The culture (specifically, the emphasis on collectivism or individualism) plays a crucial role in business decisions and the results affect both the individual and the group.  Looking at the cultural roots, the recent rise and fall of some technology companies, and the decisions made by their management, perhaps we can learn some lessons to address the current issues facing both Japanese and US companies in improving the efficiencies of current IT infrastructure management.   Current trend toward next generation computing clouds offers an opportunity to reexamine the evolution of POTS, PANS and SANs and learn from the lessons of the past.

While there is a lot of debate about pure individualism and collectivism, free markets and planned economies, history and evolution of POTS, PANS and SANs argue for a middle path.

Kyudõ and the Living Bow

The master moves with graceful elegance.  You can feel the intensity of purpose behind his each move.  You see the master’s face radiating cherubic serenity of a stress-free baby looking into the comfort of mother’s eyes.  Blindfolded, the master focuses his attention on the kiai (the spiritual energy – the vibration) to emulate the four seasons, the spring, summer, autumn and winter.  The mind, the posture and the breathing are all orchestrated in harmony to create that moment of perfection when the master, the bow, the arrow, and the target become one.  All I see is the arrow hitting the bull’s eye perhaps 60 meters away.

According to Jackson Morisawa [1], “The ‘aim’ of kyudõ at Chojen-Ji is never an external focus on the external target.  It is, rather, an internal ‘aim’ focused on the center of the perfect cross.  When one reaches the ‘point zero,’ the body, mind, and energy are in perfect harmony and serenity prevails.  This internal harmony works in relation to the external effect, and the arrow that pierces the mark is penetrating and alive.”  Yamada Shõji [2] discusses the influence of Zen on Japanese archery.  “Dead blade and living sword are Buddhist concepts taught in tantric (Shingon) lineages. We take this principle and merely rename it the dead bow and living bow.  It is the same principle as expressed by the saying “Rejoice in death and live (kõshi sokusei); [Try to] insure life and die (hissei sokushi).” [In other words,] when one’s mind is troubled by fear, one’s bow is dead. When one is willing to sacrifice oneself and regards lightly the loss of one’s own life, then one’s bow comes alive.”

A Zen master in Japan, once, told me that the interesting moment of enlightenment is not when you hit the target.  It is when you miss the target, that the self is revealed, and the understanding of your own shortcoming makes you a better person ready for the next aim.

Watching the unusual feat of the living bow and learning about Zen were part of my studies as a student at Japan American Institute of Management Science (JAIMS) in the paradise island of Oahu, Hawaii.  I became an “accidental student” when my boss, Bud Wonsiewicz, at U S WEST, a telephone company, came to me and suggested that I spend a few months in Hawaii and a few months in Tokyo studying Japanese language, culture, and business.  The purpose was to return to US WEST and establish closer partnership in technology and business, development & transfer between the Japanese Telecommunications company Fujitsu and US West.  Fujitsu has a school in Honolulu that brings students from many countries including Japan to learn business management in a cross-cultural setting.  Top management of Fujitsu and US West decided to choose someone from US WEST management to attend this program and spend a few months in Fujitsu Japan working with various groups learning the Japanese Way.  According to Jinjiro Dodo, the then President of Fujitsu America, Japanese understood the role of personal relationships in creating value in business partnerships and Fujitsu created the school with a long-term view to develop business leaders with inter-cultural understanding and close inter-personal relationships.  He also emphasized that both language and culture play a very important role in business conduct and JAIMS encouraged Japanese students to experience the culture through internships in the US and non-Japanese students to experience Japanese culture through internships in Japan.

US West, one of the baby Bells created by the divestiture of the then regulated monopoly, AT&T, was a quintessential example of the rugged western culture of individualism, set out to create dust so as not to fall behind and eat the dust others created (as the US WEST commercial in this blog says).   Bud Wonsiewicz was a renaissance master with a lineage from MIT and Bell Labs who came to US WEST to bring innovation and transform the plain old telephone company to an information services powerhouse.  He had worked with other masters who made UNIX at Bell Labs in Murray Hill, New Jersey.  He was starting experiments at US WEST Advanced Technologies using video walls and information appliances in the late 80s.  He had started collaboration with various universities working on different projects including the transmission of holograms over telephone wires at the MIT Media Labs.  He was impressed with the long-term focus of Japanese companies and took the opportunity to collaborate with them.  Later US WEST was to start a project with Time Warner, Toshiba and Itochu to bring information services to home on cable.  More recently, an Itochu executive told me that the Time Warner deal turned out to be a very profitable venture for Itochu.  The decade that followed was a very exciting time at US WEST for innovators, until a few executives were carried away with the Internet bubble and merged with Qwest.  It did not matter to them what havoc the dust they created wreaked on the universe!  The birth and death of US West should be a good case study for the IT industry to learn how the bubble mergers with inflated valuations led by individual egos can go awry and affect thousands of employees, their dreams and the entropy of the universe.  On the other hand, the case study of Steve Jobs would show the positive impact of a single individual.  Even when everybody else had given up on Apple, he resurrected the software innovation and hardware design, leveraging the institutional knowledge.

