Japan-US Business Report Logo

No. 350, November 1998

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American Companies in Japan


Three acquisitions in as many months have made PSINET INC. second only to NIPPON TELEGRAPH AND TELEPHONE CORP. as an Internet service provider to business and commercial users. In its biggest purchase, the Herndon, Virginia company paid an undisclosed amount to buy TOKYO INTERNET CORP. from majority shareholder SECOM CO., LTD. and others. Founded in 1994, Tokyo Internet's network infrastructure directly links 23 of Japan's largest metropolitan areas. The company's revenues jumped 65 percent in the year through March 1998 to $43.8 million, enabling it to break even. Tokyo Internet's nearly 6,000 leased-line, colocate, Web hosting and dial-up subscribers join the 2,000 or so corporate customers PSINet's subsidiary gained through the acquisitions of RIMNET CORP. and TWICS CO., LTD. (see Japan-U.S. Business Report No. 348, September 1998, pp. 20-21). All of them have access to the full range of PSINet services, including Internet faxing and voice, electronic commerce, security services, Web hosting, global roaming and intranet/extranet services. The company's frame relay-based, Internet Protocol- optimized network consists of more than 500 points of presence around the world.

Competitor and neighbor UUNET TECHNOLOGIES, INC., a MCI WORLDCOM, INC. company, also reportedly plans to move beyond providing Internet backbone access to offering Internet services to corporate customers. To do this, it will lease capacity from JAPAN TELECOM CO., LTD. and other Japanese carriers. UUNET operates more than 1,000 PoPs around the world and serves in excess of 70,000 corporate customers.

Hoping to win more customers for its satellite-based corporate Internet services, Bekkoame Spacenet, an affiliate of ISP BEKKOAME INTERNET INC., will replace its NIPPON TELEGRAPH AND TELEPHONE CORP.-supplied terminals with equipment bought from INTELLIGENT DEVICES, INC. The Ijamsville, Maryland company's IP- based, high-speed digital broadcast products are designed to take full advantage of satellite communications to deliver digital data, video and audio to the desktop. Bekkoame Spacenet says that IDI's terminals are 50 percent faster and 30 percent less expensive than what it is using now. They also can be maintained remotely.

COBALT NETWORKS, INC., the developer of space-saving, easy-to-use, low-cost, scalable network solutions for ISPs, has opened a subsidiary in Tokyo to oversee sales and marketing by its five current distributors and other companies it hopes to sign up as well as field service. The Mountain View, California business also announced the upcoming availability of the Cobalt RaQ/J, a localized version of the Cobalt RaQ. This Internet server solution, like the already released Cobalt Cube 2700J microserver (see Japan-U.S. Business Report No. 346, July 1998, p. 13), comes preconfigured with the Apache Web server, Linux operating system and other software at what Cobalt says is a fraction of the cost of traditional Unix and Windows NT systems. It is available through NISSHO ELECTRONICS CORP. as well as ADAMNET CO., LTD., NTT INTERNATIONAL CORP., NIPPON TELEMATIQUE, INC. and PLATHOME CO., LTD.

To jump-start sales of the InterJet all-in-one Internet solution for small businesses, Foster City, California-based WHISTLE COMMUNICATIONS CORP. formed a subsidiary in Tokyo. That organization reportedly is negotiating with three ISPs to distribute InterJet, which integrates internal and external e-mail, Web access and Web publishing for the whole office into a single device. NIPPON TELEGRAPH AND TELEPHONE CORP. and RICOH CO., LTD. already market localized versions of the product (see Japan-U.S. Business Report No. 343, April 1998, p. 24).

Unable to break through the 100,000-subscriber barrier (see Japan-U.S. Business Report No. 345, June 1998, p. 23), WEBTV NETWORKS INC. has come up with a novel way to persuade more people to use their TV sets to access the Internet. Next spring, SEGA ENTERPRISES, LTD. will package a WebTV CD-ROM with its just- released 128-bit Dreamcast home video game machine. The browser software will allow game players who have a WebTV set-top box to compete with opponents over the Internet.

Internet fax market leader FAXSAV INC. has enlisted a NISSHO IWAI CORP. affiliate to market its localized services under a three-year agreement that the Edison, New Jersey company values at $1.5 million. INFOCOM SYSTEMS CO., LTD. will deploy FaxLauncher Pro client software to enable its customers to create and send documents to any fax machine in the world. That is expected to produce 150,000 Internet fax pages a month. InfoCom Systems also plans to offer gateway solutions for fax document distribution using FaxSav's ServerLink application programming interface, which allows third parties to build access to the company's global Internet fax network into their own applications. DDI CORP. also offers FaxSav's Internet fax services (see Japan-U.S. Business Report No. 341, February 1998, p. 24).

The Tokyo subsidiary recently established by PACKETEER, INC. is projecting 1999 revenues of $8.3 million from sales of its PacketShaper line of bandwidth- management products to ISPs and other companies operating wide area networks. The three available PacketShapers are priced from $6,800 up to $27,300 (see Japan- U.S. Business Report No. 339, December 1997, p. 23). KANEMATSU ELECTRONICS LTD. and MACNICA, INC. have joined NISSHO ELECTRONICS CORP. as distributors of the Campbell, California supplier's products.

