* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br><br>General Edition Sunday, February 20, 2011, Issue No. 602<br>
<br>+++ INDEX<br><br>- What's New -- Saving money moving office and IT<br>- Short Takes -- Black Cherry -- for gout relief<br>- News -- Supreme Court: HK residency is not tax evasion<br>- Candidate Roundup/Vacancies<br>
- Upcoming Events<br>- Corrections/Feedback<br>- News Credits<br><br>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br>
<br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br><a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br>
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<br>Back in Terrie's Take 581 we discussed the fact that office<br>rents in Tokyo are dropping and now is probably the best <br>time to consider a move. In fact we decided to eat some of <br>our own dog food, and in January we moved our office to a <br>
new location in Roppongi. This week's take is a discussion <br>of what happened, and what we learned about massively <br>reducing costs by moving both our office and our IT.<br><br>Back in 2007 a real estate fund bought the Minami-Aoyama <br>
building we had been tenanted in for the previous 10 years.<br>We'd had a great relationship with the previous owners, <br>Odakyu, but obviously they knew nothing about the real <br>estate business and were eventually forced to sell off all <br>
their real estate assets to the REIT. The new owners wasted<br>no time in jacking up the rent substantially. It wasn't a <br>pleasant experience, and it started with a very <br>heavy-looking fellow coming over and telling us flat out <br>
that he was going to double our rent, or else. <br><br>Keeping in mind that this was 2007, we eventually agreed to<br>a gradual increase leading to a 50% rent rise over three <br>years. Of course the events of 2008 meant that we got stuck<br>
in a "meat grinder" with the rent increasing each year, <br>even as our business suffered falls in revenue and <br>profits. Hoping that the long relationship meant something,<br>we went back to the landlord in March of last year, and asked <br>
them to finally reduce the rent, especially given the fact <br>that other locations in the area were going for 30% less <br>and were in newer buildings. The response we got was that <br>it wouldn't be possible, and that as a fund it would be <br>
preferable to have an empty building rather than suffer <br>reduced income on the P&L. This may seem counterintuitive,<br>but appears typical of how REITs think.<br><br>[Continued below...]<br><br>-------- Bilingual Social Media Software Solutions --------<br>
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larger off-shored projects.<br><br>For inquiries, contact: <a href="mailto:sales@metroworks.jp">sales@metroworks.jp</a><br>------------------------------------------------------------<br><br>[...Article continues]<br><br>
So, we started looking for other buildings. What we learned<br>is that there are PLENTY of them available at competitive <br>prices. Whereas we were paying JPY19,000/tsubo (3.3 sq m.) <br>per month for a 30-year old building in a good address but <br>
15 minutes walk from Omote Sando station in Tokyo, we <br>quickly found 10-year old and newer buildings just 5-8 <br>minutes from the station could be had for <br>JPY13,000-JPY14,000/tsubo. Not only that but most landlords<br>
are also willing to give at least 6 months free rent. Now <br>this doesn't mean completely free, because the monthly <br>payments for a leased space also include a management fee <br>of 20%-30%, called "kanri-hi". However, with some judicious<br>
negotiation, even the kanri-hi can be dispensed with, <br>although typically at the expense of an increased rental <br>deposit.<br><br>So on a 2-year lease with 25% of the period rent-free, our <br>effective rent dropped to about half of what we were <br>
paying in the old building. That's a good start. But there<br>is more.<br><br>In moving, there are three major costs to consider before <br>looking at the cost savings at the other end:<br>1. Refurbishment of the building<br>
2. Fit-out of the new premises and the actual move<br>3. IT costs<br><br>On the refurbishment side of things, we decided to <br>challenge the old landlord's practice of having the premises <br>refurbished by its own in-house construction company, and <br>
we got outside quotes. Yes, the contract with the landlord <br>did indeed say that we would let them refurbish, but it <br>didn't say that we had to accept their pricing. Thus, armed<br>with two alternative quotes, the company had no option but <br>
