* * * * * * * * * 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, November 27, 2011, Issue No. 640<br>
<br>+++ INDEX<br><br>- What's New -- Groundshifts in Systems Integration Sector<br>- News -- Possible first in Japan-US custody dispute<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>
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e-mail us at <a href="mailto:info@pbxl.jp">info@pbxl.jp</a> or call us at 03-4550-2557<br><br>------------ PBXL is BUSINESS COMMUNICATIONS --------------<br><br>+++ WHAT'S NEW<br><br>Japan has long been a market where clients have demanded <br>
that software companies customize their products to do <br>exactly what they want, or they won't buy them. Coming out <br>of the mainframe era, Fujitsu, IBM, SAP, and Oracle <br>facilitated this trend by offering reduced hardware costs <br>
and refocusing clients' budgets on the software, and all <br>was good. But the sticker shock for software created <br>significant resistance lower down the food chain, and as a <br>result most of the customized solutions stayed at the top <br>
tier exporting companies. There are a few thousand of these<br>types of companies in Japan and as their needs have become <br>saturated, the ability to sell more software has severely <br>tailed off. <br><br>The response by the traditional Systems Integrators <br>
(SI'ers) has been two-fold, firstly they have tried to go <br>down market, offering mildly lower cost solutions with <br>less functionality and customization. This has been <br>met with a big yawn and most second-tier companies <br>
have simply put their IT development plans on hold. <br>Secondly, SI firms have slashed internal costs by <br>either off-shoring their workforces, or simply by paying <br>less to their developers. We think this is why today <br>
you can get a software developer in Japan for not<br>much more than a similar person in Bangalore -- maybe just <br>a 30% price difference, but without the language problems.<br>Unfortunately, cutting salaries also has the effect of driving <br>
quality and innovation out of the sector.<br><br>[Continued below...]<br><br>-- NAGAMINE & MISHIMA - Securing Your Success in Japan ---<br><br>Starting a new company in Japan? Looking to streamline <br>your current operations?<br>
<br>The team of bilingual experts at Nagamine & Mishima is able<br>to provide high quality accounting, payroll and tax <br>services that both exceed expectations and fit your budget.<br>Our services help customers improve their operations and <br>
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at 03-3581-1975 or by email at <a href="mailto:info@nagamine-mishima.com">info@nagamine-mishima.com</a>.<br><br>---------- YOUR BOTTOM LINE IS OUR TOP PRIORITY------------<br><br>[...Article continues]<br><br>Against the long-term saturation trend, you also have two <br>
pivotal events that have hastened the pace of change in the<br>Japanese software market. The first, which has affected the<br>rest of the world as well, has been the Lehman Shock. Banks<br>and manufacturers are the traditional havens for SAP/Oracle<br>
type solutions and these sectors are under huge pressure to<br>reduce IT costs. Mostly they have gone abroad, for Japan <br>this has typically meant relocating back office operations <br>in Dalian, China or software in Bangalore, India. Either <br>
way, it has meant less work for Systems Integration (SI) <br>companies back home. <br><br>Going abroad has been difficult for most SI firms, with <br>companies like Hitachi putting hundreds of engineers into <br>places like India but so far with not much to show for <br>
their efforts. However, some, such as Fujitsu and more <br>recently NTT Data and NTT Communications have met with <br>greater success. It's been amazing to watch both NTT <br>subsidiaries expand globally through strategic <br>
acquisitions. They have learned from the Verio debacle to <br>go after hard core foreign SI companies, and to leave the <br>fashionable targets alone. We would consider NTT <br>Communications' acquisition of South Africa-based Dimension<br>
Data as a "hard core" purchase.<br><br>Likewise, NTT Data's late 2010 purchase of US-based Keane <br>Systems was gutsy and far-sighted. Keane was a full 1/3 of <br>the size of NTT Data and had/has a global reach in systems <br>
development and integration. Then in March of this year, <br>NTT Data also bought US-based but India-leveraged <br>Intelligroup, a consulting and services business. Now, <br>suddenly, with these and several other acquisitions, NTT <br>
Data has gone from being a nobody to becoming the 9th <br>largest software company globally, with revenues of over <br>US$11bn. <br><br>The other pivotal event has been the earthquake. <br><br>What the earthquake has done is to make companies aware of <br>
two things: one, the importance of redundancy, be it for <br>data storage or business continuity. And two, the fact that<br>the domestic economy is not just in a temporary funk but <br>instead is terminally shrinking. Why it has taken an <br>
