Japan-US Business Report LogoJapan-U.S. Business Report

No. 345, June 1998

Issue Index

American Companies in Japan


Another cable television operator has selected COM21, INC.'s ComUNITY Access cable modem system to launch a high-speed data-over-cable service (see Japan-U.S. Business Report No. 344, May 1998, p. 23). NIHON NETWORK SERVICE CO., LTD., which has approximately 130,000 subscribers, is the first company to offer its customers multitiered Internet access. This allows users to match their bandwidth needs to their budget. The tiers of service range from 64 kilobits per second to 1.5 megabits per second. With the ComUNITY Access System, NNS also can provide virtual local area networks to companies and virtual private network services to SOHO (small office/home office) customers. FURUKAWA ELECTRIC CO., LTD., one of the Milpitas, California-based Com21's systems integrators, received the order from NNS.

Wireless Internet and electronic mail services also are coming to Japan. DDI CORP. and NIPPON IDOU TSUSHIN CORP. (known as IDO), which together have 10 million wireless customers, have selected UNWIRED PLANET, INC.'s open software platform to implement Internet and e-mail links on their separate PDC (personal digital communications) and coming cdmaOne cellular phone networks (see Japan-U.S. Business Report No. 339, December 1997, p. 22). The Redwood City, California company's UP.Link Server Suite will support kanji as well as multibyte character sets for European languages. To access the Internet or the corporate intranet, though, DDI and IDO customers must have mobile phones running UP. Browser, a microbrowser that also is compatible with Wireless Application Protocol standards. Unwired Planet recently opened a wholly owned subsidiary in Tokyo (see Japan-U.S. Business Report No. 344, May 1998, p. 22).

The increasingly tough competition in Japan's network equipment market has claimed a high-profile victim, COMPAQ COMPUTER CORP. The top PC maker's subsidiary moved into this business in late 1996, but its sales of the Netelligent line of Ethernet switches and related products totaled less than $7.4 million last year. Compaq's local operation also stopped handling remote access products made by MICROCOM, INC., a company acquired last year, and dissolved the Norwood, Massachusetts firm's subsidiary. Network interface cards are the only communications product that Compaq will continue to sell.

The aggressive marketing push of CISCO SYSTEMS, INC. in Japan certainly did not make life easier for COMPAQ COMPUTER CORP. The world's top supplier of network equipment currently is trying to build sales among small and midsized companies with the help of SOFTBANK CORP., one of its subsidiary's primary distributors. In August, the two will form Softbank Cisco Masters, a secondary reseller network for Cisco products made up of roughly 25 firms that work with Softbank. Through moves like this, Cisco hopes to double sales to small and midsized customers from $25.9 million, which represents about 5 percent of its annual Japan revenues.

EXCEL SWITCHING CORP., a manufacturer and marketer of open, programmable, carrier-class switches, has opened its first overseas subsidiary in Tokyo. The Hyannis, Massachusetts company currently is pushing its ONE Architecture, a strategy that uses its flagship product, the Expandable Switching System, to enable carriers to offer network routing, a variety of enhanced services and media support in a single, integrated, scalable switching platform. The modular design of the ONE Architecture allows it to scale from 100 ports to 30,000 ports. Multiple Excel switches already are installed in Japan.

Network managers that need more bandwidth can do what big interexchange carriers have done: deploy wavelength division multiplexer technology. So says CANOGA PERKINS CORP., which has developed a WDM system specifically for high-speed LAN applications. The Access Model WA-4 is a protocol-independent system that supports data transmissions at speeds from 10 Mbps to 155 Mbps. It lets network managers combine in a cost-effective way ATM (asynchronous transfer mode) (OC-3), FDDI (fiber-distributed data interface), Ethernet/Fast Ethernet and other protocols over the same fiber backbone. The Chatsworth, California company tapped NET ONE SYSTEMS CO., LTD. to distribute the Access Model WA-4, which costs $64,200 and up. Sales are forecast at 100 units.

Rounding out its line of products for creating high-performance intranets, CISCO SYSTEMS, INC. introduced to major world markets the Cisco Catalyst 8500 switch series for the campus backbone. Users can configure these products to act as either an Internet Protocol/IPX switch, a Gigabit Ethernet switch or a native ATM switch. The first member of the series available in Japan is the Catalyst 8510, which supplies a 10- Gbps switching fabric with four available interface slots. Cisco's subsidiary has priced it from $35,600. In September, it will release the other current product in the line, the Catalyst 8540. This switch is based on a fully redundant, 40-Gbps switching fabric with eight available interface slots.

The campus backbone also is the target of the P550 Cajun Switch from LUCENT TECHNOLOGIES INC.'s subsidiary. Developed by PROMINENT CORP., a start-up that Lucent acquired late last year, the compact (10.5 inches high) switch is said to have two to three times the capacity of any other Gigabit-class product as well as an unrivaled total backplane capacity of 45.76 Gbps, with 22.88 Gbps switching throughput capacity. The P550 Cajun Switch supports up to 24 full-duplex Gigabit Ethernet ports, as many as 120 10/100 Fast Ethernet ports or a maximum of 60 fiber- optic Fast Ethernet ports. NET ONE SYSTEMS CO., LTD. is handling sales for Lucent. The P550 Cajun Switch starts at $49,000. The distributor expects to sell 300 systems a year.