The next few years, beginning with my first encounter with Dodo San, turned out to be an adventure in discovering new insights into life, technology, quality management, Japanese business, personal relationships and myself.  Learning about Zen, and watching kyudõ with awe in Honolulu, were just the first steps of a journey that opened my eyes to the power of innovation in America, human resource potential in India, the long-term focus and process savvy of management in Japan.

Zen, derived from Buddhism, which originated in India, connects the oneness of individual’s body and mind to the oneness of the universe with the principle of connectedness of all sentient beings.  The resulting concept of “Sangha” has played a role in the evolution of collectivism.  As Lama Surya Das summarizes [3], Sangha implies true community.  “It is taking refuge in true community itself; communion with others – collaboration, connectedness, engagement, responsibility, working together in an organic way, and not in an addicted manner.”   The concern for the group often played a prominent role in Japanese decision-making process, which often resulted in the individual willingly or unwillingly compromising self-interest in the interest of the group.

Later, when I met Dodo San in Tokyo, he told me over a bottle of sake in a small sushi bar, that globalization is creating a new connected universe where collectivism will transcend national boundaries and he saw building global interpersonal relationships as critical to Fujitsu’s future.  The Internet had not yet become the force that it is today.  Broadband was just beginning to take form and Fujitsu aspired to lead the broadband revolution with emerging Asynchronous Transmission Mode (ATM) Switching and SONET transmission technologies.  Fujitsu wanted to play a major role in computers (acquiring ICL in Great Britain) and the PC revolution.  Cisco was still a Silicon Valley startup struggling to understand what it takes to build telecommunication grade systems for the Internet, which originated from a “send and pray” protocol.

The connectivity Dodo San was talking about was very different from the global connectivity today at the speed of light, to which we are accustomed.  Twenty years later, Cisco has established itself as the leader in bringing Telecom grade trust to IP networks.  ATM switching and all the associated companies have disappeared and Fujitsu is struggling domestically and has toned down its global ambitions.  New companies such as Microsoft, Google and Amazon have emerged, with that unique American innovation, as companies that are the new global communication, collaboration and commerce enablers.   They are offering new ways to access computing services through clouds challenging the conventional Information Technology infrastructure solutions.  Their introduction of computing clouds using the emerging virtualization technology is reshaping the IT infrastructure and its management.  This new revolution will claim new casualties in the conventional IT infrastructure market.  A host of storage and server companies will cease to exist as the next generation servers and storage devices become commoditized.  Some storage companies are already for sale while others are migrating to server and network infrastructure domains to find new ways to survive.

Space -Time Services Continuum & Information Services Changing the Landscape from Banking to Healthcare

The canonical nature of space and time manifests itself in many domains namely, spirituality, theory of relativity, quantum nature of the universe and in just day-to-day living.  In day-to-day life, people have learnt to trade space and time to better organize their lives (manage entropy) and improve productivity.  People are willing to pay to save time as they do when they use faster transportation to move about.  People are also willing to pay for services that allow them to avoid travel by bringing objects and information to where they are and when they want.

The services that people are willing to pay usually have the following attributes [4]:

  1. Choice based on individual requirements
  2. Interactivity
  3. Mobility
  4. On-demand
  5. Cost based on fulfillment-latency tolerance (faster fulfillment at higher price)
  6. Pay per-use  and
  7. The ability to bundle and unbundle the received services

Current generation of information services coupled with high-speed transportation networks have the ability to fulfill these attributes and improve productivity of the individual or group.  Many of the new service offerings in e-commerce, electronic banking, mobile banking, and mobile wallet [5] fall in this category.  Similar attempts are being pursued to improve productivity of health care services.  Information access at speed of light has raised the bar for consumer information services.  The ability to correlate information from many quarters at the speed of light offers the possibility for a new class of services that were not possible before.  In addition, the explosion of social networking, multimedia interactive services and collaboration of groups transcending time and space have placed new demands on service creation, delivery and assurance infrastructure.