earthquake to make illuminate corporate minds is hard to <br>say, but clearly there has been a psychological wake-up <br>call that is now gaining momentum, with most Japanese SI <br>firms looking at going abroad in some shape or form.<br>
<br>Continuity and international business rendered in the form<br>of IT services, are not price-compatible with the big domestic <br>software customizations and locally-hosted server farms of <br>the past. Instead, they are best addressed by centralized <br>
best-of-breed cloud services, especially when you throw in <br>mobile devices, web commerce, and other major shifts in <br>consumer and corporate buying patterns. Thus it is that <br>there appears to be a recent (last 6 months) resurgence in <br>
interest in Japan of foreign cloud applications companies, <br>and in data centers. Whether the software is customizable <br>or not is becoming a secondary issue compared to price and <br>safety.<br><br>Our sister company, Japan Inc. Holdings <br>
(<a href="http://www.japandoor.com">www.japandoor.com</a>), which represents the State of Ohio and<br>which is involved in market entry and backoffice support <br>for start-ups, is seeing a strong increase in inquiries <br>
from firms all over the world. We can't say which companies<br>JIH is speaking to, but none of them would surprise you. <br>They are leaders in games, data delivery, classic consumer <br>portals, cell phone applications, social media data <br>
synthesis, medical information, online security, <br>cloud-based classic B2B applications, online learning, and <br>others. Perhaps what is surprising is that most of them, <br>even before getting to Japan, already have Japanese <br>
clients and are coming over because they are being asked <br>to. Uniformly these foreign cloud companies offer low-cost <br>subscription-based services, which their clients are <br>learning to love. If you're a 1,000-person company, <br>
you can't compare JPY3,000 per user per month with <br>the previous option of JPY100m plus annual <br>maintenance charges of 20%, plus servers, plus <br>wages.<br><br>This sudden change in the SI landscape is leaving those <br>
firms who are overly domestic looking very flat-footed, and<br>they are suffering as a result. Just last month (October), <br>IDC Japan lowered its 2011 growth forecast for the SI <br>market for the second time this year, saying that it would <br>
contract even more than the 2.1% to JPY4.8trn that it was <br>forecasting. This number is actually the third straight <br>year of IT spending contraction, down about 7%, or <br>JPY390bn, from 2008. An example of flat-footedness can be <br>
seen in NEC, which announced on Friday that it was raising <br>JPY89bn of syndicated loans from same-keiritsu bank <br>Sumitomo-Mitsui. They mumbled something in the press about <br>trying to move their debt to long-term loans, but the <br>
reality is that they are losing lots of money and are in <br>trouble.<br><br>What do these massive changes in the SI landscape mean for <br>the rest of us?<br><br>Firstly, we are seeing a turning point in how the Japanese <br>
view and buy software. Non-customizable but templated cloud<br>solutions are going to see extraordinary growth over the <br>next 5 years. Japan has wonderful infrastructure and mobile<br>devices are now sufficiently intelligent that desktop PCs <br>
as we know them will disappear. So this is a prime market <br>for cloud-based firms. Secondly, the clock is ticking for <br>Japan's approximately 30,000 domestic SI firms, most of <br>whom are not geared up to go international. They know that <br>
they are at a disadvantage, and as a result they are <br>interested in tying up with foreign cloud software <br>companies looking for a partner here in Japan. We think <br>there will be a boom in foreign firms returning to Japan in<br>
2012, and that this will have beneficial trickle-down <br>effects in those sectors that support such companies -- <br>recruiting, data centers, and real estate being just a few <br>that come to mind.<br><br>*****************<br>
<br>Lastly, our final Entrepreneur Business Handbook seminar <br>for 2011 is on this coming Saturday. We still have a couple<br>of seats available for last-minute sign-ups. More details <br>in the Events section below.<br>
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-----------------------------------------------------------<br><br><br>+++ NEWS<br><br>- Possible first in Japan-US custody dispute<br>- "Not quite Matsuzaka beef" served to Chinese tourists<br>- TSE lags in bourse speed game<br>
- Most single eligible men have no girlfriend<br>- Corporate governance laws to change<br><br><br>-> Possible first in Japan-US custody dispute<br><br>Although it took a absent-minded trip to Hawaii and a <br>subsequent arrest and US court hearing to make it happen, <br>
it appears that the first ever successful <br>court-mandated repatriation of a mixed-nationality child <br>from Japan to the USA will take place soon. A Kobe-based <br>43-year old Japanese women, who abducted her 6-year old <br>
