The West's computer race: 3 reports
Japan has carved large chunks out of the US market in just about every industry it enters - cars, tractors, stereos, and now computer hardware. But here's one US industry that analysts say will present Japan with a much tougher act to follow: software for personal computers.
Software is the set of programmed instructions telling a computer precisely how to execute a task. It comes on magnetic disks that are plugged into the microcomputers they're made for. Sales of those record-like disks are expected to rise from $945 million in 1982 to $6.7 billion in 1987, according to INPUT, a California-based computer research firm.
The Japanese have spotted that revenue-producing potential, as well as their own weakness in the area, according to William H. Swegles, director of business planning for TRW-Fujitsu Company. But he and other analysts say software is far different from other areas of computer technology, and will present Japan with an unprecedented set of obstacles.
Microsoftware developers are a breed apart - a breed that doesn't find much support in the Japanese system, no matter how much the Japanese want to get a leg up on software, analysts say.
Software developers are ''creative mavericks,'' as Mr. Swegles put it, and the companies they've formed in the United States are generally small and very specialized. Microsoftware executives are more frequently seen in blue jeans than in three-piece suits, and in most cases started their companies in dormitory rooms and basements.
Developer Lou Clapp, who a couple of years ago started Software Resources, a company that designs financial-analysis microsoftware, is confident US developers have a good lead on the Japanese.
He says there's no question the Japanese are good at manufacturing high-quality hardware. ''It's how that hardware is used - the application of it - that's going to be the dominant thing in the computer industry.''
''There's a whole different type of process involved in software development - more analogous to art than to high-volume manufacturing,'' says David Solomont , president of Business & Professional Software Inc.
Typically, a designer gets an idea for a way to meet a specific need or problem in a particular home or business environment. He frequently spends 18 -hour days in front of his computer terminal, working out the hundreds of simple commands it needs to execute a creative new task or application.
That creative maverick, Swegles says, is a rare breed in Japanese business, where individuals are not generally encouraged to stand out. Also, developing a company on one's own is not encouraged by Japan's system of life-employment with one company, says Ken Churilla, a consultant for INPUT.
Swegles, who has spent about half of his time in Japan over the past decade, delves even deeper into the problem software offers the Japanese. He says that in Asian cultures, people generally think inductively (from the specific to the general), as opposed to the deductive Western approach that tends to go directly from a general issue to the specific problem needing correction.
For example, the American software developer will find out what the computer user wants his system to do, and immediately begin looking for an answer to that need.
The Japanese method gets to the solution more slowly. Swegles says that after spotting a problem, the Japanese developer tends to spend more time with the problem to find out all its ramifications before he sits down to find the solution. ''He wants to know immediately how the problem applies generally,'' Swegles says, so he can analyze all the data before approaching the solution.
This approach, Swegles says, does not easily or quickly spawn specific software packages that attack specific needs. It was more effective in coming up with better cars, stereos, and computer hardware. What the Japanese did with computers, for example, is jump into the market late in the computer's competitive life and produce a better or less expensive computer. ''Ten years ago, when computer life-cycles were five to seven years, the Japanese were very good at reverse-engineering (copying) IBM's computers. Back then, they would more effectively cost-engineer the machines, making them cheaper with mass-volume production once the market was in place,'' Swegles says.
Things are different now. According to industry analysts, a computer's success on the market is increasingly tied to the amount and quality of software available with it. Add that to ever-shortening product life cycles (a computer's competitive life is now said to be 18-24 months) and the conclusion Japan is drawing is that there's no longer time for imitation. So competitive personal computer hardware is getting as difficult to produce as software.
To beat that handicap, Japan last April launched its $430 million Fifth Generation Computer Project. The goal of the 10-year project is ''a massive, fully integrated, networked software system.'' As formidable as the project sounds, US developers aren't certain that $430 million certifies a major Japanese assault on software.
According to a report in Datamation magazine, the project, rather than being a detailed blueprint for the computer system of the 1990s, is more like a list of computer technologies Japanese companies should funnel research money into. Analysts warn, though, that the project could create a kind of research cartel that could help the Japanese make rapid progress in the targeted areas.
If Japan has trouble penetrating the US market, it may be able to buy its way in, taking over successful, market-wise US firms. An example is Swegles's company, TRW, which on Wednesday sold its 49 percent share of TRW-Fujitsu to the Japanese.
The current big plus for American developers is that they are located close to their market, most of which is still in the US. Mr. Churilla of INPUT says most successful microsoftware comes as a result of knowing the needs of the end user.
''Business applications are somewhat nationalistic in flavor, and the US has some of the most up-to-date management practices and techniques,'' says Mr. Meserve of Arthur D. Little. He adds that it's difficult for a Japanese entrepreneur to keep up with the requirements and rapid evolution of that environment. Also, he may not know how to get his design in the right distribution channels for software buyers, Meserve says.