Sales of Packaged Business Software Show Strong Growth
NT packaged software market to reach JPY175 billion in FY98
The japanese market for unix/ NT-based packaged business software has marked a dramatic growth in recent years. The market for Windows NT software, in particular, doubled in fiscal 1995 owing to the favorable sales of such applications as RDBMS (relational database management system) software, e-mail, and groupware, according to MIC Research Institute, a Tokyo-based research company.The overall market for the packaged business software reached nearly JPY94.5 billion in FY1995, up by 67% from the previous fiscal year. The market in FY1996 is expected to reach JPY147.9 billion, a further 57% year-on-year increase.
A market comparison between Unix and Windows NT show that Unix remained dominant, but that is likely to change by FY1998. MIC Research says that sales of NT products for RDBMS, ERP/production control, and e-mail/groupware are showing significant growth. It estimates that the NT market will reach JPY175 billion in FY1998, while the Unix market will have grown to just JPY149 billion.
The most popular product category in FY1995 was middleware (such as RDBMS), which accounted for about 57%, or JPY53.6 billion, of total sales. This was followed by enterprise resource planning (ERP) software at 24%, (JPY22.8 billion) and office automation applications at 19% (JPY18.1 billion).
Within the middleware field, sales of RDBMS software in FY1995 reached JPY36.4 billion, a 47% increase from the previous year. In FY1996, this is expected to grow to JPY54.8 billion, up by 50% year-on-year. Three companies - Oracle Japan, Sybase, and Informix - are dominant in this product market, accounting for a nearly 80% share of sales. Microsoft is in a distant fourth, according to MIC Research.
In the Enterprise Resource Planning field, the entry of SAP Japan in 1993 stimulated the growth of integrated packaged products. The market of such products nearly tripled from JPY3.6 billion in FY1994 to JPY10.3 billion in FY1995, and is expected to grow by 83%, to JPY18.9 billion, in FY1996. According to MIC Research, SAP Japan held an over-70% ERP market share in FY1995, but this is likely to drop in FY1996 as Oracle Japan and other vendors vigorously pursue this product market.
In the office automation (OA) application field, e-mail and groupware sales enjoyed strong growth. In FY1995, the market for these products reached JPY8.2 billion, and it is expected to double in FY1996, to JPY16.2 billion. Lotus enjoyed FY1995's top OA application market share (36%) followed by strong competitors Microsoft, Omron Alphatec, DEC Japan, and NEC.
Tokyo ISPs to Cooperate
The proliferation of internet Service Providers (ISPs) in Japan, and the recent launch of NTT's Open Computer Network, assure higher quality and lower priced service for end users. But it also means intense competition among ISPs for customers, and many are likely to fall by the wayside. The best way to compete, says president Craig Oda of TWICS, Japan's first public-access Internet system, is "to move as fast as lightning and stay ahead of the pack."
According to Oda, "This is only the beginning of a shift in the Internet industry in Japan. Companies in the industry [must] specialize and concentrate on quality" in order to survive and remain profitable. Acting on that dictum, in February TWICS and competitor Cyber Technologies International (CTI) announced a non-exclusive strategic alliance. CTI will concentrate on creating digital media solutions, while TWICS will focus on providing Internet access.
Asked why the company had taken this step, CTI president John Duley responded, "We are growing incredibly fast in content creation and website hosting. Concentrating on those areas as our core business made a great deal of sense. We always knew that the real growth market for us would be in digital media solutions." As part of their agreement, CTI is recommending TWICS to its dial-up Internet customer base.
"When I looked at the quality of work being produced by companies like Cyber Technologies, I knew that we couldn't compete," says Oda. "But TWICS has more experience in TCP/IP networking than any of our competitors [and we] are rapidly leveraging our experience to create new markets."
Computer Viruses Increase 13% in 1996
The information technology Promotion Agency, Japan (IPA), a nonprofit organization affiliated with the Ministry of International Trade and Industry (MITI), has issued its year-end report on the number of computer virus infections reported to it. Virus reports in December 1996 totaled 57 cases, down from 93 reports in November.
The IPA logged a total of 755 virus reports in 1996. While this was a 13% increase over 1995, which had 668 cases, it was far fewer than 1993 (897 cases) and 1994 (1,127 cases). For the year, the number of infections reported in 1996 ranged from a low of 36 in January to the high of 93 in November.