In contrast to business services that have higher profit margins, the consumer services have far lower profit margins and infrastructure that the businesses can afford becomes unaffordable for consumer service providers.  While the affordable price points start falling, the volume of services delivered (scaling) increases drastically along with unpredictable fluctuations in demand.  This was true with Plain Old Telephone Service (POTS) and it was true with Pretty Amazing Network Services (PANS) that the Internet made possible.  We are again seeing the same phenomenon with emerging mobile internet services and social networking services.

Services Management and the Information Technology Black Hole

On one hand, any service that is not managed cannot scale.  On the other hand, services always out run the pace of their management infrastructure.  There are several reasons for services to grow wildly before they are properly managed to globally scale and interoperate with other services:

  1. There is a cost involved both in time and in resources to include the management aspects in the design of services.
  2. It is not certain whether the services will be successful or not
  3. The profit margins and management affordability are not clear in the beginning
  4. Time to market pressures force short cuts that become burdensome when the service becomes wildly successful
  5. Evolutionary product and technology changes add layers of services and management infrastructures that become burdensome over time

When the services are distributed, their management becomes an important factor for service assurance to meet the latency tolerance of the service consumers.  Globalization at the speed of light makes automation of distributed services management critical to reduce the human latency and improve the consistency of user experience.

If history is any guide, one lesson that I clearly take away from studying the evolution of POTS, PANS and SANs is that the history repeats itself.  In Bell Labs, we always debated about services and services management and it always turned out that the management platforms were never on time for services to meet the market needs.  Management services were always added as an afterthought, when scaling requirements forced the issue.  Local Switching Generic Requirements came first.  Operation Support Systems Generic Requirements came next.  Finally, the Total Network Operation Processes were designed.

When Cisco first introduced the routers, I remember the lack of basic element management, let alone network management.  When SANs were introduced, I asked if Hitachi storage devices supported dynamic FCAPS (Fault, Configuration, Accounting, Performance and Security) management and people looked at me as if I was an alien.  In all these cases, a huge services industry was created to fill the management gap and it disappeared when the network element providers eventually addressed management.  Recently, when I mentioned dynamic FCAPS management to a couple of Silicon Valley Venture Capitalists (VCs) with respect to virtualization and cloud computing, they gave me a quizzical look and said that they don’t think 90% of the VCs know what FCAPS mean and were skeptical about what it had to do with clouds.  What the current generation of young VCs, the high priests who broker other people’s money for investment in innovation, miss is the fact that telephony is not about voice.  It is about networking abstractions.  It is about end-to-end service creation, delivery and assurance with telecom grade trust, universal access, massive scaling and global interoperability at an affordable price.  Interestingly, SUN got the slogan “network is the computer” right but unfortunately missed the opportunity to create a computing cloud platform before it was acquired by Oracle, thus wasting a generation of innovation and institutional knowledge.  With a broader vision, Bell Labs was able to invent the Transistor and the Laser that transformed the simple voice connectivity to what it is today.  Bell Labs is another example of wasted institutional knowledge dismantled by the short-sighted appetite of free market forces coupled with the poor decisions of a few AT&T executives, regulators, and Judge Green.

Current IT data centers have evolved to meet the business services needs in an evolutionary fashion from server-centric application design to client server networking to Storage Area Networking without an end-to-end optimized architectural transformation along the way.  The server, network and storage vendors optimized management in their own local domains often duplicating functions from other domains to compete.  The application developers also started to introduce server, storage and network management within their applications.  For example, Oracle is not just a database application.  It also is a storage manager, and a network manager besides being an application manager.  It tries to optimize all its resources for performance tuning.  No wonder it takes an army of experts to keep it going.

The result is an over-provisioned data center with multiple functions duplicated many times by the server, storage and networking vendors.  Large enterprises with big profit margins throw human bodies, tons of hardware and a host of software and shelf-ware to address their needs.  Managers in some of the data centers do not even know what assets they have and of course that is yet another opportunity for vendors to sell an Asset Management System that discovers what is available and services to provide asset management using the asset manager.  Another system is de-duplication software that finds out multiple copies of the same files and removes duplication.  This is another example of how expensive it is to clean up after the fact.

Heterogeneous technologies from multiple vendors that are supposed to reduce IT costs actually increase the complexity and management costs.  Today, many CFOs consider IT as a black hole that sucks-in, expensive human consultants, and continually demands capital and operational expenses to add hardware, software and shelf-ware.  Even for mission critical business services, enterprise CFOs are starting to question the productivity and effectiveness of current IT infrastructure.  It becomes even more difficult to justify the costs and complexity to support massive scalability and wild fluctuations in workloads that consumer services demand.  The price point is set low for the mass market but the demand is high for massive scalability.  I understand that a simple service like Facebook alone uses about 40,000 servers.