to drop their price.<br><br>On the fit-out of the new building, we were lucky enough to<br>find a company that not only does fit-outs but also <br>premises search. They were very proactive and found us the <br>office we wound up taking, even though we saw dozens from <br>
other real estate agents. Because that company has both <br>business units involved, they were able to bring their <br>prices down substantially. If any readers are interested in<br>having the contact details for this company, please feel <br>
free to contact us at <a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>. Anyway, we<br>got two floors (130 tsubo) fitted with low-cost walls, <br>doors, and waiting areas for the equivalent of 3 months rent. <br>
It's a good feeling to be in a nice clean space again and be <br>saving money, and it's great for staff morale.<br><br>On the IT costs side of things, the two big ticket items in<br>most office moves are the server room and maintaining <br>
the servers. As many readers will surely know, servers are <br>not only very noisy, they also need to be kept cool, and <br>the best solution is to keep them in a sealed, air <br>conditioned room. This ties up real estate and necessitates<br>
the use of an expensive add-on air conditioning system that<br>requires "special" ducts and cabling -- giving your <br>landlord's construction company an excuse to extract <br>another JPY3MM-JPY5MM out of you. Of course, this all has <br>
to be removed at the end of the tenancy, which is another <br>million yen or so. <br><br>We decided to dispose almost all our servers, keeping just two<br>units out of a dozen or so, and put everything else "up in <br>
the cloud". A local Tokyo data center, Advantage24 got our<br>front-end applications and development servers. However, for<br>the back office, the biggest concern was email, and in <br>choosing a cloud provider of email -- we needed a service that<br>
is reliable, fast, compatible, and of course cheap. <br><br>Originally, we were going to choose Google's Gmail service, <br>which several related companies are using without hassle. <br>However, we discovered that Microsoft has a service called <br>
Exchange Online and decided that with the investment already <br>made in training and data, that we should stick with Exchange<br>and Outlook. We then migrated about 80 email accounts and <br>all our data to the servers in Redmond 3 weeks before our <br>
move, and upon moving to the new office, email was available<br>complete with all data and settings just a few minutes after <br>the Internet was connected to the premises. BTW, we used<br>KVH's well-priced service to connect us to our fixed-line<br>
telecommunications -- much cheaper than NTT.<br><br>Our subsequent experience with Exchange Online is that since<br>the front end software resides on the PC, even though web <br>connections maybe a little congested/slow at certain times <br>
of the day, you don't really notice it. This is the one big <br>difference from Gmail. Google really needs a widely <br>supported offline-capable front-end to Gmail. <br><br>The outstanding thing with the Exchange Online service is <br>
the pricing. You can get full email, 25GB of storage per <br>user, automatic backups, and spam filtering for just JPY522<br>per person per month. With prices like this, it's really <br>compelling for almost any small to medium-sized company, <br>
even if you're not moving. <br><br>For our case, a cost comparison for the move implications <br>on IT and Exchange Online looks like this:<br><br>CONVENTIONAL:<br>* Server room fit-out, including air conditioner -- JPY4MM <br>
=> JPY1.3MM/year (3 years amortization)<br>* Server upgrades, firewall, and software every 3 years -- <br>JPY1.5MM => JPY500K/year<br>* 2 tsubo of rented space -- JPY360K/year<br>* Server administration, backups, repair work, etc. -- <br>
JPY3.6MM/year (about 50% of the engineer's time)<br><br>Total => JPY5.76MM per year approx.<br><br>ACTUAL:<br>Microsoft solution for 80 people, with 3 days/month <br>engineer remote support => JPY1.4MM/year, which is a 75%<br>
cost reduction as well as requiring no upfront investment <br>and little or no high-skilled people to support the <br>system.<br><br>Our conclusion is that deflation is not just happening in <br>the rental market. With the changes in cloud computing and <br>