The Gigabit Ethernet switch market is becoming crowded, but newcomer HEWLETT- PACKARD CO. believes that the low pricing of its pair of new ProCurve scalable Ethernet switching solutions, combined with their performance and functionality, will make it stand out. The HP ProCurve Switch 8000M, which is designed for backbone networks, provides up to 80 switched 10/100-Mbps and 10 Gigabit network connections for a total of 3.8 Gbps of bandwidth. HEWLETT-PACKARD JAPAN LTD. priced this configuration at $5,100. Its partner is the $4,100 HP ProCurve Switch 1600M, a 16-port, fixed-configuration 10/100 autosensing switch with a slot for optional Gigabit connectivity. It is optimized to act as a server farm integration point, offering 3.5 Gbps of total bandwidth.

CACHEFLOW INC. has named NISSHO ELECTRONICS CORP. to distribute its rack- mounted network caching appliances to Internet service providers and enterprises that need to improve end-user response times and leverage their bandwidth. The key to this capability is the Palo Alto, California firm's CacheOS, an operating system designed specifically for network caching. CacheFlow's flagship product, the CacheFlow 1000, is engineered for high traffic network points. Featuring hot- swappable disk drives and hardware redundancy, it can scale from 4 GB of disk to 25 GB. This system starts at $81,500. Priced around $18,400 is the CacheFlow 100, which is designed for enterprise deployment at moderate traffic points in the network, such as subnets and remote office WAN access points. It contains a 2-GB disk.

Wireless LANs are going to take off in Japan judging by NCR CORP.'s expectation of selling over the next three years 200,000 WaveLAN cards that comply with the recently ratified IEEE 802.11 standard for wireless LANs. While drawing little power, the new WaveLAN/IEEE system can transmit data up to 1,200 feet in an open area like a factory, a warehouse and a store with a throughput of 2 Mbps. A PC Card implements WaveLAN/IEEE for laptop, portable and handheld devices. NCR's subsidiary priced it at $650. A $725 ISA card is available for desktop computers.

About 1,000 companies are expected to sign up this year for two new data communications services offered by AT&T JENS CORP. The NetClient Service, aimed at small and midsized companies, provides a dedicated line operating at either 64 Kbps ($725 a month) or 126 Kbps (roughly $1,200 a month). The Shared Network Server Option, as it name suggests, allows a person or a company to lease capacity on a server. The monthly charge for 5 megabytes is $185, while leasing double that amount costs $355.

In a sign of the times, AT&T JENS CORP. is selling prepaid Internet telephone cards at LAWSON INC.'s nationwide chain of convenience stores. Users can call to 110 foreign locations or to five areas within Japan, including Tokyo, Osaka and Yokohama, from anywhere in the country. The voice-over-IP calls can be placed from home telephones, pay phones, cellular phones or PHS (personal handyphone system) units. AT&T Jens says that its rates undercut the competition's for calls placed through traditional carrier systems. For instance, a three-minute call to the United States is 72 percent less expensive than if it were placed through KOKUSAI DENSHIN DENWA CO., LTD.

ISP STAR-NET CO., LTD. is offering its corporate and dial-up customers facsimile service over the Internet, saving them 30 percent to 50 percent compared with traditional phone lines. Its GRICfax is a product of GRIC COMMUNICATIONS INC. (formerly AimQuest Corp.), a Milpitas, California alliance of nearly 300 ISPs and telephone companies in more than 75 countries. GRICfax does not require the receiving fax machine to have any special software or hardware to get faxes sent over the GRICfax network. The transmission itself is accomplished using fax-over-IP software servers that are at the originating ISP's site and at terminating sites. Star-Net, a SUMITOMO CORP. affiliate, is the first Japanese ISP to offer GRICfax.

Persuading people to use their TV sets to access the Internet apparently is proving to be more difficult than WEBTV NETWORKS INC. anticipated when it launched its local WebTV service in December. Now the Palo Alto, California subsidiary of MICROSOFT CORP. has enlisted FUJITSU, LTD., NIPPON TELEGRAPH AND TELEPHONE CORP. and four other ISPs to market a new, discounted service called Open ISP to their subscribers. People still must buy a WebTV set-top box, but they have a choice of obtaining Internet connections through one of the participating ISPs or from WebTV Networks directly. Through the new tie-up, the company hopes to have 150,000 subscribers by the end of the year. ORACLE CORP. and its NETWORK COMPUTER, INC. affiliate are offering a competing service, NCTV (see Japan-U.S. Business Report No. 343, April 1998, p. 25).

An exchange rate of ¥135=$1.00 was used in this report.

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