TT-605 -- A Long Walk Home on Friday, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, March 13, 2011, Issue No. 605

+++ INDEX

- What's New -- The Long Walk Home on Friday
- News -- Power cuts for Tokyo on Monday March 14th?
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback
- News Credits

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+++ WHAT'S NEW

We were on a train at Takadanobaba on the JR Yamanote
loop line when the Sendai earthquake struck on Friday. At
first we thought the shaking was turbulence from a passing
train, but when it kept growing in intensity it became
obvious that it was an earthquake. We quickly got off the
train and standing on the platform watched a surreal scene
start to unfold in the main street leading to the station.
Buildings swayed, some remarkably so, windows flexed in and
out making you wonder why they didn't burst, and office
workers were pouring out of their buildings to the street,
confused and concerned.

Luckily Tokyo was largely spared quake damage, and despite
the heavy motion, we didn't see any buildings break.
Further east in Chiba and south in Yokohama, there were
isolated instances of falling masonry, collapsing walls,
and an exploded LNG fuel depot.

The quake went on for several minutes, a rolling and
shaking motion that made you think that some poor bas***ds
somewhere else must be getting it much worse. Here in Tokyo
we all think the next big one is going to come from
Shizuoka, roaring north up Tokyo Bay and into the
metropolis. But as we found out later, the epicenter was in
Sendai, 350km to the north. What a difference a mere 350km
makes... and thank god for that.

After the quake, the station master announced that the JR
lines were stopped indefinitely, along with all Tokyo's
subway lines. Takadanobaba is some distance from Roppongi
where the office is, and we started wondering how we would
get back. Down in front of the station, people were
standing around, many not allowed into their buildings
until the aftershocks moderated, and others like us
haphazardly stuck somewhere in transit.

This traffic chaos is the real challenge of living in a big
city like Tokyo. We, like 12m or so others, depend on the
trains to get us efficiently from one place to the other.
When things run smoothly commuting can be wonderful -- with
journeys across town guaranteed to take no more than 20-45
minutes, and fares costing just JPY120-JPY350. 102 subway
and overground train lines crisscross Tokyo and make for the
world's most efficient people-moving system.

[Continued below...]

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[...Article continues]

But when the system is shut down for hours as it was with
this earthquake, the convenience we take for granted is
transformed into the hard reality of how to get back to the
office or get home. Such was the case on Friday afternoon
and evening, when many city workers had to make the
decision of whether to queue for 3-4 hours for one of the
few packed buses, stay at the office or in a warm train
station entrance (it was 2-3 degrees on Friday evening) for
the night, or walk home. Anyone within a 10-15 kilometer
radius of downtown chose to walk. Some took cars (sharing
rides or renting a car) but soon regretted it as roads
across town were gridlocked for hours.

Actually we covered this exact traffic scenario in the Japan
Inc. magazine back in 2008. See here for details:

http://www.japaninc.com/node/3096

What a remarkable scene Friday night was. Heading out to
the suburbs at ten pm, we saw crowds of people on the
sidewalks, as if they were out for some Sunday shopping.
Office colleagues chatting as the strode; people crowded
around designated smoking spaces and taking a nicotine
charge; young women waiting up in street cafes that were
open late; crowds lining up at convenience stores getting
food and drink for the 3-4 hour power walk ahead. The
atmosphere on the streets was congenial and relaxed. It was
Friday night, after all, and everyone was in it together.

On the way back, an old man called out, "Hey, which way to
Shinjuku?" On the train system you don't need to know which
direction is North, and he was trying to orientate himself
in the darkness and tall buildings. We walked with him a
ways, chatting about how terrible it was in Sendai and did
he have any family up there. We got the impression that it
was the first time he'd been thrown in to chat with
foreigners. We bid him goodbye and hoped he'd get to
Ikebukuro, his final destination and surely another 2-3
hours walk.

Further along the road, an old couple passed with Dad
pedaling and the wife perched on the back carrier, just
like a couple of school kids. They were chatting animatedly
and obviously she'd ridden from their distant home to pick
up Dad who was stranded in Shibuya and take him home.
Elsewhere, we saw salarymen on rickety old fashioned
bicycles that had obviously been borrowed from the company
and which are usually used to take mail down to the post
office by the juniors. Elsewhere, newspapers reported this
morning that hundreds simply bought a bike at the local
Don Quijote or supermarket and rode it home.

Passing a train station, there was not a single train in
sight and the platforms were eerily deserted. It looked for
all intents and purposes like a film set. But then we hurried
along as the surrounding buildings suddenly started
swaying again, from one of the hundreds of aftershocks that
we are experiencing, even now on Sunday, two days later.

We decided to visit the local supermarket to get some
veges because it is likely that food will be in short
supply over the next few days due to transport congestion
and the need to send supplies further north. Fresh bread
was completely sold out, as were milk, eggs, and other
essentials. A friend of ours over in Chiba, which was
harder hit, told us that yesterday Ito Yokado was sold out
of all fresh food and basics. Then this morning we went to
another local supermarket and all fresh meat, fish, bread,
tofu, and other consumables are sold out, with more
deliveries unlikely before tomorrow or Tuesday. I seems
that people maybe fearing another quake might hit closer to
Tokyo.

Actually, speaking of Chiba, although the quake itself
wasn't so bad, those people living on reclaimed land out
there, such as Disneyland and surrounding areas, are still
without water 48 hours after the quake. This is because
while the buildings themselves are well made and
foundations extend deep into the earth, the basic
infrastructure of gas and water is just a bunch of pipes
stuck into the ground. They had some severe liquifaction in
the area on Friday and we saw a photo of a manhole pipe
that was squeezed 2 meters up out of the ground just as if
someone had squished the seeds out of a lemon.

