May 1st, 2002
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Dear Friends of Tomigaia,
After a busy April, I hope you all enjoy this month's
newsletter. If you missed the past issues, they are available
at http://www.tomigaia.com/archives.shtml. New Feature: Bad
Translations! On the archive page above are links to a free
translation site provided by Excite Japan. For all you
Japanese readers out there, you can enjoy this newsletter in
stilted Japanese!
Contents: Part 1) On the Road: Broadband for the Masses, from Vegas to Tokyo
Part 2) New Ideas: Oddpost
Part 3) News Analysis: Japan under the Microscope: Mizuho Anyone?
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On the Road: Broadband for the Masses, from Vegas to Tokyo
This month I traveled to Las Vegas to help operate a booth at the NAB
convention for one of my clients, Digital Garage Inc. I actually like
going to conventions, as you get to meet a lot of people who would
otherwise be difficult to approach or not on your
radar. Unfortunately, attendance was down 20% this year compared to
last year [1] showing the effects of the current slump in spending in
the broadcast and broadband industries. Despite this fact, there were
still around 100,000 people there to meet!
Instead of just gawking at all the lavish carpeting and the pretty
plasma displays, for this event I tried to look at everything through
the lens of "what are the killer applications for broadband". I must
say that I didn't see anything that filled the bill, but there were
some interesting ideas on display that may hold promise.
Some highlights of the show for me were: audio (music) identification
technology from Fraunhofer (see [2]), video archiving technology from
NTT called SceneCabinet (see [3]) and Smoothy, a new
digital content commerce system from Digital Garage.
My feelings after looking at many booths and playing with many demos
are new very clear. The current generation of set-top boxes leave a
lot to be desired, and will never fully converge with the PC. On the
other hand, the PC may replace the set-top box with the release of PVR
software coming soon. In general, I got the feeling that a lot of
people had had to scale back their ideas and their dreams for an
explosion of broadband usage in 2002. While making the mood at NAB
more pragmatic, I found the hype somewhat easier to digest than at
shows in previous years. (One side note: half of the taxi drivers that
I met in Vegas had broadband internet connections at home. One asked
me how to trade music files without Napster!)
After a week in Vegas, I flew to Tokyo for a week of meetings. While
there, I wanted to get a better grasp of the situation on the ground
in Japan , and to gauge firsthand if the economy was getting better or
worse, or neither.
In a nutshell, I can state that the IT economy is going through tough
times, but will not have a meltdown like the US IT economy did in
2001-2002. I also saw some signs of major social changes happening in
Japanese society: more unemployment among the salarymen, young people
without jobs sending i-mode mail all the time, old friends closing
down of many of the family run businesses in my old neighborhood of
Tomigaia after chain stores came to town, and a general apathy towards
the government and politicians.
One interesting meeting I attended was at the NTT BroadBand offices
where they demonstrated the new Fiber-to-the-home service. Right now
in Japan, anyone can order a 100Mbs fiber line, and NTT will send a
team out to run fiber to your house. For around $100 a month, you have
"best-effort" service (no guarantees of uptime or actual bandwidth). I
saw some of the content and applications that NTT is supporting, and
the MPEG2 video at 6Mbps looked fantastic. I also saw video-publishing
portals and video-conferencing portals, as well as pay-per-view
content. It seems like NTT is trying very hard to offer a compelling
package, and they are having a fair amount of success so far. I don't
want to think about what Verizon would charge for a 100Mps connection
to my house in New York City!
For me, April was a month filled with travel and work, but I got the
feeling that both the Americans and Japanese are moving quickly towards a
nebulous place called "broadband-land" without knowing exactly what
they want. I would keep my eyes on NTT for a while, and see what
happens with their grand experiment of FTTH. It could be bigger than
FOMA! ;-)
References:
[1] http://www.lasvegassun.com/sunbin/stories/business/2002/apr/05/513269233.html
[2] http://www.emt.iis.fhg.de/produkte/audioid/index.html
[3] http://www.ntt.co.jp/cclab/e/pamph/sp/sp1.html
[4] http://www.garage.co.jp/smoothy/
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New Ideas: Oddpost http://www.oddpost.com/
While on the road this month, I got a chance to use a exciting new
service called Oddpost. An long-time friend of mine, Iain Lamb, is
one of the co-founders of Oddpost, and he gave me a free account
while it was in the beta testing stage. It was opened to the
general public last month, and has got a strong response from
paying users. For $30 a year, a customer has a ad-free web-email
service that unlike Hotmail and its ilk, ACTUALLY WORKS LIKE A
REAL E-MAIL PROGRAM! (Sorry about the caps. I am a believer now!)
Iain and his team have built an Outlook work-alike out of DHTML,
meaning that the mail program is built into the web page. Once you
download the 50k page, you begin to see the true power of a
lightweight portable mail client. Drag-and-Drop, column sorting,
subject filtering, separate message composition windows, it is all
there! It works best with IE 5.5 and 6.0, and it supports remote
POP mailboxes, so you can use it with your current mail
accounts. For a list of all the features, check out the web site,
and if you are tired of slow, user-unfriendly web e-mail, give the
free 30 day trial a shot. You won't be disappointed. (Note to
Japanese language users: there are some minor problems with the
Japanese mail support right now, but they will all be fixed very
soon.)
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Coming Up Next:
With the real economic gloom in Japan growing, the press has to
try hard to find any good news among all the bad. A lot of bad news in
April was related to banking, and how Mizuho Financial Group had made
a big mess of the technology integration of the 3 main banks that
merged: Dai-Ichi Kangyo, Fuji and the IBJ. To summarize: some ATMs
stopped working for up to 3 weeks, a power company couldn't get paid
by its customers, and the public's trust in banking systems was
shattered (see [1]). I talked to many people in the streets of Tokyo
two weeks ago, and I asked them if they were going to close their
accounts with Mizuho. Some already had, some said that they were
moving all their money as fast as possible, but a few gave a shrug of
defeat, and said "what makes you think that the other banks are
immune?". Perhaps software testing and quality assurance are not
endemic to Japanese banks? Or perhaps they get forgotten when 3
corporate cultures collide, and there is a lack of incentive to
cooperate with teams from a former rival?
The only positive story I could find this month was an AFP
wire story picked up in the Taipei Times (see [2]) that described how
some large Japanese companies are planning on increasing IT spending
this year. The article points to the desire of Japanese management to
"streamline operations" as the reason for the increase. From my
experience, buying new hardware and software is the last stage in the
process of "streamlining", so either these Japanese companies have
already completely finished refining their business models and
processes over the last 12 months in secret, or, as I suspect, they
are doing everything backwards, adding more inefficiencies to the
process. Some things never seem to change!
References:
[1]http://www.stickyminds.com/sitewide.asp?function=search&freetext=mizuho
[2]http://www.taipeitimes.com/news/2002/04/29/story/0000133891
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Thanks for your time,
Cyrus Shaoul
CEO
Tomigaia Inc.
http://www.tomigaia.com/
cyrus@tomigaia.com
tel (718) 788-7535
fax (718) 788-7539