thanks to Google's challenging Microsoft in the <br>price/performance category and now Microsoft's very viable <br>response, the winners are small companies like our's who <br>can get high-quality solutions at greatly reduced prices.<br>
<br>...The information janitors/<br><br>***------------------------****-------------------------***<br><br>+++ SHORT TAKES<br><br>Some readers have asked why we are running these health <br>products messages. Just more ads? Well, no. Actually, we use<br>
these products ourselves, to stay competitive working and <br>playing in Tokyo and know them to be effective. It's our <br>way of sharing insider tips with our readers. Of course if<br>you quote our reference number at iHerb.com, then we'd be<br>
happy about that as well...<br><br>=> 1. Black Cherry -- for gout relief<br><br>Gout is an extremely painful inflammation of the bone <br>joints, particularly in the big toes, hands, wrists, and <br>other similar areas. It is caused by high levels of uric <br>
acid in the blood which have crystallized and found their <br>way into the joints. Also known in days gone by as the <br>"rich man's" disease, it appears to be aggravated by diet, <br>as well as through genetic predisposition. Once you have <br>
gout, it's hard to get rid of, and options to treat it are <br>not so great, led by NSAIDS and steroids. One natural <br>remedy that offers many sufferers relief is Black <br>Cherry Fruit concentrate, which acts as an anti<br>
inflammatory. Good stuff if you suffer from gout.<br><br><a href="http://bit.ly/gC3Ut7">http://bit.ly/gC3Ut7</a><br><br>=> 2. Romantic dinner for two at 148 Hiroo<br><br>This week's MMC prize is a romantic dinner for two at the<br>
wonderful Asian-Australian Fusion restaurant 148 Hiroo, <br>courtesy of 148 Hiroo. <br><br>Our congratulations to Francesco Libassi for winning a one <br>night stay for two, including breakfast, at the Mercure <br>Hotel Ginza Tokyo, courtesy of the Mercure Hotel Ginza <br>
Tokyo. <br><br>Becoming a Metropolis Member is as simple as going to the <br>website and signing up for the weekly newsletter. No other <br>obligations. <br><a href="http://blogs.metropolis.co.jp/club/">http://blogs.metropolis.co.jp/club/</a><br>
<br>* Many more prizes scheduled in coming weeks. <br>* No charge to enter.<br>* Simply receive the MMC newsletter to stay in the draw.<br><br>***------------------------****-------------------------***<br><br>--------- BIOS - Bilingual IT Systems and Support ---------<br>
<br>BiOS full-service IT solutions has a new service.<br><br>Working with our fully licenced temporary dispatch group,<br>we are now able to provide Japan in-country workers<br>for companies not yet registered in Japan.<br>
<br>This innovative service is available for companies needing<br>to hire staff for Japanese customers, but who are unable<br>to commit to the expense and infrastructure of maintaining<br>an office in Japan. We take care of all aspects of the<br>
employment, contracting, and dispatch -- including <br>management of the employee.<br><br>Also, if you're thinking of Cloud office solutions, take a <br>look at Microsoft's new Business Productivity Online <br>Standard Suite. Terrie mentions Exchange Online in this <br>
week's article, well we can do the implementations for <br>you.<br><br>For more information on this and other SI and IT services,<br>in English or Japanese:<br><br>Phone: (03) 4588-2220, Email: <a href="mailto:solutions@biosjp.com">solutions@biosjp.com</a><br>
Web: <a href="http://www.biosjp.com">www.biosjp.com</a><br>-----------------------------------------------------------<br><br>+++ NEWS<br><br>- Cold weather causes electricity output spike<br>- EV trucks a fresh ministry project<br>
- Whaling hunt cut short, activists win?<br>- Surprising tax ruling by Supreme Court<br>- India-Japan trade deal big for generic drugs<br><br><br><br>-> Cold weather causes electricity output spike<br><br>Just how cold was in it January? Well frigid enough that <br>
power usage for households was up 3% for the year, to <br>83.84bn kw/hrs. Just in case you were wondering, data from <br>the nation's 10 power utilities also shows a recovery in <br>industrial power usage -- a good indicator of how factories<br>
are doing. Apparently the top 7 industries increased power <br>consumption by 5.7% over last year, to 22.81bn kw/hrs. <br>(Source: TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Feb 18, 2011)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20110218D18SS087.htm">http://e.nikkei.com/e/ac/tnks/Nni20110218D18SS087.htm</a><br>