Unless the cost structure of IT management infrastructure is addressed, the mass-market needs cannot be met profitably.  The cloud service providers are justifiably looking to alternatives just as AT&T looked for alternatives to replace operator services in Telephony.  However, will history repeat itself?  In the rush to provide cloud services and lock-in their solutions, are the cloud service providers making the same mistakes that POTS, PANS and SAN infrastructure vendors made initially and added layers of service management as an after-thought?

Computing Clouds and the Last Best Hope at Crossroads

The evolution of POTS, PANS and SANs influenced the IT infrastructure to change from being server centric in 80s to being network centric in the 90’s and to being storage centric during the past decade.  I remember in the 80s, server vendors roaming the IT data centers to influence the sale.  While the differences between the servers from different vendors were minor, the sale was always made through wining, and dining of a few decision makers.  Sometimes, the new decision makers even reversed the decisions of their predecessors.  In the 90s, the network vendors and during the last decade, storage vendors dictated what the enterprise CTOs and CIOs bought.  Today, storage and its management have become the highly visible costs in the current data center.

With the introduction of server virtualization, and multi-core, multi-CPU green server initiatives, the tables have turned away from storage vendors and we are already seeing the consolidation in the industry where most of the storage companies are on the block for sale, going the way of ATM switch companies.

Amazon, Microsoft and Google in that order seem to have grasped the need for massive scalability and price point sensitivity.  They have successfully exploited server virtualization (some more than the others have) to create cloud environments at the right price points.  They have just started to address availability, performance and security issues.

Today, Cloud Computing (public or private or hybrid) offers the last best hope for saving the enterprises from the IT black hole.  However, unless cloud providers address telecom grade trust and provide end-to-end application visibility and control including business customer mission critical applications, clouds will be relegated to non-mission critical archiving, e-mail (mission critical enterprise e-mail will still be on Exchange) and social networking applications where customers are price sensitive and tolerate occasional downtime. In POTS, end-to-end visibility and control was provided through the automation of operation and business support systems.  The Internet through IETF (Internet Engineering Task Force) request for comment process incorporated end-to-end network operation and management automation.  Unfortunately, in the IT data center, end-to-end application (CPU to Spindle) operation and management is provided by an evolutionary patchwork of systems sold by multiple, server, network, storage, and management software vendors focusing on promoting their own products, which address only piece parts of the solution.   While all vendors pay a lip service to the standards by promptly including them in their roadmaps, they have not helped in reducing the complexity in inter-operability management.  In POTS, PANS and SAN implementations, we repeatedly learnt that the end-to-end Total Cost of Ownership (TCO) is not optimized by optimizing the Cost of Ownership of piece parts independently. This is what Total Quality Management was trying to teach us.

Japanese management should know this better because of their preserved institutional memory of the lessons learnt from the evolution of POTS, PANS and SANs.   Server, network, storage, telecommunications and software expertise is preserved in the Japanese institutions.  On the other hand, in the US, the dismantling of large R&D labs such as the Bell Labs, reduced government R&D, the demise of companies like US WEST and SUN, and the emphasis on startups to create innovation (with the disadvantage of starting from scratch with limited individual knowledge that the new teams bring) have all contributed the duplication, complexity and increased cost of current IT data centers.  Youth, inexperience, quest for quick profits from investors, loss of long-lasting institutional knowledge dismantled by unbridled free-market forces and a culture of making dust without concern on its impact on the universe, limit the current American Management, who depend solely on the culture of individualism, to benefit from the lessons of the collective past.  As the master said, those who ignore the lessons of history are condemned to repeat it [7].  US WEST later was acquired by a long-distance service provider Qwest whose CEO ended up in Jail.  All the institutional knowledge and the investment in innovation went to waste.  It is unfortunate that the rest of the world has to live with the consequences based on the decisions of a few that control money and decision-making. It is unfortunate that the innovation and hard work of many that bring out the best of American individualism is squandered by the decisions of a few paying attention to mostly self-serving short-term interests.

As Professor Ballon [8], pointed out in my class on current issues in Japanese management twenty years ago, waste, duplication and occasional mismanagement are of no visible consequence in a culture that promotes individualism when the resources are abundant.  When the resources start becoming less and less abundant, the group as a whole cannot afford increased entropy.  Similarly, in a collective culture, as resources start becoming more and more abundant, the group can afford a little waste, redundancy and individualism to foster innovation.  Groups usually decide where they stand in this spectrum of possibilities from unbridled individualism to stifling collectivity and adjust to optimize their chances of success both as an individual and as a group.  Success seems to lie in the middle.