daughter back to Japan after the US-based husband won <br>custody of the girl, has apparently agreed to allow the <br>child to return to her father in return for her (the woman)<br>being allowed to retain US residency rights. ***Ed: A taste of<br>
things to come? Well, it's not really a test of the <br>Japanese court system, but rather the desires of a quirky <br>mom determining this case, so we're not viewing this as a <br>changing of old attitudes. Currently Japan is still a major<br>
haven for child abduction by Japanese spouses in an <br>unwanted international marriage.** (Source: TT commentary <br>from <a href="http://mainichi.jp">mainichi.jp</a>, Nov 22, 2011)<br><br><a href="http://mdn.mainichi.jp/mdnnews/news/20111122p2g00m0dm113000c.html">http://mdn.mainichi.jp/mdnnews/news/20111122p2g00m0dm113000c.html</a><br>
<br>-> "Not quite Matsuzaka beef" served to Chinese tourists<br><br>The quote from a restaurant owner caught serving <br>mislabeled beef to Chinese tourists tells it all. He <br>apparently said, "It was almost comparable to that of <br>
Matsusaka beef, so I thought it would be all right." What <br>he doesn't share is that he also charged the full wagyu <br>price for the inferior product, ripping off 20-30 Chinese <br>tourists a month for 4-5 years. ***Ed: This is the kind of <br>
behavior that will taint Japan's image quicker than <br>anything. This guy needs to have the book thrown at him.** <br>(Source: TT commentary from <a href="http://japantimes.co.jp">japantimes.co.jp</a>, Nov 27, 2011)<br>
<br><a href="http://www.japantimes.co.jp/text/nn20111127a7.html">http://www.japantimes.co.jp/text/nn20111127a7.html</a><br><br>-> TSE lags in bourse speed game<br><br>Interesting article in the Nikkei earlier this week about <br>
the comparative speeds of trade execution of the Tokyo <br>Stock Exchange, Osaka Stock Exchange, and exchanges abroad <br>such as the LSE, NYSE, and NASDAQ. According to the <br>article, the TSE's 18-month old Arrowhead system is already<br>
out of date, rendering trades in about 2ms. While this is <br>certainly much quicker than the OSE's doddering 100ms, it's<br>still 15 TIMES slower than the London Stock Exchange, which<br>can execute trades in just 125uS. Why is speed important? <br>
To be able to handle program trading by large funds and to <br>keep investors focused on Japanese stocks versus moving <br>somewhere else. ***Ed: Interesting that the article doesn't<br>address at all the issue of the trader-side systems, which <br>
also have to be blazing fast to take advantage of the <br>exchange speeds. Right here in Tokyo we have one of the <br>world's leading players in trading systems, in the form of <br>Fusion Systems' Raptor product. There will be an interview <br>
with one of the Raptor principals in December's ACCJ <br>Journal.** (Source: TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Nov <br>26, 2011)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20111126D25HH180.htm">http://e.nikkei.com/e/ac/tnks/Nni20111126D25HH180.htm</a><br>
<br>-> Most single eligible men have no girlfriend<br><br>This news item is already all over the web, but we couldn't<br>pass it up... According to a think tank related to the <br>Health Ministry, 61.4% of eligible men aged 18-34 have no <br>
girlfriend, while for single women 49.5% have no boyfriend.<br>The numbers come from a once-in-5-years poll done in June <br>2010. Apparently the number of non-dating single men rose <br>9.2% over the previous 2005 survey. ***Ed: OK, why are all <br>
these guys single and not interested in dating? Shy? Poor? <br>Ugly? Apparently it's because they're busy with work or <br>study, or are simply really picky. Sounds lame to us. We <br>wonder why they don't do a study on married people who have<br>
a girlfriend or boyfriend? Maybe that's where all the <br>single girls and guys are hanging out? Clearly they're not <br>going to report that they are doing so...** (Source: TT <br>commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Nov 26, 3011)<br>
<br><a href="http://e.nikkei.com/e/ac/tnks/Nni20111126D2511A22.htm">http://e.nikkei.com/e/ac/tnks/Nni20111126D2511A22.htm</a><br><br>-> Corporate governance laws to change<br><br>In the wake of the Olympus affair, an advisory panel at the<br>
Ministry of Justice is working on a draft to change the <br>corporations law, including changes to corporate <br>governance. The draft, which has been underway for over 12 <br>months and which will be ready for submission to the Diet <br>
next month, apparently recommends that all listed firms have<br>non-executive external directors. ***Ed: This won't achieve<br>much. As anyone who has been running a company here already<br>knows. Currently there is a requirement for all companies <br>
to have a "statutory auditor" which is someone who fills <br>the same type of role that an external director would in a <br>larger firm. However, given that this person can be your <br>wife or best friend, and simply rubber stamps the tax <br>