<br>-> EV trucks a fresh ministry project<br><br>The Transport Ministry is financing to the tune of JPY1bn a<br>project to develop commercially viable small and mid-sized <br>electric trucks. The project is said to include Mitsubishi <br>
Fuso, Isuzu, Hino and UD Trucks (formerly Nissan Diesel). <br>The Nikkei says that trucks and buses account for 7% of <br>Japan's CO2 emissions and is one reason for the project, <br>however, the more likely reason is that Japan wants to make<br>
sure it stays ahead of the game as short-haul trucking <br>firms start to realize that mass produced EVs are much more<br>economical to run. (Source: TT commentary from <br><a href="http://e.nikkei.com">e.nikkei.com</a>, Feb 18, 2011)<br>
<br><a href="http://e.nikkei.com/e/ac/tnks/Nni20110217D17JFA09.htm">http://e.nikkei.com/e/ac/tnks/Nni20110217D17JFA09.htm</a><br><br>-> Whaling hunt cut short, activists win?<br><br>After Fisheries Minister announced that Japan was cutting <br>
short the season's whaling hunt because of harassment by <br>the Sea Shepherd organization, officials were careful to <br>announce the following day that they would continue the <br>hunt again next year. To reinforce that line, the Foreign <br>
Ministry called in Australia's Ambassador to make its <br>displeasure of the fact that Sea Shepherd is still allowed <br>to use Australian ports, known. ***Ed: While the bluster <br>may save some face, it appears that the government has <br>
decided that the ill-will and cost of the whale hunt is no <br>longer worth it. Greenpeace Japan (not to be confused with <br>Sea Shepherd) speculated that the whaling program may be <br>ended, as possibly indicated by government changes of <br>
personnel in various related governing bodies. That would <br>be good.** (Source: TT commentary from <br><a href="http://theaustralian.com.au">theaustralian.com.au</a>, Feb 18, 2011)<br><br><a href="http://bit.ly/h2w66H">http://bit.ly/h2w66H</a><br>
<br>-> Surprising tax ruling by Supreme Court<br><br>Although one may imagine that the Tax Office never loses a <br>case, the Supreme Court has just handed down a very <br>surprising ruling that will have big implications in <br>
international tax collection by Japan. The court said that <br>the son of money lender Takefuji, Toshiki Takei, was <br>wrongly billed JPY133bn for gift and penalty taxes on a <br>JPY160bn gift of shares made by his parents while he was <br>
living in Hong Kong and was resident there. The Japanese <br>Tax Office says that he lived in Hong Kong purely to evade <br>tax, but the Supreme Court said that nonetheless since the <br>shares were in an off-shore company and he did live most of<br>
the time in Hong Kong, it was illegal to levy Japanese <br>taxes on Takei. ***Ed: Interestingly, after being hit by <br>the Supreme Court in the opposite direction several years <br>ago for refunds on exorbitant interest rates, which caused <br>
Takefuji to seek bankruptcy protection, the company is now <br>claiming refunds on taxes paid on the amounts that are <br>having to be refunded.** (Source: TT commentary from <br><a href="http://ft.com">ft.com</a>, Feb 19, 2011)<br>
<br><a href="http://bit.ly/i6wgxq">http://bit.ly/i6wgxq</a><br><br>-> India-Japan trade deal big for generic drugs<br><br>The Comprehensive Economic Partnership Agreement (CEPA) <br>signed between Japan and India this last week looks like it<br>
could open the spigot for low-cost Indian generic drugs to <br>flood the Japanese pharmaceuticals market. The current <br>4%-10% duty will drop to zero, and import and standards <br>compliance procedures will be significantly eased as well. <br>
Japan's generics market is said to be worth around JPY600bn<br>and is rising. ***Ed: Of course this could only happen <br>after Daiichi Sankyo, Japan's third largest drug company, <br>had fully digested Ranbaxy, India's largest pharma firm and<br>
a leading producer of generics. Tough for the little guys, <br>though.** (Source: TT commentary from <a href="http://thehindu.com">thehindu.com</a>, Feb 16,<br>2011)<br><br><a href="http://www.thehindu.com/business/Industry/article1462359.ece">http://www.thehindu.com/business/Industry/article1462359.ece</a><br>
<br><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>few days of posting them, thus breaking our links -- we<br>apologize for the inconvenience.<br><br>***------------------------****-------------------------***<br>