The Fujitsu management, I knew, twenty years ago had a long-term vision to build global relationships and develop co-prosperity.  Dodo San twenty years ago, on a winter night, over another bottle of warm sake from Akita, told me that business is like sailing.  “Current wind speed is not your main concern.  You carefully watch for the rate of change of wind speed and direction.  You anticipate the future based on your observations at the present moment with intense focus to make your decisions and act.”  I do not know sailing, but what he said made a lasting impression just as the Zen master hitting the bull’s eye did.  Is the current Fujitsu management watching the rate of change and making its goals such as selling 500,000 servers anticipating the future?  Has the Japanese management learnt from their misses of the past?  This is the subject of my current study and I would like any one with appropriate insights to participate.

References Used

[1] Jackson S Morisawa, “The Secret of the Target”, Rutledge & Kegan Paul Inc., 1988, p35

[2] Yamada Shõji, “The Myth of Zen in the Art of Archery”, Japanese Journal of Religious Studies 2001 28/1–2

[3] Lama Surya Das, “Mind is Mightier than the Sword: Enlightening the mind, and Opening the Heart, Doubleday Religion, 2009, p 168

[4] Rao Mikkilineni, Greg Pugmire, “The Connection Between Profit and Services in the Next Generation Network”, Annual Review of Communications, volume 54, 2001, p 521

[5] http://www.mfino.com/

[6]  https://scalr.net/login.php

[7]  http://en.wikiquote.org/wiki/George_Santayana

[8]  Robert J. Ballon, “Human Resource Management in Japan”, Issue 23 (Vol. 12, No. 1), June 2002, pp. 5-20.  Robert Ballon is a professor Emeritus in Sophia University, Tokyo.  He has written many articles and books on Japanese management, role of individualism and collectivism in business management.  His lectures inspired me to write my thesis under his guidance in 1990 titled “Current Issues in Japanese Management – “Is Japanese Software Thrust As Powerful As Their Hardware Thrust?”

[9] Kenneth Kushner, “One Arrow, One Life: Zen, Archery, Enlightenment”. Tuttle Publishing, 2000

[10] E. Herrigel, “Zen in the Art of Archery” New York, Pantheon, 1971”, Routledge & Paul Keagan Inc., New York, 1988.




Japan is undergoing many cultural, business and political changes simultaneously.  For a nation that once was touted as would be No.1 in national GDP, it must be very painful to see China surpassing it and getting the World’s attention.  This blog observes that the emerging theories of organizational DNA that purport to relate a company’s leadership, strategy, culture and structure to its business success might throw some light on the current Japanese business plight.  For example, disruptive innovation is currently playing a big role in reshaping the market place by Apple and Intel in mobile and cloud computing.  Once very successful, in borrowing and copying innovation, can Japan compete with China and India in the future?  Should the Japanese companies alter their DNA to change the game in the future? Can they leverage their still preserved technical organizations, R&D Labs and investment capital? After all, even if Japan is No.3, their GDP per capita still is about 10 times that of China or India.  Here are some thoughts based on my observations over past two decades.

(日本は今、文化面、経済面、そして政治面でも多くの変化に直面している。日本 は、かつてはGDP世界第一位になろうかと賞賛されもしたが、今やGDPでも中国が 日本を凌駕し、世界を席巻しつつある状況を、痛みを伴いながらも指を咥えて見 ていなければならなくなっている。

本ブログでは、ビジネスの成功と関わりが深い企業のDNA(企業におけるリーダ シップ、戦略、文化さらには構造)について考察し、日本が現在置かれたビジネ ス面での苦境を紐解く新たな理論について示していきたい。 一例を挙げると、モバイルやクラウドコンピューティングにおいて、Apple や Intelが新たな市場形態を作り出したように、今日では破壊的イノベーションが 大きな意味合いを持つようになってきている。 かつてイノベーションを模倣することで大成功を収めたように、今回も日本は、中国やインドとも競い合えるのではないだろうか? また、日本企業が自らのDNAを変革することで、近い将来、Appleのように競争形態を変化させていけるのではないだろうか?さらには、日本企業は技術指向の組織構造をこれまで維持してきたが、Intelのようにもっと積極的に研究所や投資資本を活用していけるのではないだろうか?結局のところ、日本は例え世界第三位に甘んじていても、国民一人当たりのGDPでは依然として中国やインドの10倍近くも維持しているのである。本ブログでは、日本を過去20年以上見てきた経験に基づいて、幾つかの私の考えをまとめていく)

