In our most recent PC Network Study, we contacted over 20,000 department heads and MIS managers in corporations throughout Japan to ask about their current PC/network systems, and their plans and satisfaction levels. The final report is not yet available, but early returns reveal some obvious - yet startling - figures detailing how rapidly the Japanese corporate computer market is maturing.

The pace of computerization in corporate Japan has heightened dramatically in the past year. The clearest evidence can be seen in the persons per computer (PPC) ratio: 4.5 to 1 in this year's survey, compared with 6.5 to 1 only a year earlier. Corporations with a 1-to-1 PPC ratio, meanwhile, increased from 2.1% to 5.7% (and reached 9.6% among firms with over 1,000 employees). Some 31% of all corporations (and 48% of large corporations) indicated that they plan to raise their PPC ratio to 1 to 1. We predict that the average PPC ratio will reach 2 to 1 within five years, which will escalate the demand for computers, networks, and software for corporate use.

In the corporate software battle, Microsoft is burying the competition. The ratio of companies using Windows NT as their primary network operating system (NOS) increased from 16% in 1996 to over 43% in 1997, while NetWare usage dropped from 47% to about 29%, and Unix usage from 14% to 8%. The primary reasons offered for selecting a corporate NOS were "global standard" (37%) and "ease of setting up networks" (34%). These reasons do not adequately explain the dramatic shift in Japan's NOS market, however. The far-reaching changes in the corporate software arena were driven by Microsoft's classic strategy of linking its operating systems with its applications. Corporations concerned about compatibility tend to choose the safe, conservative option.

On top of its NOS strategy, Microsoft iced the cake in the corporate software market with 63% of corporations using MS-Word, 81% using Excel, and 59% using Access. Microsoft's applications are often chosen by default: either the company has used them before, or they are purchased as an office suite package. New developments in network computing and Java-based applications could shift the trend from Windows-dependent programs, however.

Hardware changes in the corporate world were equally remarkable. The share of laptops within corporations grew significantly - probably due in part to a concern over desk space. Anyone who has seen the layout of a typical Japanese office will understand why the stress on low profile notebooks is so important. The implications are significant for laptop manufacturers: they will need to differentiate notebook strategies targeting personal and corporate users. The personal laptop user requires a small, lightweight portable that can run on batteries for mobile computing, while the corporate laptop user requires the performance and ease-of-use of a desktop without its massive footprint and clutter.

We can derive the following conclusions:

• Large corporations are choosing laptops for their small footprint, despite the higher cost.
• Laptop manufacturers targeting corporate users need to focus on performance rather than mobility.
• With the growth of networking, corporate notebooks need to have networking capabilities pre-installed.
• Large corporations should be the key targets for network computer sales.

While Japanese corporations have made significant strides in computerization and networking, the current PPC ratio suggests that more computers, networks, and software will be necessary to achieve the installation targets indicated by Japanese corporations in the 1997 survey. This trend will open a floodgate of opportunities for computer and software manufacturers, dealers, systems vendors, and communications service providers. Understanding the current and future structure of the PC network market will be the key to finding these opportunities.

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