Demand for Java applications and tools is growing worldwide, but finding profits overseas can sometimes be about as straightforward as tracking down a misguided pointer in a pile of C code. In particular, setting up a system for software localization and choosing a method for distribution can be daunting tasks for developers unfamiliar with local market players and customs.
Massachusetts-based Applix, Inc., which in March rolled out its Java decision support tool suite, Applix Anyware, in Japan through distribution partner K.K. Ashisuto, knows what it takes to turn success at home into revenue abroad.
JDJ spoke with Applix President and COO Jay Waldron, Applix General Manager for Japan Hiroshi Sato and K.K. Ashisuto General Manager of Applix Products Kunio Aoki about the partnership between Applix and Ashisuto and the lessons the companies have learned about selling U.S.-developed software overseas.
JDJ: Would you each describe your role in the partnership?
JW: I am president and chief operating officer of Applix and I'm responsible for engineering, product development, marketing and sales. Prior to this position, I was vice president of international sales; hence, my involvement in Japan. I still spend a reasonable amount of time in Japan, meeting with our various partners. At Applix, our focus in Japan is to work through partners and in the Java space, our partner is K.K. Ashisuto.
HS: My title at Applix is General Manager for Japan. We have a local representative office - we're not incorporated in Japan. We are now entering the fifth year of our relationship with Ashisuto. In Japan, we're selling Applixware and Applix Anyware through Ashisuto and Applix TM1 through another distributor.
KA: I work for K.K. Ashisuto, where I am general manager of Applix products. Ashisuto is a pure reseller - we don't develop any software of our own - and our annual sales are around US$150 million. The products we distribute in Japan come from Oracle, Computer Associates, Information Builders, Applix and others. Our customers are 2,500 of the biggest companies in Japan, including Fujitsu, Toshiba, NTT and Kansai Electric Power.
JDJ: When did Applix begin to think about entering the Japanese market and what did you consider to be the opportunity?
JW: In 1992, our business was Unix-based decision support systems and Japan was a big market for workstations. The vertical markets that were driving that were financial services, manufacturing, telecommunications and government, all large users of Unix workstations. It was very important for us, particularly in the financial services market, to be able to offer multinational deployment and services because many of the financial services companies have bases worldwide. And Tokyo is, of course, a major financial center. So, in order to aggressively pursue New York, we needed to be able to support a client's operations in London, Paris, Frankfurt, Hong Kong and Tokyo.
JDJ: What was Applix looking for in a partner?
JW: We were looking for a partner that could provide a number of different things for us. One, we wanted someone who would not just represent our product but also represent our company - understand the business and represent it effectively to the market. We felt Ashisuto really fit the bill in that regard. They had a good track record in terms of sales of system solutions similar to our Applixware product. Secondly, we wanted someone to provide a reasonable amount of consulting and support services. With our products there are typically some services required by the customer, so they had to have a service orientation.
JDJ: How did the two companies meet?
HS: In 1992, Applix hired a consulting firm to find an appropriate partner and they introduced us to Ashisuto. There were other candidates, but we liked the fact that Ashisuto is a very product marketing-oriented company. Also, Ashisuto is celebrating its 25th anniversary this year. Even at the time the two companies met, twenty years of experience generated a lot of trust.
KA: People from Applix visited our office in Tokyo and they brought some very, very good Unix-based products to show us. Then our engineers went to Applix in the US to check out the technical aspects of their products.
JDJ: How does the partnership with Ashisuto work?
JW: The way it works is that, to a very large degree, they are Applix for that market, in Japan. We work very closely with them on cooperative efforts in marketing and product development and we make sure they understand where we are with the business. We have subsidiaries in France, the UK, the Netherlands and Germany and we work with Ashisuto in almost exactly the same fashion we work with those offices. They really are kind of tied into our business.
JDJ: Who performs the localization of Applix's Java applications?
JW: We do the double-byte enabling here and Ashisuto does the language translation: manuals, pull-down menus, etc. They also do the final compilations and they provide first- and second-level support.
