GOVERNMENT & INDUSTRY

R&D network upgrade planned
The Agency of Science and Technology, Ministry of International Trade and Industry (MITI), and Ministry of Welfare will jointly launch in FY1998 a project to connect their affiliated research institutions over a 1G-bps network. The network that connects national research institutions currently supports only 45M bps. This will be expanded to 155M bps in early 1998, then to 1G bps on a test-basis within five years. The new network will permit transmission of a large volume of data for such applications as large-scale, supercomputer-based interlab simulations and remote medical diagnosis procedures.

Plug standard sought
The Ministry of Posts and Telecommunications (MPT) and Ministry of Construction will standardize plug sockets so that TVs, PCs, facsimile machines, game machines, and various other broadcast and communications equipment and home electronic appliances will be plug-compatible. The ministries will launch the Multimedia Homelink project, through which they will develop a prototype by FY1999 in cooperation with electronics makers, power companies, carrieres, and others. The selected system will likely be designed to support a nationwide fiber-optic network that is scheduled to be extended to homes across Japan by 2010.

Data communications support
The MPT is supporting international research in the field of data communications by introducing preferential tax measures and instituting a research subsidy system. Private companies and individuals engaging in research projects with overseas universities and public research institutions are eligible for the Tax System for Joint International Experiment Research, which offers a 6% tax exemption on research expenditures. The two-year scheme got underway in September. The subsidy system provides joint international research groups with a subsidy for up to half of their research expenditures.

Tax breaks for homework
The MPT will institute a preferential tax system in FY1998 to encourage private firms to promote work at home. The number of "teleworkers" who work at home was 950,000 in FY1995, according to the Japan Satellite Office Association. The US, in contrast, was reported to have more than 10 million people working at home. Under the system, corporations will be entitled to select between a 7% corporate tax exemption on the purchase and lease of communications equipment necessary for allowing work at home, or a 30% special depreciation expenditure. The MPT plans to set aside \180 million for the new measures in its FY1998 budget.

Computer development launched
MITI will launch application-specific computer development in FY1998. The ministry was to request \1 billion for a new development project, and will invite research proposals from private companies. The application-specific computers will include one dedicated to research for the brain, and one for use in genom analysis. The MITI-affiliated Information-Technology Promotion Agency will be in charge of the development project.

BUSINESS BRIEFS

DEC shifts sales focus
Nihon DEC will shift the focus of its Windows NT server sales to distributors. The company hopes the move will boost sales more efficiently and quickly than relying on direct sales. Plans call for increasing the number of distributors, which numbered 800 in fall 1997, to 1,500 by June 1998, and doubling overall NT server sales. Nihon DEC's target is to expand its domestic share from the current 6% to 10%. The company will simultaneously expand its product lineup by adding high-end models equipped with 64-bit Alpha processors that offer twice the computing power of Intel Pentium chips.

IBM gears up for the millennium
IBM Japan is expanding its office computer Year 2000 solution organization nationwide. The organization will focus primarily on application software for IBM Japan's AS400 series computers. The company plans to set up a total of 40 solution centers throughout Japan by June 1998, including 20 at its authorized dealerships. According to IBM Japan, each center will be capable of handling 60,000 programs per year, meaning the entire organization will have the capacity to rework over four million software applications by the end of the century.

Matsushita targets software quality
Matsushita Electric has established an in-house Software Management Committee dedicated to improving the quality of its software. Approximately 80% of Matsushita products, from PCs to such consumer household goods as rice cookers, contain software of some sort, and the company recognizes that the quality of software has an enormous impact on overall product quality and acceptance. The new committee is composed of headquarters personnel and software managers from other Matsushita group firms.

Good-bye to NetWare
Novell Japan stopped shipping its NetWare network operating system (NOS) at the end of October, and is now working to migrate customers to its new IntranetWare NOS. The company will work to boost sales under a new organization based on three broad product/service sectors: network operating systems, groupware, and network services. In the groupware sector, Novell hopes to quadruple sales of its GroupWise package and win a 10% share of the market over the next year. In the network services area, it will release a number of new products, including virtual private network development tools.

