Product sales for FY1997 have not matched Justsystem's expectations, and in January the company announced a significant "downward correction" of its revenue forecast for the fiscal year (the period ending March 31, 1998). Justsystem in late January lowered its FY1997 sales forecast by a hefty 34.1%, to \24.01 billion, down from the \36.45 billion prediction made as recently as November. The company now admits that its previous "ordinary profit" forecast of \3.06 billion for FY1997 will likely be a \4.35 billion "ordinary loss."

Justsystem explains this downward correction of sales and revenues as being due to a greater than expected decrease in consumer and corporate spending on computer-related products. This has been caused by the lingering unfavorable business environment in Japan, which in turn was triggered by an increase of the consumption tax from 3% to 5% in April 1997 and the ongoing financial market crises in Asia. Justsystem also suffered from a decreased share of the pre-installed software market (software shipped with new computers) because of "intensified competition from competitors" (i.e., Microsoft).

In an effort to improve its financial situation, Justsystem announced that no bonuses will be paid to its board members for FY1997, and that the company will reduce monthly remuneration for board members until business conditions improve. In addition, Justsystem will undertake a series of cost-reduction measures, including reviewing its product promotion and advertising costs and cutting down on personnel expenses.

For FY1998, Justsystem will aggressively carry out sales and development of its strategic search engine product, ConceptBase Search, and related products. The company will also enhance general product marketing efforts and initiate corporate restructuring to "pursue efficient product development and efficient corporate management with an appropriate number of personnel."

As one of these new efforts, Justsystem and Oracle Corporation Japan announced in January that they have agreed to jointly market Justsystem's new client-side Japanese-language database software, Goro 8 (due to be released on January 30), with Oracle's popular server-side relational database management system, Oracle8. The two companies hope that their joint efforts will give them a better strategic opportunity to compete head-to-head with Microsoft Access.

The joint marketing activities will include the offer of a free Oracle8 connection driver kit and a Personal Oracle8 trial version to corporate users who purchase either Goro 8 or Ichitaro Office 8 Pro, and a free set of Goro 8 and Oracle8 connection driver kit for corporate users who purchase either Oracle7 or Oracle8.

Cisco receives award, announces tie-up

In January, John Chambers, President and Ceo of US based Cisco Systems, was presented an award by Prime Minister Ryutaro Hashimoto for Cisco's "contribution to improvement of the Japanese trade structure and promotion of mutual understanding regarding trade issues between Japan and the US." Cisco's Chambers was the only non-Japanese among the four persons receiving awards from Prime Minister Hashimoto at this time.

According to Nihon Cisco, the company's Japanese subsidiary, the award was given in recognition of Cisco's continuing contribution to the construction of Japan's basic Internet infrastructure. By placing strategic emphasis on the Japanese market, says Nihon Cisco, the company has secured a leading share in the router market as well as in the LAN and WAN (local- and wide-area network) switching system markets. In addition, Cisco has been aggressively promoting Internet-related cooperation between Japan and US through joint technological development with major Japanese electronics manufacturers, NTT, and Keio and Waseda Universities. Cisco has also been active in field trials of technologies and standardization activities in Japan.

"The Japanese Prime Minister mentioned at the award ceremony that Cisco had contributed to the promotion of the Internet in Japan. But it is more appropriate to say that Cisco and our partners in Japan did it," said Chambers at a press conference held in Tokyo following the ceremony.

Nihon Cisco was formed in 1992 as a 100%-owned subsidiary of Cisco Systems. In 1994, however, the subsidiary was transformed into a joint venture with 13 computer-related companies in Japan, including Oki Electric, Toshiba, Hitachi, NEC, Fujitsu FIP, Mitsubishi Electric, NTT Data, and Softbank.

Regarding Cisco's Japanese market strategy for 1998, Chambers stresses the importance of educating Japanese companies about the value of investing in state-of-the-art information and communications equipment. Such investment will not only increase their corporate productivity, he says, but will lead to improvement of the entire Japanese economy.

Cisco Systems in January also signed an agreement with Fujitsu to expand its network product business on a global basis. According to the agreement, Fujitsu will sell Cisco products worldwide, including in Europe, Oceania, and North America as well as in Asia. The two companies will cooperate in securing interoperability between their current and future network management software products.

Fujitsu says that the two companies will also investigate the possibilities for future collaboration, including forming closer links between their products, cooperating in networking and multimedia technology development and marketing, expanding networked computing initiatives, and formulating standards.

GOL buys IAC Internet customer base

Tokyo-based internet service provider (isp) Global OnLine (GOL) officially announced on February 2 that it has purchased the entire dial-up customer base of Internet Access Center (IAC) . The deal is the first acquisition of its kind for GOL, and it effectively marks the end of IAC's dial-up Internet access business.

An estimated 2,500 IAC customers are covered by the acquisition, but they will see little immediate effect. According to GOL's CEO and founder Roger Boisvert, these Internet users will be able to retain their current e-mail addresses and accounts for a minimum of two years, but will also be given new GOL accounts to which they can switch at any time.

IAC holds rights to dozens of Japanese domain names, including the popular "japan.co.jp" (and is reportedly a major reason that JPNIC, which allocates the *.jp domain names, has become so restrictive in its domain name allocation requirements). These domain names, however, apparently are not part of the deal signed with GOL.

IAC plans on staying in the Internet industry, according to its president Brad Bartz, but will hereafter concentrate on value-added e-mail services, website construction and maintenance, and Internet transaction businesses. In a telephone interview with Computing Japan, Bartz said, "We're very excited about this transition for our company and our customers."

GOL's Boisvert tells Computing Japan that this acquisition could be just the first of many. "We'll be looking to work with smaller ISPs who plan on exiting the business, but who care enough to see that their customers are very well taken care of."

GOL was established in June of 1994. With the acquisition of IAC's customer base, GOL now boasts over 14,000 customers, some 500 of whom are large corporate accounts.

IAC was established in 1992 (originally as Information Access Center), and initially was in the business of selling search and retrieval software. After entering the Internet services market, IAC also took over publication of Tokyo Journal in early 1996, but divested itself of that magazine in mid-1997.

Nihon Sun sets up Java support center

Nihon Sun Microsystems, the Japanese subsidiary of Sun Microsystems, has set up the Nihon Sun Java Center (NSJC) to support Java-based computing activities. The NSJC will offer training and authorization of Java experts as well as integration and consulting services for Java computing through a network of Authorized Java Centers (AJCs) to be run by partner companies. According to Nihon Sun, the NSJC will focus on helping developers gain speedy access to the latest information on Java computing.

For Java training, NSJC and the AJCs will offer Java/Internet technological analysis, a Sun Java approval program, Java administrator seminars, and Java training. For Java integration and consulting, authorized Java technology experts will support Java business solution development and research, evaluation, system design, prototyping, installation, and management services for Java computing.

Within the year, Nihon Sun plans to have some 20 AJCs throughout Japan. These will be operated in cooperation with Itochu Techno Science, NTT Data, Oki Electric, Toshiba, Hitachi, IBM Japan, NEC, and other partners. For more information on the NSJC and AJCs, contact the Nihon Sun Microsystems Customer Networking Center at 03-5717-5033.

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