KA: Four people were required for the localization: three programmers and one translator. The program part took about three months, but the translation part took a lot more time because there are many documents, such as messages and help.
JDJ: How would you rate Applix's success in Japan?
JW: About 45 percent of our business is international and if you look at the number of seats we ship worldwide, Japan represents about 10 percent. But because we offer multinational support, that's added seats from other countries. For example, we've got systems in JP Morgan in New York and Tokyo. In the telecommunications industry, our client Ericsson has about 25 developers in Linkoping, Sweden developing applications for worldwide use, and about 20 percent are going to end up in Japan. That was a key part of their decision criteria and I think that trend is going to continue. It's a global market.
JDJ: How is Applix Anyware being received in Japan?
HS: Response has been very good, but we've only recently begun selling Anyware in Japan because the JDK 1.1, which supports Japanese, has just become available.
KA:Many companies are interested in server-based products because the client/server model is expensive and very difficult to maintain. Anyware is very rich - there is a lot of functionality. We have some competitors in Japan who will offer parts of what we offer, but nothing like the complete package from Applix.
JDJ: In general, what is the level of interest in Java in Japan?
JW: There's tremendous interest. In fact, I think there's a higher level of interest than in the U.S. It seems to have permeated the high-tech culture in Japan. Everybody talks about it - maybe it's because it hasn't been delivered yet in a broad fashion because of the kanji support. But it looks to me like it's ready to just take off in Japan.
KA: Performance is a requirement, so the three-tier model is important, I think. Japanese companies expect to use Java as a database front-end. Anyware lets customers access their Oracle, Sybase and Informix databases from a browser and today that kind of need is big, especially at big companies. Also, these companies want to develop mission-critical applications using Web technology, so application development tools are important, too.
HS: In Japan, Microsoft has a lot of power, and Japanese users and VARs don't have many options. System integrators, VARs and PC retailers here are hoping the Java market takes off so they can offer more of a choice to consumers.
JDJ: What should foreign developers do if they're thinking about doing business in Japan?
KA: My advice is to first learn about the Japanese market and Japanese customs, which are different from those in the US. Sometimes additional functionality is required. For example, Japanese word processors are quite different from the ones in the US. Sun might be a good place to start because they know the market. Another choice is hardware distributors like CTC and Fujitsu for Sun platforms. For NT, hardware makers like NEC, Fujitsu and Compaq would be a good place to start.
HS: From a marketing perspective, you'll need a good partner to ensure success. There are many ways to find partners. I think one good way to start might be to ask for the local list of Microsoft Solution Providers, or other ISV lists. Those lists will give you a lot of potential candidates.
JDJ: Do you have any words of advice for developers looking to enter Japan or, for that matter, any foreign market?
KA: As far as structure is concerned, from some developers' perspective a joint venture is good because the venture will commit to the developer's product and their company. From the perspective of a local distributor like Ashisuto, however, a distribution agreement makes the most sense because we don't need to commit totally to one company or product. We can concentrate on the customer and deliver the best products, no matter who makes them. We can be flexible because we are not a subsidiary of any developer. We want to be the best partner from the customer point-of-view.
JW: My advice is patience! It doesn't happen overnight. And, particularly in Japan, I think it would help tremendously if you don't try to go it yourself. Find a good partner. When you're dealing with business solutions for corporations, potential clients will be looking for someone they can trust. They need this thing to work to help their business, so they're looking not only at the product you're delivering, but also at the person who's delivering it. They're saying, "Are they going to be able to service me, support me and be here for me?Ó If they see a small, U.S.-based sales office and that's it, they're not going to see a strong commitment to the market. So, having a local presence and a local partner who can deal with those relationship issues for you is, I think, critical. The partner also lets you know who are the players, who are the early adopters in each of the segments. They know that and it's very difficult to come in from the outside and figure that out.
About the Author
Andrew Raskin is a bilingual (English/Japanese) freelance writer and Java programmer in New York City and can be reached at [email protected]