NEC offers SFA solution
NEC has moved into the sales force automation (SFA) business by teaming up with Siebel Systems Japan to offer Siebel Sales Enterprise, a software package from California-based Siebel. NEC intends to market the \500,000 software in conjunction with its StarOffice groupware and Mobile Gear portable information devices. NEC has released its SFA offerings under the Sales Force Empowerment Solution name, and hopes to sell over 1,000 systems in the next three years. The SFA market is expected to expand rapidly with the increasing use of portable information devices.

Compaq embraces NetPC
Compaq Computer Japan will introduce in the first half of 1998 a desktop computer that integrates NetPC administration capability. The company, which has already incorporated proprietary system administration features into its products, will combine these features with the NetPC concept in an attempt to accelerate the replacement of general-purpose computers with desktop computers for business-critical applications, thus differentiating its products from the competition in terms of reduction in TCO (total cost of ownership). The company introduced its first NetPC product in late 1997.

Mitsubishi sets up EC venture
Mitsubishi Electric and Mitsubishi Corp. have jointly established an electronic commerce service company. Capitalized at \30 million, Japan Net initially has a staff of 15 people, including employees of the two parent companies. The joint venture will conduct electronic approval and transaction service experiments until March, and from April will be transformed into a service company that will be invested in by several other firms, including financial institutions.

Backup subsidiaries established
California-based Seagate Software, a unit of Seagate Technology, the world's largest hard disk drive manufacturer, has set up a wholly-owned Tokyo subsidiary. Seagate Software Japan, located in Shinagawa, was capitalized at \10 million and has started operations with a staff of 15. The new company is focusing on system sales of Backup Exec, backup software for Windows NT Server. Sales of backup software are soaring in Japan due to rapid growth of firms using Windows NT. Seagate Software has a 40% share of the world market for Windows NT backup software, second to Computer Associates, which also set up a Japan subsidiary in 1997.

TELECOM TOPICS

Lower international rates on tap
KDD will lower charges for telephone calls from Japan to the US, following its agreement with AT&T to lower international carrier fees for Japan- and US-originated calls by about 70% and 40%, respectively. The move comes on the heels of the US Federal Communications Commission's adoption of an international "benchmark system" for equalizing what it says are unfair burdens on US carriers for handling international telephone traffic.

While KDD has filed suit in US Federal Court protesting the FCC's move, the company hopes to demonstrate its willingness to voluntarily lower rates, say industry watchers. The lower inter-carrier charges will mean an as-yet-undetermined lowering of KDD's current rates.

PHS growth remains slow
PHS (personal handyphone system) service providers signed up just 61,600 new subscribers in August, the fifth consecutive month-to-month decrease in new subscriber numbers. The PHS industry has been suffering from a high cancellation rate, in part due to the initial large number of high school student subscribers. There were 7.2 million PHS subscribers in Japan as of September 1997.

The cellular industry, meanwhile, signed up 797,400 new subscribers, bringing the total cellular subscriber base to over 25 million.

OCN proves popular
NTT says that subscriptions to its OCN (Open Computer Network) Internet connectivity service have grown dramatically faster than originally expected. The company planned to sign up 32,000 dial-up subscribers by April 1998, but now looks on track to have 250,000 subscribers by April. It also expected to win about 4,000 subscribers to its 128K-bps leased line service by the same time, but now believes it will sign up about 12,000 such subscribers. A company spokesman cites rapid growth in Internet usage as the main reason for the high numbers.

MARKET NEWS

PC server shipments up
Demand for PC servers is growing rapidly. Domestic shipments for the April-June 1997 quarter were 70% higher than the same period the previous year, and are likely to approach 200,000 units in FY1997, up 50% year-on-year. NEC, which reported that its PC server shipments between April and June surged 210% year-on-year, says that SOHO (small office/home office) demand is strong. The company, which plans to sell 54,000 PC servers in FY1997, says that 38% of the firms with sales of less than \10 billion now use PC servers, up from 25% from just one year ago.

