ICL Plc’s activity in Japan dates from the 1981 Technology Exchange Agreement under which ICL agreed with Fujitsu Ltd, that among other things, the guts of its mainframes, though designed by ICL, would be manufactured by Fujitsu. In 1984 ICL set up a purchasing office initially in the offices of its forwarding agent, an activity that grew to #100m of equipment from a variety of Japanese manufacturers including Oki, Ricoh, Toshiba, Panasonic and Hitachi as well as ICL’s owner Fujitsu. Alan Lawson is the ICL branch manager and representative in Japan. He originally joined ICL as a contract negotiator for tape products, a business activity rather than a technical role, and was sent by ICL to Japan in 1989 as a participant in the European Commission Executive Training Program; in an 18-month intensive course he learned fluent Japanese and had valuable experience at a number of Japanese trading houses and manufacturers.
Purchasing activity
However ICL Japan’s real take-off dates from November 30 1990, the date of the purchase by Fujitsu of the 80% of ICL held by Standard Telephone & Cables Place, and the start of Alan Lawson’s stint as branch manager. Fujitsu and STC agreed at that time to move towards selling at least a portion of their shares and relisting ICL as a public company; initially expected within five years, this has not yet come to pass, and the recent move of ICL chairman and chief executive Sir Peter Bonfield to British Telecommunications Plc gave rise to various UK press reports casting doubt on the timing of this relisting. Lawson says simply that ICL’s market value has not yet reached the value put internally on the business. November 30 1990 changed ICL’s perspective in Japan too: synergy with Fujitsu became more important, one recent example being the merger of two separate personal computer distribution companies in South East Asia into Fujitsu ICL Trading Asia in Singapore. This company is the physical distribution arm of separate sales activities for high- end ergonomic personal computers manufactured at the former Nokia Data Systems plant in Kilo in Finland, mainly into the corporate market. Another example of a successful joint activity has been the development of TeamOffice software product – sold by Fujitsu and ICL under the same name, and expected by Lawson, to be the number one office automation package in Japan within two years. The purchasing activity is still a major one for ICL Japan and half the current 10 staff are engaged in this. The other focus, one for which Lawson holds great hopes, is a technology marketing activity, begun only two years ago. Top products from the ICL group, primarily in the middleware or openware field, are promoted into existing partners such as Fujitsu, or where Fujitsu is not perceived to be the ideal partner, either because it has a competing product or there is felt to be a more focused channel to market, to a group of new partners and distributors. Already some success in this field has been achieved, although the projects are still in the Japanisation and skills transfer stage and royalty streams have not yet started. As an example, local software distributor Getz Brothers has taken the Dais object request broker, which permits access to many different databases across an organization, invisibly to the user.
By Anita Byrnes
ICL is looking for a partner for Dialogue Manager, a middleware product designed to integrate client-server and legacy systems. Another product, Access Manager, a single log-on client-server security manager tool, based on technology supplied to the defence industry, is promoted in Japan by Fujitsu, while in the US, Electronic Data Systems Corp is one of the partners. On the hardware side, there is a partnership with Chiyoda Joho Kiki to sell the TeamServers and SuperServers, and in a systems integration role, a small Japanese company Jenkyn Associates sells ICL personal computers and servers, mainly to foreign companies in Japan. In addition ICL is currently in negotiation with a couple of other partn
ers, but no details were forthcoming. ICL Japan is currently working on business plans for two other products: ProcessWise, a business process re-engineering tool, based on a joint European project; and Electronic Purse, ICL’s competitor to Mondex. Electronic Purse is currently being piloted in Ireland, Nigeria and Russia; ICL has a window of exclusive rights for business in Japan until 1998. Lawson sees that what is key in a limited timeframe is to find the right partners – because of the 10 to 15 years it will take to get the concept universally accepted. The Japanese government has already committed Japan to launching electronic money from 1998, and has set up a study group with representatives from the all-powerful Ministry of Finance, the Bank of Japan, Fujitsu and Nippon Telegraph & Telephone Corp to investigate the concept. The pre- paid card concept has found considerable acceptance already in Japan. One difference with systems outside Japan is that the Ministry of Finance has already decreed that credit card companies, which elsewhere have been the most enthusiastic participants in such projects, will have no role in electronic commerce. Electronic Purse has a number of advantages over the Mondex product, for example it creates an audit trail which would make it more acceptable to banks, says Lawson. The plans for both the ProcessWise and Electronic Purse projects are being worked on by two teams of participants in the Japan Market Entry Competition, an innovative project sponsored by seven foreign Chambers of Commerce in Tokyo, now in its third year. Individuals that participate in the competition receive business training in Japan market entry and then spend three months working on business plans for real market entry projects. The cost to sponsors that have put up the projects is a fraction of what they would pay to strategy consultants.
Trampled on
ICL Japan has also been involved in a number of consulting projects, in particular concerning security and quality systems, with the major Japanese telecommunications provider. While the cost of services delivery in Japan is very high, said Lawson, such projects give a company a lot of credibility. Consultancy will expand as the Japanese market develops; the concept of actually paying for consultancy is fairly new in Japan, thanks to the years of consultancy and software development services provided gratis by large manufacturers such as Fujitsu and Hitachi Ltd. Asked whether the Fujitsu relationship was any hindrance to developing other alliances, Lawson admitted that initial reactions from prospective partners varied from curiosity to fear of being trampled on, but that there was a gradual recognition that ICL was an autonomous company. Over the next year, he would like to see ICL change from a branch office – a corporate structure which does not permit real trading – to a limited liability Japanese company, in order to be seen as a permanent and separate entity in Japan. In conclusion, Lawson commented that he saw great potential in the Japan, which comprises 16% of the world’s information technology spending, and that with Japan’s move to open systems, there was good synergy for ICL products.
