Why Aren't Japanese IT Companies Stronger In U.S.?

I've been reminded twice over the past few weeks of just how little mindshare Japan's big three IT companies have on this side of the Pacific. First, the vast majority of my fellow geeks at Tech Field Day didn't realize that NEC made servers and storage systems in addition to monitors and PBXs. Then I read a series of blogs from folks that went to Hitachi's 100th anniversary bash in Japan referring to HDS as "masters of stealth marketing." So why don't these established companies have better mar

Howard Marks

August 4, 2010

4 Min Read
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I've been reminded twice over the past few weeks of just how little mindshare Japan's big three IT companies have on this side of the Pacific. First, the vast majority of my fellow geeks at Tech Field Day didn't realize that NEC made servers and storage systems in addition to monitors and PBXs. Then I read a series of blogs from folks that went to Hitachi's 100th anniversary bash in Japan referring to HDS as "masters of stealth marketing." So why don't these established companies have better market positions here in the US of A?

In Japan, NEC, Fujitsu and Hitachi dominate the IT industry.  They make the PCs, laptops, servers, storage and network gear that keep Toyota, Nissan and Nissin Foods running.  They also make things including PBXs and nuclear power plants (which in my humble opinion are way better than diesel generators for data center backup power). All three have U.S. subsidiaries that sell IT gear, but only HDS has any significant mindshare in North America.

Hitachi's USP-V SAN competes successfully at the high end of the storage market. HP OEMs it under the XP brand, and Sun resold it before that company's assimilation into Oracle. But well-informed thought leaders in the storage industry such as Devang Panchigar, who blogs as StorageNerve, and Robin Harris of StorageMojo fame, were unaware that HDS also sells a variety of other products: midrange arrays, HCP (a RAIN object store) and blade servers. I've heard rumors that Hitachi is shopping for an IT services firm, which should move it closer to the HP/IBM model and perhaps raise the company's profile.

Fujitsu makes block storage arrays with Fibre Channel and iSCSI interfaces under the Eternus brand, ranging from the 12-drive Eternus2000 Model 100 to the 2.7PB Eternus8000. It also makes Ethernet switches,  rackmount  servers with Intel or Sparc processors, and blade servers. Fujitsu even made it own disk drives until recently, when it sold that division to Toshiba.  Fujitsu had a joint venture with German electronics giant Siemens until recently, and was successful enough in Europe and the Middle East to be the world's third largest IT services provider after HP and IBM.

NEC also makes a full range of data center products, from supercomputers and rack servers to disk arrays. It also has a couple of unique products that I think would sell pretty well if the company would spend any money on Western-style marketing. I described its backup/archive storage system HydraStor in my last blog post. The European delegates to Tech Field Day were vexed that NEC hasn't even tried to sell it outside Japan and North America.

The other unique product is the Express5800 line of fault-tolerant servers. Rather than run a loosely coupled cluster run by the OS, each Express5800 includes two full sets of processors and memory that run in lock-step with each other in hardware. When a problem occurs in one processor complex, the other takes over at the same CPU instruction with no failover delay.  Stratus uses the NEC hardware as the core of their fault-tolerant systems.

All three companies should be able to take advantage of the positive image of Japanese products in the U.S.  While that reputation is somewhat tarnished by recent problems at Toyota, most Americans would still agree with Marty McFly that all the best stuff comes from Japan.

So what's the problem? I think my experience with a pair of Japanese companies offers some insight. I worked with Sony and Canon in the early 1990s when they were trying to introduce various PC products into the U.S. market.  Both companies' U.S. groups were driven by decisions made in Japan by people that didn't understand the American market or really seem to care if they were successful.  Canon had an interesting combination PC, phone, answering system and fax, complete with thermal printer built into the monitor. Unfortunately, someone in Japan decided the U.S. market could use the version based on a 386, even though they had 486-based versions in Japan, as there was a tariff on more powerful systems.  My report said the gadget hound who might be interested would never buy an underpowered PC so they could get rid of their fax machine. If these firms would release their U.S. subsidiaries and learn to make a bit of market noise, we'd have more competition for our dollars--and that's almost always a good thing.

About the Author(s)

Howard Marks

Network Computing Blogger

Howard Marks</strong>&nbsp;is founder and chief scientist at Deepstorage LLC, a storage consultancy and independent test lab based in Santa Fe, N.M. and concentrating on storage and data center networking. In more than 25 years of consulting, Marks has designed and implemented storage systems, networks, management systems and Internet strategies at organizations including American Express, J.P. Morgan, Borden Foods, U.S. Tobacco, BBDO Worldwide, Foxwoods Resort Casino and the State University of New York at Purchase. The testing at DeepStorage Labs is informed by that real world experience.</p><p>He has been a frequent contributor to <em>Network Computing</em>&nbsp;and&nbsp;<em>InformationWeek</em>&nbsp;since 1999 and a speaker at industry conferences including Comnet, PC Expo, Interop and Microsoft's TechEd since 1990. He is the author of&nbsp;<em>Networking Windows</em>&nbsp;and co-author of&nbsp;<em>Windows NT Unleashed</em>&nbsp;(Sams).</p><p>He is co-host, with Ray Lucchesi of the monthly Greybeards on Storage podcast where the voices of experience discuss the latest issues in the storage world with industry leaders.&nbsp; You can find the podcast at: http://www.deepstorage.net/NEW/GBoS

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