Among date-activated infections, the most cases reported were for the Form virus (which self-activates on the 24th of each month, causing the system's speakers to emit a clicking noise). Form resides on the hard disk and infects the floppy disk boot sector of IBM compatibles. Since the first reports in 1992 (3 cases), Form has spread quickly throughout Japan, accounting for 42 reports in 1993, 97 in 1994, 59 in 1995, and 72 in 1996. Another common date-activated virus was Peter II. This virus normally infects the disk's boot sector and, when the user turns on the computer on February 27, Peter II crashes the hard disk and presents three questions. If the user answers all three correctly, the hard disk is returned to its original state; if the user answers any question incorrectly, however, the computer shuts down with the hard disk still crashed. (Correct answers to Peter II's questions are 4, 2, 2.)
The infection sources most commonly identified were e-mail, floppy disks, and other outside media. There was a significant increase in the number of "macro" viruses infecting document files attached to e-mail. The IPA strongly recommends that all text files received from outside parties be scanned for viruses before they are opened.
To report a computer virus infection, call the IPA at 03-3433-4844.
| Reports of computer system infections in 1996 | |
|---|---|
| IBM compatibles | 595 |
| NEC PC98 series & compatibles | 118 |
| Macintosh | 10 |
| Fujitsu FM series | 2 |
| Note: Some of these "reports" included multiple system infections. | |
SAP Tops in Japan's ERP Business
SAP Japan announced in February that the company achieved twofold growth in calendar year 1996, due in large part to R/3 System purchases by 65 companies in Japan. SAP Japan sales in 1996 reached JPY17.1 billion, more than double its previous year's sales of JPY8.3 billion.The number of Japanese companies that had adopted R/3 systems totaled 165 as of the end of 1996. Sites with R/3 installed reached 245. The R/3 3.1 Japanese version, designed for Internet and intranet use, is to be released in March.
To help grow its business in Japan this year, SAP plans to expand the industry solution businesses it started in 1996 targeting the consumer, mechanical, and aviation industries. The target industry fields for SAP's enterprise resource planning software in 1997 are the oil, chemical, pharmaceutical, electronics, and automobile businesses.
Secure Electronic Service Joint Venture Announced
Bug, the sapporo-based systems house that in 1995 was first in the world to import security software from RSA Data Security, announced in February its plan to establish a joint venture company for electronic authentication service. Joining BUG in the venture as significant equity partners are GTE Secure Business Solutions Inc. (GTE), Nomura Research Institute (NRI), and NTT Mobile Communications Network (NTT DoCoMo). Banks and major credit card companies will be invited to participate as stockholders.The company, tentatively named CyberTrust Japan, is to be established this month [April] to provide digital certificates and certification authority services for secure electronic commerce in Japan. For its operation, the new company is to acquire an exclusive license for the use of GTE's CyberTrust digital certification authority (DCA) system. The company will provide DCA services - including certificate issuance for Secure Electronic Transactions (SET) and private brands, consulting on digital certification, and sales of DCA systems - for use with IC cards and for intranet and Internet usage. CyberTrust Japan also plans to issue various certifications, such as for the use of Web servers.
Sumitomo Credit Service and JCB have announced plans to use digital certificates issued by CyberTrust Japan to allow their customers to make safe credit card transactions over the Internet. Digital certificates are electronic credentials that provide a means of identification, authentication, and data integrity for online transactions.
Information about GTE CyberTrust products and services can be found on the Web at http://www.cybertrust.gte.com.
Cable Telephony Services Planned
Northern telecom has signed a five-year agreement to supply cable telephony systems to Jupiter Telecom. As Japan's first Multiple System Operator (MSO), formed as a joint venture between US-based Tele-Communications International and Sumitomo Corp., Jupiter Telecom plans to launch commercial cable telephony services in Japan this summer.Northern Telecom is to supply its Cornerstone Voice cable telephony system together with a large-scale and small-scale digital switch (which it has already supplied to NTT and other Japanese carriers). Jupiter Telecom has been using these systems to conduct feasibility tests at its Suginami Cable TV (Tokyo) franchise since December 1996.
"We aim at getting the replacement market of NTT's (telephone) service," says Yasushige Nishimura, president of Jupiter Telecom.
Back to the table of contents