internet technology such as ISDN access, LAN dialup access, Frame Relay and ATM switching, and IP over CATV, PSINet has led the Internet services market with innovative solutions for customers. PSINet today is one of the largest providers of corporate Internet services worldwide including both connectivity and value added application services. Upon joining the company in October 1994, I returned to Japan after a few months training in the United States to our newly formed subsidiary, PSINet Japan, where I am now General Manager. Thanks very much for the opportunity to participate in the interview, Vince Gebes PSINet Japan info@jp.psi.net - Cancellation instructions are included in every issue. - The subscriber list is never disclosed outside of TKAI, and we do not use the subscriber list to send anything but JIR. - We do accept 'advertorial' advertising (www.tkai.com/services/e-marketing/lists.html) if the message is truly of interest to readers. - JIR is free and published basically whenever we can find the time, which until now
has been once monthly. 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 |
  |