Visions of Japan's Internet Development
A Report on the Hyper Network '95, Beppu Bay Conference
by Craig Oda
The hyper network conference, held each year in the town of Beppu, in Kyushu, is almost unknown internationally, yet it is one of the most important Internet-related conferences in Japan. This annual conference is usually sparsely attended -- which may give an edge to those who do attend, since in the dynamic Japanese internetworking market, it is the visionaries who will reap the rewards. The relatively unknown Hyper Network Conference is a crystal ball of Internet development in Japan.
In autumn 1993, when TWICS was the only public-access Internet service provider (ISP) in Japan, [TWICS came online in October 1993. For an account of the Internet's somewhat rocky start in Japan, see "Building On-Ramps to the Information Superhighway" in the June 1994 premiere issue of Computing Japan.--Ed.], the Hyper Network Conference '93 was churning with information about plans for Internet access in Japan. Even at that early stage, the vision of a future with widespread public Internet access in Japan was clearly expressed.
In 1994, it was issues of content on the Internet that topped the agenda at the Beppu Bay conference, and Tokyo-based companies such as CTI, IAC, and Eccosys were soon making healthy profits in the area of content creation. Joichi Ito, president of Eccosys [interviewed in our November '95 issue] and well-known techno-visionary, predicts that these profits will continue, and even grow, as "new technologies, such as Java and VRML develop that require programming skills beyond the capabilities of simple HTML page makers."
At the most recent conference in November 1995, the visions of earlier years were hectic realities, and new visions were being spoken with greater clarity. From one ISP in 1993, the Internet market in Japan had grown to support over 100 providers by the end of 1995. As International University GLOCOM researcher Adam Peake puts it, "The access market in Japan is now horribly competitive. In October alone, I heard that 18 new providers were formed. We're having a terrible time just trying to keep up with who is doing what."
Maturing markets,
increasing competition
While both the access and content markets will continue to expand and develop,
not everyone who enters the game can expect to make a profit. Small companies
already in the market, and big companies with extensive resources, enjoy
a big advantage over today's start-ups. As competition increases, and market
prices drop, there is little profit to be made in selling individual public
access accounts. Access providers are moving from generating perhaps ¥5,000
per month revenue from an individual to ¥50,000 or even ¥500,000
per month for LAN interconnects and leased lines. And on the content side,
providers that started off making simple HTML Web pages are getting into
the more lucrative (and complex) areas of Java programming and database
search engine development. The Internet is now firmly in Japan's media spotlight, with hopeful entrepreneurs following the leaders into the access and content markets. Some dream of retiring to Hawaii in five years -- but risk ending up bankrupt instead of wealthy if they don't adequately study, and anticipate, future market trends. The Japanese Internet market is so dynamic that what many hopefuls consider "revolutionary" is in fact an old market niche that previous visionaries have already been into and bailed out of.
The Hong Kong Supernet is an example of the "move in, move on" trend, and the type of success that most of today's entrepreneurs can only dream of. The company was started on the kitchen table of Bob Coggeshall in 1993; by early 1995, it had gained an amazing 80% market share of Hong Kong's rapidly expanding Internet market. Although the Hong Kong Internet market seems destined for even greater growth, visionary Coggeshall, perhaps with a sense of prescience, decided to sell controlling interest in Hong Kong Supernet to Pindar Wong for a hefty profit. Wong, too, held the company for less than a year before he began selling it off at a profit. The lesson here may well be, "get in, mine the gold, then move on to stake a new claim."
The coming community
According to the visionaries at the '95 Beppu Bay conference, 1996 will be "the year of the Netizen." This year will, they say, see an increased emphasis on, and growing business opportunities in, building communities on the Internet.Howard Rheingold, author of Virtual Communities, predicts that, "when this media blitz is over, people will start to get tired of using things like Netscape to read Web pages online everyday. I mean, all these things about reading glossy magazines online -- people are going to realize they can just buy a paper magazine and take it to a coffee shop to read.... Once the initial rush to get on the Internet is over, people will start to look for a community to get guidance from."
Dr. David Farber, of Pennsylvania University, foresees an impending shakeout in the Internet access business. "Companies that grew fast but failed to develop real services, other than these Internet pipes, are skating on very thin ice." Asked whether community-building is a viable, potentially profitable service, Farber agrees that, "the development of online communities is definitely a value-added service."
Most previous efforts to develop an online community have started with the metaphor of a physical community, such as a town or an island, and extended that to the network. One excellent example of this is the Coara community in Oita, Kyushu (http://www.coara.or.jp). Michael Hauben, author of Netizens, though, feels that a larger global community is about to develop, one for whom the small town metaphors may be inadequate. A virtual community can, and should, have residents from anywhere in the world, he observes. While this has always been possible with vehicles such as USENET news groups, today's new software and marketing strategies make it much easier for "non-techies" to enter into virtual communities.
Online Web conferences
as the future
Some feel that the biggest barrier hampering the average person's entrance
into a net community has been the text-based nature of most online conferences.