Toshiba, a late comer in the PC server market, is aiming to triple shipments in FY1997, while Hitachi, which nearly doubled its FY1996 shipments (to 15,000 units), intends to ship 24,000 units in FY1997. Industry pundits predict that the PC server market will continue to grow by at least 50% per year, reaching 300,000 units in FY1998 and exceeding 450,000 units in FY1999.

Get rich quick?
Use of the Internet to conduct exploitative pyramid marketing schemes is growing in Japan, according to the National Police Agency. Chain letter-type solicitations for \2,000 that ask the receiver to pass the same message on to four other people have appeared, promising recipients that they can make small fortunes from minimal investments. There is almost no case law in Japan addressing Internet-based transactions, and the agency expects various pyramid marketing schemes to become as much of a problem on the Internet as pornography and information about illegal substances.

INTERNATIONAL NEWS

Sharp powers up PDA sales
Sharp will release early this year a new version of its Power Zaurus personal digital assistant (PDA) designed specifically for sale in overseas markets. English, German, and Italian models will be marketed simultaneously. Sharp released the Japanese version of Power Zaurus in July 1997, and has been moving with unusual speed to prepare the new overseas models. The company expects overseas PDA markets to grow rapidly, and felt it needed to move immediately to get the jump on competition from models equipped with the Windows CE operating system. Sharp's new overseas models will feature a keyboard rather than the pen input system utilized in Japan, and will offer other functions specific to each market.

Monitors made in Mexico
NEC will manufacture PC monitors in Mexico by setting up a new company, Multivisual NEC de Mexico. The company, to be capitalized at about \40 million, will operate as a wholly-owned subsidiary of Chicago-based NEC Technologies. NEC Home Electronics provide management and technical support for the new venture, which will launch production in February. Plans call for producing 50,000 monitors per month by the end of 1998, and boosting output to 100,000 units per month within 1999. The \2 billion plant will manufacture mainly 19- and 21-inch monitors. NEC will continue to import 15-inch monitors for sale in North America from China. NEC ranked first in North American PC monitor sales in FY1997 with a 40% share.

Jail your junk mail
Omron has released in the US software that automatically detects unsolicited advertisements and other junk e-mail and routes them into a separate mailbox. MailJail, a functional extension of the popular Eudora mail package, makes use of Omron's original "document meaning" processing technology and "flexible intelligence" technology to automatically discern the content of a message and determine whether it is an unsolicited advertisement. The firm plans to release a version for Microsoft's Outlook, and is considering a Japan market release.

IN 50 WORDS OR LESS

NTT Data has bought a 0.3% (\200 million) stake in Marseilles-based Gemplus, the world's largest IC (integrated circuit) card manufacturer.

Tokyo-based cable TV operator Titus Communications has begun experimenting with cable-based Internet connectivity. The six-month experiment will test cable-modem performance and ascertain service marketability in preparation for full-fledged commercial service.

Softbank, VeriSign Japan, and four other firms have established Security Bank, a network security consortium for promoting security products and services marketed by Checkpoint Software Technologies of Israel.

Virtually every computer manufacturer in Japan is now engaged in efforts to reduce "total cost of ownership" (TCO), but Toshiba intends to be the first company to reorganize (by April 1998) its entire computer division operations based on efforts to clarify and reduce TCO.

Women now account for 17% of all Web users in Japan, according to a June Yahoo! Japan questionnaire. In a previous survey by the company, only about 12% of the respondents were women. Housewives accounted for 2.1% of respondents, up from 1.6% in the previous survey.

Babel, a Tokyo-based language school and translation service company, has set up a dedicated Year 2000 Problem consulting/solutions subsidiary. Babel CyberTrans will assist small and midsize companies by using automatic modification software for COBOL developed by Dot Laboratory of Sendai.

Hewlett-Packard Japan will reenter the notebook computer market this spring. The company currently markets only desktop PCs, but will release the A4-size Omnibook, its first notebook PC in two years

Leading software company Justsystem is beefing up its corporate/government sales staff in order to boost sales of Ichitaro Office 8, its new office suite released in September. Although Microsoft enjoys a 70% share of the office suite sector, Justsystem hopes to boost its market share to 50% in FY1998.

Newsbriefs are based on materials
provided to Computing Japan by
Digitized Information.

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