The decision by direct-to-home television broadcaster DIRECTV JAPAN INC. to expand the number of channels it offers subscribers to more than 150 from 90 (see Japan-U.S. Business Report No. 349, October 1998, p. 28) has led to the award of a contract to longtime partners DIVICOM INC. and VICTOR CO. OF JAPAN, LTD. to supply head-end equipment as well as system design and integration. DTVJ will use the Milpitas, California company's MediaView MV40 encoders to ensure high-quality video at efficient transmission rates. This equipment digitally compresses incoming analog video using a technique known as variable bit rate encoding. The digital signals then are combined and statistically multiplexed through the DiviTrack feature of the compression system and transported over an optical-fiber ATM (asynchronous transfer mode) network to DTVJ's uplink site in Ibaraki prefecture.

Companies interested in deploying secure, manageable virtual private networks over public IP networks have another option in the VPNware package from VPN pioneer VPNET TECHNOLOGIES, INC. The San Jose, California company's family of integrated hardware, software and services, sold through MCM JAPAN LTD., can support as few as 25 remote users or as many as 2,400 at what is said to be the lowest cost in the industry. The VPNware platform delivers standards-based Triple-DES encryption as well as authentication, key management and compression services at wire speed. Pricing in Japan begins at $19,000.

What INTERNATIONAL BUSINESS MACHINES CORP. is calling a branch office in a box, otherwise known as the 2212 Access Utility, had a late November ship date in Japan and elsewhere. Using multiprotocol VPNs, this $12,400 system gives mobile workers access to LANs via remote LANs or connects branch offices to the Internet or to the company backbone.

Through its subsidiary, FORE SYSTEMS, INC. has introduced a pair of so-called intelligent multigigabit routing switches. The ESX-4800 is an eight-slot 10/100/1000 modular chassis with optional integrated ATM OC-12 uplink support for the most demanding enterprise and ISP network environments. It provides up to 48 ports of Gigabit Ethernet, 384 ports of 10/100 Ethernet, 16 load-balanced ATM OC-12 uplinks and 38-million-packets-per-second processing at Layer-2, Layer-3 and Layer-4. The Warrendale, Pennsylvania manufacturer's ESX-2400 is a four-slot 10/100/1000 modular chassis that delivers exactly half the capacity and the density of the ESX- 4800 platform.

The Catalyst 5500 switch family from CISCO SYSTEMS, INC. has a new member. The nine-slot Catalyst 5509 supports up to 384 10/100 ports or 38 Gigabit Ethernet ports on a 50-gigabit-per-second backplane. It can be deployed as a campus backbone switch with a large uplink using Gigabit Ethernet technology or as a wiring closet switch with multiple 10/100 ports. In its marketing campaign, Cisco is touting the fact that the Catalyst 5509 can be combined with a higher-end Catalyst 8500 routing switch to build a very high-end, multigigabit backbone link.

For branch offices and small or midsized businesses looking for a platform that combines dial access and routing in a single device, BAY NETWORKS, INC.'s subsidiary has the Nautica 4000 network access server. It supports both synchronous (integrated digital services network) and asynchronous dial access simultaneously on top of providing dedicated connections to traditional leased line, point-to-point and frame relay services. Configurations of the Nautica 4000 with four basic rate ISDN interfaces and integrated modems start at $7,800.

In an unexplained move, ANCOR COMMUNICATIONS, INC. dumped HUCOM INC. as the exclusive distributor of its GigaWorks Fibre Channel switches, even though that company had won a contract in 1996 for what was billed at the time as the world's largest Fibre Channel network. The Minnetonka, Minnesota manufacturer's new exclusive representative is NETMARKS, INC., a supplier of network integration services that is owned by NEC CORP., NOMURA RESEARCH INSTITUTE, LTD., SUMITOMO ELECTRIC INDUSTRIES, LTD. and SUMITOMO DENSETSU CO., LTD.

MOTOROLA INC.'s local operation has on the market the MD100C+ two-way mobile radio system for commercial customers. The terminal/handset combination implements the NEXNET wide area integrated digital radio communications system promoted by NEXTEL COMMUNICATIONS, INC., which, in turn, is compatible with Motorola's iDEN (integrated digital enhanced network) technology (see Japan-U.S. Business Report No. 343, April 1998, p. 24). Accordingly, the MD100+ can be used for regular phone calls, paging and data communications as well as for two-way radio communications. Moreover, all these functions are accessible with just one hand.

To broaden its market coverage, videophone supplier 8X8, INC. added ACT CO., LTD., an Osaka consultant on store renovations, to sell its ViaTV VC150 desktop videophone. Like the Santa Clara, California company's other products, this model does not require a PC. Instead, it uses standard telephone lines to deliver full-color, telephone-quality video and audio. That technology means that no special wiring is necessary and that a video call costs the same as a regular phone call. The shoebox- size VC150 lists for about $2,400, including a digital video camera, or it can be leased for roughly $24 a month. MITSUI & CO., LTD. distributes 8X8's full line of ViaTV videophones (see Japan-U.S. Business Report No. 346, July 1998, p. 27).

The commercial start of IRIDIUM LLC's global satellite phone and paging system has been pushed back again in Japan, this time to January 1 from November 1 (see Japan-U.S. Business Report No. 343, April 1998, p. 25). Technical factors were given as the reason for the latest delay. However, sources indicated that NIPPON IRIDIUM CORP. had failed to sign up any customers for its services, which use a constellation of 66 low-earth-orbit satellites to provide communications from virtually any point on the globe via handheld Iridium phones.

An exchange rate of ¥121=$1.00 was used in this report.

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