filings, it's a meaningless effort. This of course is the <br>point that Woodford kept making about Olympus. Everyone, <br>including the external directors, were in Kikukawa's <br>pocket.** (Source: TT commentary from <a href="http://reuters.com">reuters.com</a>, Nov 26, <br>
2011)<br><br><a href="http://reut.rs/uRqGxP">http://reut.rs/uRqGxP</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><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>BiOS is urgently looking for a Bilingual Desktop Engineer <br>with experience acting as a single point of contact for <br>
incidents and inquires regarding infrastructure and <br>applications support. Location is at our client’s office <br>in the Shinagawa-ku area. The candidate will be responsible<br>for end user support, service desk management, project <br>
management, and for managing both infrastructure and <br>applications issues -- following ITIL principles. The<br>candidate will also be responsible for data Center <br>operation support, including backup monitoring as well as <br>
a daily system check. Finally, you will also be responsible<br>for conducting end user training on office IT products and <br>systems.<br><br>Due to the technical nature and demanding work environment,<br>this position is suitable for someone with solid experience<br>
as a desktop or user support person, or equivalent <br>position, for at least 3 years. In addition, since this <br>role requires supporting end users in both English and <br>Japanese, business-level English and native-level Japanese <br>
will be required.<br><br>Remuneration is JPY5m – JPY8m, depending on your experience<br>and skill level.<br><br>** POSITIONS VACANT<br><br>- Sales Executive (Data Center), JPY4M – JPY6M<br>- Helpdesk Support Engr, Japanese telco, JPY3.5M – JPY4.5M<br>
- Senior Support Engineer, BiOS, JPY4.5M – JPY5.5M<br>- Desktop Support Engineer, global law firm, JPY4M – JPY5M<br>- Cabling Engineer, global bank, JPY 3.5M – JPY4M<br><br>Interested individuals may e-mail resumes to:<br>
<a href="mailto:tomohiro.kimura@biosjp.com">tomohiro.kimura@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:tomohiro.kimura@biosjp.com">tomohiro.kimura@biosjp.com</a><br>
<br>-----------------------------------------------------------<br><br>--------- BIOS - Bilingual IT Systems and Support ---------<br><br>BiOS full-service IT solutions has a new service.<br><br>Now the largest independently owned bilingual IT support<br>
company in Tokyo, BiOS offers some of the most competitive<br>services available to multinationals whether large or<br>small.<br><br>Data Center staff and managed services, Help Desk, desktop,<br>and network support. Server virtualization, cloud computing<br>
hosting and solutions, general software development. <br><br>For more information on these 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>***------------------------****-------------------------***<br><br>+++ UPCOMING EVENTS/ANNOUNCEMENTS<br>
<br>---------------- Start a Company in Japan -----------------<br><br>Entrepreneur's Handbook Seminar 3rd of December, 2011<br><br>If you have been considering setting up your own company,<br>find out what it takes to make it successful. Terrie Lloyd,<br>
founder of over 17 start-up companies in Japan, will be <br>giving an English-language seminar and Q and A on starting <br>up a company in Japan.<br><br>This is an ideal opportunity to find out what is involved,<br>and to ask specific questions that are not normally <br>
answered in business books. All materials are in English <br>and are Japan-focused.<br><br>For more details:<br><a href="http://www.japaninc.com/entrepreneur_handbook_seminar">http://www.japaninc.com/entrepreneur_handbook_seminar</a><br>
-----------------------------------------------------------<br><br>----------------- Director Training Course ----------------<br><br>In early December, the nonprofit Board Director Training <br>Institute of Japan will offer its first two-day “director <br>
training” course, covering not only legal and corporate <br>governance topics but also the leading edge of management <br>subjects that responsible directors need to understand: <br>risk management, interpreting financial statements, <br>
strategy, M&A etc. The course will be in Japanese, and has <br>a first-rate lineup of lecturers from leading business/law <br>schools and institutions such as Deloitte, Monitor Group, <br>White & Case, and GCA. Let your friends - or companies you <br>
invest in - know that they can apply to this <br>"first-of-its-kind" course at: <a href="mailto:info@bdti.or.jp">info@bdti.or.jp</a>!<br>-----------------------------------------------------------<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 comments this week.<br><br>***********************************************************<br>END<br><br>SUBSCRIBERS: 8,314 members as of Nov 27, 2011<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>
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<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><br><br><br><br><br>