Here in the west side of Tokyo all services are working,
but we're being told of upcoming water and power cuts as
the authorities struggle to rebalance the utilities
infrastructure to cover the loss of 7 nuclear power
stations from Fukushima northwards. We imagine that we may
have to deal with many such inconveniences over the coming
days as our contribution to the recovery from what has been
Japan's worst earthquake since records started.

Life goes on, and the earthquake is having all kinds of
side effects you would never think about. However, mostly
we are all just thankful that Tokyo was spared, and we
watch the TV reports with great sorrow at the devastation
experienced in Sendai. Speculation is that the death toll
may rise as high as 10,000 people.

For those of you wanting to donate or make contact with
loved ones here in Japan, this link gives some services
that may be of assistance:

http://metropolis.co.jp/

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+++ NEWS

- Power cuts possible from Monday March 14th
- Keidanren urges quick increase in consumption tax
- More Chinese condo buyers
- Tomy to buy RC2 of USA
- Bain to buy out Skylark

-> Power cuts possible from Monday March 14th

After Friday's devastating earthquake and now with two and
possibly three reactors in serious trouble and risk of
meltdown, the Tokyo Electric Power Company (TEPCO) has
warned that it may have to institute power cuts from
tomorrow (Monday, March 14th). Apparently the nation has
lost about 5%-6% of its overall power generation capacity,
around 20% of the nuclear power capacity. In all, ten
reactors have been taken off the grid, 7 by TEPCO and 3 by
other operators. ***Ed: How good is your power back up
system for your servers? This is another good reason to put
your applications up in the cloud.** (Source: TT commentary
from nikkei.com, Mar 12, 2011)

http://e.nikkei.com/e/ac/tnks/Nni20110312D12JF553.htm

-> Keidanren urges quick increase in consumption tax

Just before the earthquake hit, the nation's leading
business group, the Japan Business Federation, otherwise
known as Keidanren, called for an urgent increase of the
consumption tax from 5% to 10%. Their reasoning was quite
simply to cover pensions and other social spending.
HOWEVER, it is our guess that the government may seize the
earthquake as an opportunity to boost the consumption tax
earlier, so as to help the Sendai recovery effort. ***Ed:
In addition, we'd say that Kan is doing a reasonable job
of leadership in this crisis. His prospects of staying in
power are looking a bit better than they did a week ago.**
(Source: TT from nikkei.com, Mar 12, 2011)

http://e.nikkei.com/e/ac/tnks/Nni20110311D11JFN06.htm

-> More Chinese condo buyers

The Japan Times reports that more wealthy Chinese people
are buying condos in Japan, particularly in Tokyo and other
major cities at which their kids may be attending school.
The report says that Daikyo has sold about 50 Lion's
Mansion apartments to Chinese and Taiwanese buyers since
July 2010. The company reckons it will hit 300 contracts
annually within the next couple of years. Especially
popular are condos in Bunkyo-ku, close to Tokyo University.
***Ed: Not just Daikyo. We were over seeing a client in the
Sumitomo Fudosan Mita Building, where Sumitomo has a
high-end realty operation, and we came across a Chinese
tour group of 15 or so people there specifically to look at
condo's. We expect a lot more of this type of activity, given
that the Chinese don't actually get to own their own land in
China, it belongs to the government. Here, they can buy
and hold on to it for generations if they want.** (Source: TT
commentary from japantimes.co.jp, Mar 12, 2011)

http://search.japantimes.co.jp/cgi-bin/nn20110312f1.html

-> Tomy to buy RC2 of USA

M&A by cash flush Japanese companies continues apace, with
toymaker Tomy saying that it will buy out rival RC2
Corporation of the USA for US$640m. Apparently Tomy is
paying a premium of 27% on RC2's most recent stock price.
The transaction is expected to take place in the next
quarter. **Ed: Less kids being born in Japan, this deal
certainly makes a lot of sense.** (Source: TT commentary
from businessweek.com, Mar 10, 2011)

http://www.businessweek.com/ap/financialnews/D9LSOLB80.htm

-> Bain to buy out Skylark

Another notable buyout is that of the Skylark restaurant
chain by Bain Capital from Nomura Holdings. Bain will
reportedly pay around JPY300bn in cash and debt to buy the
business. Skylark is a major chain in Japan, with 3,700
outlets around the country. It had sales of JPY242bn last
year and net profits of JPY7.9bn. (Source: TT commentary
from bloomberg.com, Mar 11, 2011)

http://bloom.bg/e4c4Dq

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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+++ UPCOMING EVENTS/ANNOUNCEMENTS

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***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** In TT602, we said that we had moved office and one
thing that made the move much easier was the fact that we
have put many of our software applications up in the cloud
and virtualized the servers they run on. This has both
reduced costs tremendously, and in the event of the recent
earthquake, makes us able to support our business even if
the office is shut down, so long as employees can work from
their homes.

=> Our reader comments:

- Hosted Exchange is a great solution, but did you consider
IMAP for enabling Gmail offline? Google has offered IMAP
since pretty much day one meaning you can get Gmail offline
in Outlook, in most other email software, and on
smartphones. For reference I used to used a hosted Exchange
solution for my private email around 5 years ago before
switching to GMail. I now use GMail completely in the cloud
and couldn't be happier.

- If you are ever considering a hardware upgrade I'd be
interested to have you throw Apple hardware into the
comparison. I think there are still reasons why companies
would not or should not want to make such a switch, but
it's still interesting to see the comparisons by companies
as experienced as LINC Media. One of the key factors in Mac
OS favor is that it offers Microsoft Exchange support out
of the box.

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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