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<br>+++ CANDIDATE ROUND UP/VACANCIES<br><br>=> BiOS, a Division of the LINC Media group, is actively <br>marketing the following positions for customers setting up <br>or expanding in Japan, as well as other employers of <br>
bilinguals.<br><br>** HIGHLIGHTED POSITION<br><br>We are currently looking for a senior infrastructure <br>engineer to work on-site at our busy international client <br>in Daimon, Tokyo area. This is a great opportunity for <br>
those who have more than 5 years of overall IT <br>infrastructure support (desktop support, server/network <br>management). The candidate will take a lead in various <br>support plans and projects, therefore, high motivation, <br>
complete tasks on time and take a leadership role required.<br>Business level Japanese and English is required.<br><br>Remuneration is JPY6m – JPY7.5m depending on your <br>experience and skill level.<br><br>** POSITIONS VACANT<br>
<br>- Network Architect, Market Data, JPY10m – JPY18m<br>- Helpdesk Engineer, Medical, JPY3.5m - JPY4.8m<br>- Datacenter Engineer, ibank, JPY3.5m – JPY4.5m<br>- User Support Engineer, Global IT, JPY3.5m – JPY4.5m<br>- Sales Staff, Embedded Antenna co, JPY7m – JPY9m<br>
<br>Interested individuals may e-mail resumes to:<br><a href="mailto:kenji.sakota@biosjp.com">kenji.sakota@biosjp.com</a><br><br>** BiOS Job Mail<br><br>Every 2 weeks BiOS sends out a regular communication to its<br>job seeking candidates, called BiOS Job Mail. Every edition<br>
carries a list of BiOS's current and most up-to-date<br>vacancies, with each entry featuring a short job<br>description and a direct link to the main entry on the BiOS<br>home page. Regardless of whether you are unemployed and<br>
searching, thinking about a career change, or just curious<br>to know if there is something out there that might suit you<br>better, the BiOS Job Mail newsletter is an easy and<br>convenient way for you to stay informed. If you would like<br>
to register for the BiOS Job Mail, or to find out more,<br>please email <a href="mailto:kenji.sakota@biosjp.com">kenji.sakota@biosjp.com</a>.<br><br>Interested individuals may e-mail resumes to:<br><a href="mailto:kenji.sakota@biosjp.com">kenji.sakota@biosjp.com</a>.<br>
<br>-----------------------------------------------------------<br><br>***------------------------****-------------------------***<br><br>+++ UPCOMING EVENTS/ANNOUNCEMENTS<br><br>No announcements this week. This weekend's<br>
Entrepreneur Seminar was very well attended,<br>though. Over 23 people looking to start or <br>grow their companies came to the session. The<br>next seminar will be scheduled some time in <br>April.<br><br>***------------------------****-------------------------***<br>
<br>+++ CORRECTIONS/FEEDBACK<br><br>In this section we run comments and corrections submitted<br>by readers. We encourage you to spot our mistakes and<br>amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br>
<br>*** No corrections/comments this week<br><br>***********************************************************<br>END<br><br>SUBSCRIBERS: 8,751 members as of February 20, 2010<br>(We purge our list regularly.)<br><br>+++ ABOUT US<br>
<br>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br><br>HELP: E-mail <a href="mailto:Terrie-request@mailman.japaninc.com">Terrie-request@mailman.japaninc.com</a><br>
with the word 'help' in the subject or body (don't include<br>the quotes), and you will get back a message with<br>instructions.<br><br>FEEDBACK<br>Send letters (Feedback, Inquiries & Information) to the<br>
editor to <a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>.<br><br>ADVERTISING INFORMATION<br>For more information on advertising in this newsletter,<br>Contact <a href="mailto:ads@japaninc.com">ads@japaninc.com</a>.<br>
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or, <a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br><br>Copyright 2011 Japan Inc. Communications Inc.<br><br>----------------- Japan Inc opens up Japan ----------------<br>
<br>J@pan Inc is Japan's only independently published English-<br>language business website. Authoritatively chronicling <br>online the business trends in Japan, each posting brings <br>you in-depth analysis of business, people and technology in<br>
the world's second largest economy. <br><br>Visit <a href="http://www.japaninc.com">www.japaninc.com</a> for the best business insight on<br>Japan available.<br>-----------------------------------------------------------<br>
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