The new user is forced to navigate through a strange set of eye-glazing,
non-intuitive commands -- commands that often differ radically from one
system to the next. The new graphical conferencing systems that are being
developed, though, will enable people to easily enter into the community
through Web browsers such as Netscape or Mosaic. Motet, for example, is an innovative and polished Web-based conferencing system. Motet was repeatedly displayed at Hyper Network Conference '95, and both Rheingold and Peake say that Motet is the best they have seen so far in terms of interface design and speed. [TWICS is currently running a beta test version of Motet. Craig discusses the background and development of this innovative program with its author in "More on Motet" .--Ed.]
The wireless Net
Community building is important for Internet users and established providers, but it probably is not a prime business opportunity for the average entrepreneur. Those eager to get into the Internet market of the future today, though, might do well to consider the impact that the spread of wireless communications will have on Japan's Internet.Farber, for one, feels that, "Wireless looks potentially like the best path to take. The Internet can support many types of media." And Jun Murai of Keio University, acknowledged by many as the father of the Japanese Internet, suggests that three technologies will have a significant impact on the future of the Internet in Japan: 24K-bps DoCoMo, 32K-bps local PHS plus ISDN, and 30M-bps and up satellite links.
Opportunities for business in the Internet market, as well as on the Internet, are all around, but competition is intense. Entrepreneurs and start-ups in Japan who look only at the established and growing markets of access and content as their main focus may well find themselves on a dead-end street. It is those who anticipate and invest in emerging trends, such as community building and wireless communications, that will find business success in Japan's fast-changing Internet market.
Additional sources of information
Hyper Network '95
Beppu Bay Conference
http://www.coara.or.jp/BBC/BBC.html
Craig Oda, Internet visionary/evangelist, is president of TWICS, Japan's first public-access Internet service. He also serves as volunteer webmaster for the Tokyo Linux User's Group (TLUG) Web site and listmaster for the TLUG mailing list. Craig can be reached at craig@twics.com.
More on Motet
Motet is a graphical-based conferencing system designed by developer Bryan Higgins. Higgins, based in San Francisco, has been in computing since 1972 and self-employed since 1982. He was co-author of the best-selling OCR (optical character recognition) program OmniPage. Computing Japan talked with Mr. Higgins via the Internet to learn more about Motet.interviewed by Craig Oda
Bryan, most previous BBS and conferencing systems have been text-based while systems such as USENET and its successor Pico Span (used on the WELL) can now be accessed with Netscape in addition to text. Your system however, can be accessed only with a graphical browser such as Netscape. What was your impetus for creating a conferencing system with a Web interface?
Higgins: I had been toying with writing a conferencing system for some time. When the Web came along, it seemed like a great opportunity to take advantage of a platform-independent GUI [graphical user interface] that had wide distribution -- one that I didn't have to write myself.
A friend of mine, John Coate, who used to work at the WELL, was heading up a new online service called Gate, operated jointly by the San Francisco Examiner and Chronical, and he wanted to have a conferencing system to go along with the online newspapers. John showed me his ideas and specs for a conferencing system, which pretty much agreed with what I wanted to do, so he agreed to be my first customer and beta site. That was in early 1995.
Was creating Motet a one-man operation?
Higgins: Leha Blaney, my partner, helped with designing some of the functionality early on and, when the backend was complete, was responsible for designing the page layout, graphics, and help system.
What made you decide not to add a text interface to your conferencing system?
Higgins: It was mainly a matter of not having the time to do something that I think will soon be the way of the past. Well-designed graphical interfaces are so powerful -- both because they are easy for novices to learn and use, and because they are more versatile for experienced users -- that the pressure to go with them for this kind of application was overwhelming. And the Web removes the burden of setting up UNIX accounts and home directories, while the http scheme allows the server machine to handle more users simultaneously. Plus, everyone is going to want to be on the Web anyway.
I sympathize with existing dial-up text users. We would support them if we could, but I think development energies are better spent looking forward.
How long have you been involved with online communities?
Higgins: I joined the WELL in 1990, got hooked right away, and have been heavily involved there as a user and consultant since that time.
At the Hyper Network Conference in Beppu Bay, Japan, community building was the hot topic. Your Motet conferencing system was demonstrated at the conference several times. In your opinion, can the development of online communities be a commercially viable service?
Higgins: I think it certainly can. The graphical interfaces are going to bring a whole new wave of customers who were unable or unwilling to take the time to learn a complicated set of commands under the old schemes. They never caught on to how valuable and fun conferencing is. I think having the Web be two-way instead of one-way will spark a lot of new enthusiasm for the Web.
In Japan, there is a lot of hype over Hot Java and VRML. Do you see conferencing systems incorporating these advanced technologies in the near future?
Higgins: I'm hoping that Java and VRML will be useful in getting around some of the limitations of HTML that Motet currently has to operate under. This will mainly be in making the user interface more powerful and easier to use. I think the nitty-gritty computing that implements conferencing will still take place on the server.
I'd also like to somehow see new technologies restore a sense of "who's online with me right now." Not for chat rooms, which I don't like very much, but more for the one-on-one brief exchange of hellos that can really enhance the conferencing experience.
What's in the future for Motet and online conferencing?
Higgins: We're hoping to integrate Motet more intimately with other Web content, not just leaving it be a stand-alone conferencing environment. For example, newspapers and other online media will be able to tie topics or conferences directly to an article or column so that the user can discuss the content with the author and other readers with the click of a button. This is actually possible now, but we want to make it more seamless and elegant.
In other words, I think we'll see the things people are discussing bought closer to the environment they're discussing them in.
