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| Japan Internet Report No. 7 August 1996 This month we introduce an occasional series of interviews with Japan-based Internet industry professionals and observers, starting off with a talk with Bruce Hahne, former Vice President for Technology at Global OnLine Japan K.K. We're also adding more commentary to our news coverage. You'll see this reflected in the headlines and increased length in some instances. * * * * $19 to buy year of e-mail connectivity in Japan Tokyo-based Internet connectivity service provider DYNANET SERVICE ASIA will from August 1 offer e-mail only Internet connectivity for only 2,000 yen ($19) per year. The new Mail Members service will be limited to the first 3,000 users who sign up, according to the company. DYNANET has recently started focusing on business users, who it believes use e-mail more than any other Internet function. Observers of Japan's online scene say low-cost, limited feature services such as Mail Members are likely to become more popular among Japan's Internet users, particularly business people who are inclined to focus only on those functions that offer real utility. Ten cable operators say they'll offer Internet connectivity from October Ten cable television operators said they plan to offer Internet connectivity services through Tokyo-based INTERNET INITIATIVE JAPAN (IIJ) starting in October. The ten companies, which include JUPITER TELECOM, CTY, HIMAWARI NETWORK, and ADACHI CABLE TELEVISION, will start conducting experiments with IIJ in August and plan to acquire Type I telecommunications carrier licenses by October. IIJ will set up a new communications center in Tokyo that will be linked to the cable firms via 45M lines to create an Internet connectivity grid independent of the conventional telephone system. Analysts say IIJ and its new partners are likely to charge about 3,900 yen ($36) per month for 40 hours of connectivity, the same rate to be offered by forerunner MUSASHINO MITAKA CABLE TELEVISION. Focus on content, and leave the charging to us... Yokohama-based commercial online service provider K-NET has launched Copernicus Internet Members Service (IMS), a service that will enable content providers to charge visitors for viewing their Web pages, yet save them the trouble of registering members and issuing IDs and passwords. K-NET will handle the membership registration, payment settlement, and administration work on a subcontracting basis, leaving information providers free to focus entirely on content development. K-NET will charge a setup fee of 200,000 yen ($1,802), a monthly fee of 70,000 yen ($631), plus 23% of the membership fees. The company says it hopes to manage services for 50,000 members and produce revenues of 500 million yen ($4.5 mil) the first year. Now all that remains to be seen is whether people will pay to see Web pages... These guys are going to be busy... Tokyo-based Internet connectivity service provider EASYNET has started a new 24-hour telephone-based service providing support for PC novices attempting to connect to the Internet. Many first-time PC buyers want computers so they can use the Internet, but have trouble handling the somewhat technical setup work. EASYNET currently has a staff of four on two 12-hour shifts and is offering the service at no charge. The company hopes the new service will help broaden its customer base to the growing number of people who have no experience with online services of any kind. MITSUBISHI HEAVY, others to transact orders with ALCOA over Internet Five aircraft body manufacturers, including MITSUBISHI HEAVY INDUSTRIES and KAWASAKI HEAVY INDUSTRIES, will forge an Internet connection with aluminum giant ALCOA of Pennsylvania to create an EDI-based order issuing/reception system. The new online system shouldenable both sides to reduce inventory and cut costs, according to a spokesman. Other participants in the ordering system will include FUJI HEAVY INDUSTRIES, JAPAN AIRCRAFT MFG., and SHIN MEIWA INDUSTRY. Together the five companies order more than 300,000 tons of aluminum from ALCOA each month. NTT moving into online 'zine business NTT has teamed up with three publishers of rental housing infozines to offer rental housing data via the Internet starting July 25. The first edition of the new service will feature approximately 20,000 apartments, rental houses, and public housing units, searchable by price, location, and other keywords.The service will be free through the end of September and offered on a fee-for-service basis thereafter. NTT, which plans to make substantial use of video and audio technologies on the new Web site, sees the project as a way to drive sales of ISDN lines that can better support the heavier bandwidth requirements the service will make, say observers. Survey finds nearly 28% have shopped online Electronic Commerce Network (Japan) found that nearly 28% of respondents to its online survey have shopped on the Internet. The organization, whosemembers include NTT, NTT DATA COMMUNICATIONS, and other companies,is currently carrying out electronic commerce experiments and conductedits third survey between February and May of this year. Nearly three times as many respondents had online shopping experience compared to the previous survey, which was implemented in November of 1995. But skeptical observers cited the group's small sample size (744) and the potentially self-selecting nature of the online polling method. Professional credential or browser war strategy? ASCII SOMETHING GOOD, NTT LEARNING SYSTEMS, NTT, ASCII and MICROSOFT (Japan) announced that on July 20 they will start