Sanoh System Solutions
- a venture company goes secure
by Noriko Takezaki

Is your network security strong enough? If you want to find out, contact Sanoh Systems. They'll do what you hope will never happen: they'll attack your system, and then let you know where the vulnerabilities are. Perhaps it'll be the best electronic mugging that ever happens to your enterprise. And it's a key service being offered by a hometown venture player -- right here in Tokyo.

Sanoh's network attack service -- which the company prefers to call its network auditing service -- was introduced in Tokyo by the company's founder, Joichi Ito. In his early 30s, Ito is known as one of the more dynamic players on the Japanese Net, and Sanoh System Solutions Inc., located in Shibuya, Tokyo, is his 6th company. The firm was launched as a tie-up between a US network security company -- Security Design International (SDI) -- which Ito found through his worldwide network of contacts, and he is now serving as its chairman.

An inside job

Sanoh System Solutions provides auditing services for client networks. The basic approach is to launch a simulated attack as part of a network penetration test, with attempts being made (with the clients permission, of course) to get access to the client's corporate network from both inside and outside (i.e. from the Internet). By mapping all of the vulnerable network ports, Sanoh System Solutions staff analyze the degree of security present in the customer's network, including intranets and extranets, and in individual host machines on the network. The results, in most cases, are quite a shock to the client, and help serve to justify adequate budgeting for security hardware and software.

The public is wary

But this type of network penetration testing service hasn't done particularly well in the rest of the world, and Sanoh's partner SDI experienced a tough time when it introduced the service in the US last year. Nonetheless, SDI's customer base has been expanding this year, and Ito is confident that the security business here in Japan will experience a boost soon -- especially in view of the growing reports of network attacks that Japanese companies are experiencing. "Clients in the distribution and logistics field are well aware of the potential risks their network's face as they expand their networks, and they have been quite positive about our services," says Ito. "This is because many of them already have problems in managing the growing volume of network users, which includes their own staff, their clients, and their franchisees. The more their networks are used, the greater the risks to their supply chain management processes."

Slow but steady

For Sanoh System Solutions' business, Joichi Ito's approach is "to grow slowly but firmly." He is not planning an IPO soon since many venture companies are doing so now and Ito recognizes that the network security business is a tough one for a venture company to make profits in quickly. "We would rather go slowly for the moment while developing firm human and technical resources for our growth in the network security business," he says. For the moment, Ito thinks that most of the company's profits will be made not directly by the network security service itself, but through other services, including network system construction and integration. Ito will remain as Sanoh's chairman, and several managers as well as the company's working capital come from its sole shareholder, ECD Sanoh -- a subsidiary of an auto parts manufacturer -- who has also been participating in Ito's other Internet-related business, Eccosys, as part of an aggressive plan for business expansion.

Profitability soon

"Our shareholder supports the vision of this company and expects our success in this new field," says Sanoh System Solutions' president, Shigeyuki Negishi. "Even though Japanese companies are not willing to spend much money for network systems because of their concern for the Y2K problem and the weak economy, we feel that people's interest in the network security issue has been increasing. We expect that this company will start making profits within three years."

When asked if he has any tips for the successful operation of venture companies, the entrepreneur stated that one needs "a firm business vision, people to work for it, and money." He also added, "and to understand your company's weak points, and assign the right person to work on them." We think that Ito's company is well on the road to security -- both network and financial.

Noriko Takezaki is senior editor at Computing Japan.

Sanoh System Solutions Inc.
Paid-up Capital: JPY100 million
Shareholders: ECD Sanoh Co. Ltd. (100%)
Number of employees: 15
Address: Hillside Terrace G-301, 18-12, Sarugaku-cho, Shibuya, Tokyo, 50-0033
Tel: +81-3-5459-8242
Fax: +81-3-5459-8296
http://www.3si.co.jp info@sanoh.co.jp

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