Kabuki Theater

The famous historic theater, Tokyo Kabuki-Za which opened in 1889, closed its curtains in the end of April 2010.  It will be torn down and become a theater and office complex with direct connections to the subway station.  According to Encyclopedia Britannica, Kabuki is a “Popular Japanese entertainment that combines music, dance, and mime in highly stylized performances. The word is written using three Japanese characters — ka (“song”), bu (“dance”), and ki (“skill”). Kabuki dates from the end of the 16th century, when it developed from the nobility’s ‘no’ theatre and became the theatre of townspeople. In its early years it had a licentious reputation, its actors often being prostitutes; women and young boys were consequently forbidden to perform, and kabuki is today performed by an adult all-male cast. Its texts, unlike no texts, are easily understood by its audience. The lyrical but fast-moving and acrobatic plays, noted for their spectacular staging, elaborate costumes, and striking makeup in place of masks, are vehicles in which the actors demonstrate a wide range of skills. Kabuki employs two musical ensembles, one onstage and the other offstage. It shares much of its repertoire with Bunraku, a traditional puppet theatre.”

A. C. Scott [1] writes that the Japanese and Chinese classical dramas have many points in common, yet differ widely from each other.  “The Kabuki, like the Chinese theater, lays great stress upon the virtuosity of the actor.  He supplies the motive for the whole drama.”  The actor must play to a knowledgeable audience within the constraints of tradition but also must display individual style that takes the symbolism to go beyond imitative repetition.  While the Chinese drama emphasizes on the actors singing, Kabuki actors do not sing at all.  “The Kabuki stage is a complex affair with elaborate settings and effects which have been developed to a high pitch of artistry through the centuries.”

For a nation that is very proud of their centuries old tradition and agrarian cultural roots, the symbolism of the Kabuki-Za transition to a modern office complex is just a portrayal of the many changes that are rapidly descending on their culture, business and political landscape.

According to the World Policy Journal [2], “Japan, once considered an economic superpower and potential contender for global pre-eminence, finds itself slipping down the rankings of leading states. Although still the second largest economy in the world (at the time this article was published), it is absent from most realpolitik discussions about the global redistribution of power that is shaping the new world order, which highlight the emergence of Russia, China, and India. China’s rise in East Asia is now eclipsing the land of the rising sun, but Japan’s slippage is not all due to China’s growth. Japan’s maladies stem from three causes largely of its own making: its loss of a distinctive national identity, its international leadership deficit, and its continuing economic and political travails.”

National GDP

According to an estimate by Japan’s Cabinet Office, Japan’s second-quarter in this fiscal year, unadjusted GDP totaled $1.2883 trillion on a nominal dollar basis, against China’s second-quarter unadjusted GDP of $1.3369 trillion.  In the first six months of 2010, Japan’s GDP before seasonal adjustments totaled $2.5871 trillion, surpassing China’s $2.5325 trillion.  “People have been expecting the Chinese economy to grow at a rapid pace and become physically larger than Japan for many years, so it is not a surprise,” said Robert Feldman, chief economist at Morgan Stanley MUFG Securities in Tokyo. [3]

“The issue is whether this will be a trigger for policy changes in Japan,” he said, and he added that in the short-term, domestic political considerations were paramount as prime minister Naoto Kan struggles with a hung parliament and a potential leadership challenge from his own party.  Given the history, being surpassed by China may be not palatable but Japan still leads China in per Capita GDP by more than a factor of 10!

Table 1 shows both nominal and per capita the GDP [4] in 2009.

Japan’s GDP surpassed that of West Germany in 1968 and became the second biggest in the world, topped only by the United States. This achievement was credited to a national effort that supported the Japanese industries who established leadership in exporting automobiles, telecommunications and consumer electronics. Today, the illustrious Toyota is saddled with quality issues [5].  Fujitsu’s ambition in the 90’s to be number one in Information Technology [6] has proven to be totally elusive.  NEC’s leadership in supercomputing has all but vanished and the company is struggling today to find its niche while selling its various assets globally.  Once considered legendary, Sony’s innovation in consumer electronics has been usurped by Apple.  Nintendo’s attempt to change the game with Wii does not seem to be sustainable.  The Samurai business men (even today, there are no significant Samurai business-women) have proven to be not invincible.  What can Japanese businesses do to prevent further decay even if they cannot completely re-engineer to regain the past successes?  How can they leverage their still preserved technical organizations, R&D Labs and investment capital?  After all, Japan is still no. 3 in GDP and No 2 in Per Capita GDP among the top three GDP leaders!