offering a test that will certify those who pass it as "Internet Professional Advisors" (IPA). The test, to be administered entirely online, will assess both general and technical knowledge of the Internet. The group claims the IPA designation will be useful for companies that want to hire Internet-savvy employees, and say they expect to administer the exam to 100,000 applicants at 14,800 yen (approximately $133) per person the first year. But several key drawbacks suggest that rather than an impartial mechanism for certifying competence in Internet-related matters, the proposed system is more of a clever marketing ploy designed to create a lucrative, low-overhead online sales business while growing share for Microsoft's browser. To start with, the test will be administered entirely online, with no time limits or supervision imposed on testees, and the content revised only once yearly. Even the sponsors admit they have no way of preventing cheating, and must rely on the honor system when awarding the IPA credential. Secondly, it seems that no impartial Internet-related organization willparticipate in the test development or credential awarding process. Imagine the reaction if Time-Life, AT&T, and Microsoft teamed up in the U.S. to dispense "Professional Internet Advisor" (PIA) credentials online at $133 apiece without the supervision or involvement of a respected non-profit organization. Finally, the test is based on Microsoft's Internet Explorer browser, which in the words of key sponsor ASCII is "available free of charge and in widespread use." The sponsors ignored Netscape Navigator's overwhelming popularity in Japan. * * * * An Internet Startup in Japan Last month we had the chance for an e-mail interviewwith Bruce Hahne, former Vice President for Technology at Global OnLine Japan K.K., an Internet connectivity service provider that has proven especially popular with foreign residents of Tokyo. Excerpts follow: What was the toughest part of being a small startup company in Japan? - In general, one of the big problems of being a small and new company in Japan is that nobody wants to deal with you. The leasing companies won't lease to you; you're too risky and you have no credit history. Potential Japanese employees often don't want to work for you; you don't have any prestige and you could go out of business soon. You have no influence with NTT to make them move faster when they tell you that it's going to take four months to get a leased line into your building. Potential business customers want to buy their leased line and LAN dial-up connections from companies with a history. I would suppose that these problems exist with any startup in any country, but I would say that they're more intense in Japan. Where do you see the opportunities for foreign companies in Japan's Internet market today? - This is a tricky question, since you don't suggest how much money is available to throw at an opportunity or the extent to which the foreign company is ready to work in Japanese. I certainly wouldn't recommend that a company with $200,000 attempt to get into the dial-up PPP business, unless it's in an area code in Japan with NO local dial-up provider. There are already at least 300 other companies in Japan providing dial-up PPP (According to Internet Magazine, that number is now at about 450 - Ed.). However, I know that one of the major U.S. providers plans to get into the dial-up market in Japan within perhaps the next six months, and they'll probably be throwing $10 million to $30 million into the project. With that kind of money you can consider doing dial-up. They're still looking for a Japanese partner, though, which makes sense. My suspicion is that there's quite a bit of money to be made in LAN/Internet consulting, for companies which can function in Japanese and which can find the right Japanese partner to help them get introductions. Many businesses have connected to the Internet, but many more have not, and as often as not you may find that they don't even have a LAN in place, much less a WAN connection. It's difficult or impossible to find trained LAN/WAN engineers in Japan, so to the extent that a foreign company can bring in these skills and make them accessible to Japanese companies, there are possibilities. Is there money to be made in Internet software? In some areas, yes,though many of the larger U.S. companies (Netscape, Qualcomm, FTPSoftware, NetManage) have already localized their products and have them available. Anyone with a product that does something new and differentover the Internet might want to consider localizing it and finding a distributor. Internet Phone now has a distributor, for example. Is there money to be made in Internet hardware? Well, the big computercompanies selling WWW servers are already here, Cisco pretty much has the ISP router market locked up, and rack-mount all-in-one modem solutions for ISPs are about to become available from a variety of vendors (Ascend used to be the only option). There are some holes I'd like to see filled, though: more vendors of internal 64Kbps ISDN boards for both Mac and PC, and more vendors of high-speed (192Kbps - T1) terminal adapters, to name two areas. Bruce Hahne served for two years as the Vice President forTechnology at Global OnLine Japan K.K. He can be reached at hahne@acm.org * * * * TKAI's report on the Japanese Internet market, co-authored by Digitized Information, will be available August 1. The Table of Contents can be viewed at: www.tkai.com/services/research/1996.html 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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