Computers and peripherals. (Japanese Companies in the United States).(Japanese electronics companies partner for online market portal)(Brief Article)

Three of Japan's huge, vertically integrated electronics manufacturers - HITACHI, LTD., MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and TOSHIBA CORP.- are among the eight launch partners of an INTERNATIONAL BUSINESS MACHINES CORP.-spearheaded independent, global B2B electronic marketplace dealing in the estimated $700 billion worth of goods and services bought and sold annually worldwide by the computer, electronics and communications industries. e2open.com, which was scheduled to be operational by mid-July 2000, will be hosted and built by IBM Global Services, the computer giant's major information technology outsourcing services unit, using IBM's own know-how and that of its two e-business technology partners, ARIBA, INC. and 12 TECHNOLOGIES, INC. The founders of e2open.com, which also include NORTEL NETWORKS CORP., a top maker of communications infrastructure equipment, disk drive supplier SEAGATE TECHNOLOGY, INC. and leading contract manufacturer SOLECTRON CORP., are expected to contribute up to $125 million in capital; half of the on-line exchange's equity will be split equally among them. In addition, CROSSPOINT VENTURE PARTNERS and MORGAN STANLEY DEAN WITTER & CO. have committed $80 million to e2open.com; they will own 20 percent of the business. IBM is quick to emphasize that the e-marketplace's services will be comprehensive, extending well beyond just enabling electronics manufacturers broadly defined and their suppliers to buy and sell goods and services more efficiently. It also cites several ways in which e2open.com differs from competing B2B Internet ventures. One of those, organized by IBM rivals COMPAQ COMPUTER CORP., GATEWAY, INC. and HEWLETT-PACKARD CO., also has backing from Hitachi as well as from NEC CORP. (see Japan-U.S. Business Report No. 369, June 2000, p. 3).

Corporate restructuring in Japan is taking many forms, including, in some instances, alliances between otherwise rivals. That is one course chosen by HITACHI, LTD. in its attempt to refocus its reportedly money-losing computer business away from System/390-compatible mainframes and other hardware to systems solutions. It signed a memorandum of understanding with mainframe nemesis INTERNATIONAL BUSINESS MACHINES CORP. to cooperate in the field of IT systems. The agreement, expected to be finalized by yearend 2000, talks vaguely about collaborative development and manufacturing, cross-purchases on an original equipment manufacturer basis of future IT systems and the mutual supply of cutting-edge components. To some analysts, the import of the MOU is that, sooner or later, Hitachi will become an IBM technology supplier, especially of central processing units, rather than a competitor in the mainframe field. Its wholly owned HITACHI DATA SYSTEMS CORP. subsidiary recently pulled out of the American market, at leas t temporarily, because of IBM's aggressive pricing of what commonly are called enterprise servers (see Japan-U.S. Business Report No. 367, April 2000, pp. 3-4).

HITACHI, LTD.'s priority on strengthening its systems solutions business also is behind a wide-ranging relationship with MICROSOFT CORP. Their alliance, which will focus initially on the Japanese market but which is expected to take on a global cast in time, has two thrusts. First, Hitachi, no slouch in the software department, and Microsoft will develop Internet-oriented solutions for businesses of all sizes that build on the software behemoth's enterprise platform technologies -- the Microsoft Windows 2000 operating system and such supporting programs as Microsoft SQL Server and Microsoft Exchange Server. Second, the new partners will form a Japan-based venture in October 2000 to market their Windows 2000-derived products, provide consulting services and deliver high-availability support services. This company, to be staffed on start-up by 300 people drawn from both firms, could have as many as 1,000 employees by March 2002 and revenues of $188.7 million in the following business year. Additionally, Hitachi , together with the jointly owned company, will train approximately 10,000 engineers for certification of Microsoft. enterprise platform solutions and open 10 customer solutions centers around Japan to backstop the alliance. To many observers, the Hitachi-Microsoft relationship is perhaps of greater potential benefit to the Redmond, Washington partner, helping it to expand in Japan and the rest of Asia by piggybacking on Hitachi's various areas of technical expertise and broad industry contacts.

Industry sources report that FUJITSU, LTD., which also is reeling in the North American S/390-compatible mainframe market because of INTERNATIONAL BUSINESS MACHINES CORP.'s take-no-prisonerstactics, will switch its high-performance computer strategy to Unix servers as soon as 2001. The company's wholly owned AMDAHL CORP. unit ranks a distant third in U.S. mainframe sales. According to the current speculation, Fujitsu will use the Sunnyvale, California firm's distribution channels as well as those of its HAL COMPUTER SYSTEMS, INC. subsidiary, a Campbell, California Unix workstation vendor, to break into the Unix server business. Its reported goal is to be selling between 10,000 and 15,000 systems a year by 2003.

NEC CORP., the top seller of PC servers in Japan, will debut in October 2000 a new line of Express5800 products for Microsoft Windows 2000 environments that incorporates fault-tolerant computing technology licensed from STRATUS COMPUTER DE. The deal marks the first time that the Maynard, Massachusetts specialist in continuously available computer platforms has licensed its intellectual property to another company. Stratus will receive royalties on each dual processor-capable Express5800 fault-tolerant system that NEC sells. According to the Japanese company, its relationship with Stratus will go beyond technology sharing to include joint development of server architectures, ASICs (application-specific integrated circuits) and server management software. To demonstrate its commitment to its new collaborator, NEC invested $10 million in Stratus, which has been privately owned since February 1999.

In another first, at least among Japanese companies, NEC CORP. is lending its considerable IT expertise to the IA-64 Linux Project, a 13-month-old endeavor to mate INTEL CORP.'s forthcoming 64-bit processor with the open-source Linux operating system before the IA-64 chip, renamed Itanium, is released. This effort has brought together many U.S. industry heavyweights, including not only Intel but also HEWLETT-PACKARD CO., INTERNATIONAL BUSINESS MACHINES CORP. and SILICON GRAPHICS, INC. on the hardware side and Linux specialists LINUXCARE, INC., RED HAT, INC., TURBOLINUX, INC. and VA LINUX SYSTEMS, INC. A primary NEC contribution will be its technology for dividing data-processing functions among as many as 16 processors. IA-64 Linux Project participants currently are working on a system that scales to four Itanium processors.

Corporate buyers of desktop personal computers looking for performance have another option in NEC COMPUTERS, INC.'s PowerMate CT system. It is the first PC from the Sacramento, California company to integrate the Intel 820 chipset, which supports the bandwidth-widening PC800 Rambus DRAM (dynamic random access memory) architecture. Configurable as either a minitower or a desktop machine, the PowerMate CT runs off a Pentium III processor operating at speeds up to 933 MHz. Other ...