The answer may lie in revisiting the tradition of renewal practiced by the Japanese at the Ise Jingu [7], ”the most sacred shrine in Japan, with great spiritual and historical significance.  One of the most amazing things about Ise Jingu is that the wooden sanctuaries are rebuilt and rededicated to the enshrined goddesses every 20 years in a process called “shikinen sengu”. This tradition began with the first rebuilding in 690, and is still being practiced. The sixty-first rebuilding was completed in 1993, with the sixty-second scheduled for 2013. Ise Jingu is actually divided into two large shrine compounds, containing over one hundred and twenty smaller shrines in addition to the two major shrines: Naiku (Inner Shrine) and Geku (Outer Shrine). The Inner shrine enshrines the sun goddess Amaterasu Omikami, who is believed to be the ancestor of the Japanese imperial family. For this reason, the Emperor visits this shrine when he assumes office, and on other important occasions. It is said to have been erected roughly 2000 years ago, and its location was chosen by the 11th Emperor of Japan, Suinin. The Outer Shrine enshrines Toyouke no Omikami, the goddess of harvest, and was erected in 478 A.D. It is customary to visit the Outer Shrine first, but if you don’t have much time on your hands a visit to the Inner Shrine is recommended.  The entrance to the Inner Shrine begins at the Uji Bridge, which passes over the sacred Isuzu River. There are two large torii gates at either end of the bridge, and it is said that by crossing the bridge one’s mind and heart are purified.  The Uji Bridge is also rebuilt in this ceremony.  What strikes visitors to Ise Jingu the most after passing through the gates is the sense of nature and life around them. The grounds are comprised of 5500 hectares of natural forest as well as young hinoki (cypress) trees, which were planted in 1926 for future harvesting. The trees tower over one passing through the grounds. Along the way to the main building in the Inner Shrine, one can wash their hands and mouth with the water from the Isuzu River at the Mitarashi. This is also done for purifications purposes.”

A Japanese friend of mine says “change or renewal from time to time itself is in the DNA of Japan. We think preservation of old things is important, at the same time, we like new and fresh things as the Ise Jingu demonstrates.  Probably, we have it in our DNA not to stick to the materials much and want to see beyond it.”

Disruptive Innovation and Japanese Business Conundrum

There are now a few theories emerging which identify an organizational DNA [8, 9, and 10] and its impact on business success.  These theories deal with how to identify the DNA and change it to meet the evolving business needs.  While each theory attempts to claim that their model identifies the patterns that have evolutionary advantage, one stands out.

According to the website of DNA Global Network Inc.,  [8] a management consulting firm in the Silicon Valley, a company’s DNA consists of four building blocks – Leadership, Strategy, Structure and Culture.  Leadership has the responsibility to define the strategy and align the structure and culture of the organization to shape the core DNA building blocks.  Evolution it seems, has defined a set of successful patterns for each building block.  Every organization either by choice or happenstance evolves by following a path where they define the core DNA that determines their success or failure.  Leadership’s ability to shape the strategy, culture and structure determines their destiny.  The right alignment of strategy, culture and structure results in creating the value to all stake holders and a sustainable organization.

Various components of the building blocks they discuss in their website are shown in Table 2.  The claim is that certain patterns formed by a combination of these components are more successful than other combinations.

Figure 1 shows my attempt to understand the relationship patterns of the key components in the three building blocks that they claim (on their website) have proven to be successful in today’s business environment:

An organization’s DNA perceived by its customers, R&D experts, Product business units and operational groups can be measured using appropriate surveys to create clear patterns.

If this is the case, using these patterns, we can examine various companies on how close they are to the winning patterns.  Notice that the strategies have to be matched with right culture and structure to gain evolutionary advantage.  For example, a control culture to create disruptive innovation may not be ideal.  On the other hand, a control culture may be just what the doctor ordered for achieving operational excellence.  Similarly, we know that a hierarchical structure works well to achieve operational excellence whereas a matrix style works well in establishing product leadership with cross-functional coordination.

It would be very interesting to analyze individual Japanese company’s DNA and identify its current state.  If we represent each component with a color green if the organization measures high, yellow if it measures medium and red when it measures low, we can depict the DNA of an organization as a pie-chart.

The pie chart on the left shows a low scale on disruptive innovation, medium on cultivation culture and Program and functional matrix characteristics required to harness disruptive innovation.  The pie chart on the right shows a market leader with a well-balanced strategy.  Similar analysis can be performed on various component relationships.

Another way of describing the DNA-print of successful strategies is shown in Figure 3:

Different organizational DNA is required to execute a different strategy and successful companies either develop these organizations within or collaborate with others who have complementary DNA to successfully compete in the market place.  Examples of successful companies with disruptive innovation as part of their core DNA are Apple and Intel.  What would be the patterns for Japanese Companies?  How are they different from other world-class companies?  Given the differences in these patterns, can one company organize itself to create different groups with ideal patterns to deliver on all four strategies?

Twenty years ago, I concluded (in a thesis submitted as JMP-17 student at JAIMS, Japan American Institute of Management Science, Hawaii and Sophia University, Tokyo) that the Japanese companies were good at incorporating innovative technologies that are borrowed from US in hardware but were not so adept in borrowing innovation in software [11 and 12].  With the advent of Chinese and Indian competition in borrowing innovation (both in hardware and software domains which was virtually absent twenty years ago) the pressure is now on to adopt disruptive innovation in both hardware and software to differentiate.  Will Japanese companies step up to this challenge or embrace mediocrity while watching China and India surpass them in borrowing and improving innovation.  The economics of communication, collaboration and commerce at the speed of light levels the playing field in product leadership, operational excellence and customer intimacy, and China and India will no longer be Japan’s customers.  They will be more Japan’s competitors to become number One; After all, there is room at the top for only one number One.  As every one starts to battle in establishing product leadership, operational excellence and customer intimacy using same technologies that get commoditized, only choice open for nations to be number one is to bring disruptive innovation to differentiate.  Time and again, evolution has proven that architectural simplification through disruptive innovation brings orders of magnitude productivity. Life forms survive and thrive by changing their DNA and adopting to external changes.  Will the differentiation in the future come from organizing yourself to excel in disruptive innovation?  What are the limits?

This is the subject of my current research and I would like any one with appropriate insights to participate.  I am interested in listening to what the Japanese business leaders today will say about these observations.  Twenty years ago, I concluded my thesis with these remarks. “The differences in approach from hardware and software are large enough at this time, that it will be difficult to gain the competitive advantage in software as in hardware. The management is well aware of this situation and will be looking in the future to rectify it. For example the new president of Fujitsu Mr. Tadashi Sekizawa (who will start his term in June 1990) has recognized the importance of software and his motto for the future is ‘Sofuto de rieki wo koujou’ (Kogyo Shinbun, 1990).”  However, history has proven that changing at least one company’s culture in Japan was not so easy and the focus of the company still remains on hardware.   The profits from software are still elusive.  May be it is time for Japanese companies to adopt the tradition of the twenty year renewal “shikinen sengu.”  Toki wa ima.


[1] A. C. Scott, “The Kabuki Theater of Japan”, The Dover Edition, Published 1999

[2] http://goliath.ecnext.com/coms2/gi_0199-11032193/Why-Japan-can-t-lead.html

[3] http://www.irishtimes.com/newspaper/breaking/2010/0816/breaking7.html

[4] 2009 World Economic Outlook Database-October 2010, International Monetary Fund.  Accessed on October 6, 2010. (reproduced from Wikipedia)

[5] Bunraku, Toyota Quality Woes, Japanese Hardware/Software Prowess and Management Lessons

[6] Lyne, Jack. “Fujitsu PC Corp. CEO Akio Hanada: Coming to America . . .And Just about Everywhere Else” 1996,  http://www.developmentalliance.com/docu/pdf/43354.pdf

[7] http://www.yamasa.org/japan/english/destinations/mie/ise.html

[8] http://www.dnaglobalnetwork.com/

[9] http://www.orgdna.com/

[10] http://www.boozallen.com/consulting-services/organization-strategy/mission-dna/about-mission-dna/organization-types-mission-dna

[11] https://mikkilineni.wordpress.com

[12] Current Issues in Japanese Management – A Second Look – “Is Japanese Software Thrust As Powerful As Their Hardware Thrust? Or Does It Really Matter Anymore?”



Bunraku and the Harmony of Collaboration

If art tends to exaggerate the gestures, emotion and the intensity of feeling to capture the attention of its audience, to focus it on the point of artist’s expression, then Japanese Bunraku takes exaggeration to new heights by combing the collectivism of three artists and one specially crafted puppet.

According to the Wikipedia entry [1], “The main puppeteer, the omozukai, uses his right hand to control the right hand of the puppet. The left puppeteer, known as the hidarizukai or sashizukai, depending of the tradition of the troupe, manipulates the left hand of the puppet with his own right hand by means of a control rod that extends back from the elbow of the puppet. A third puppeteer, the ashizukai, operates the feet and legs. Puppeteers begin their training by operating the feet, then move onto the left hand, before being able to train as the main puppeteer. This process can take 30 years to progress.”

The end-result is a harmonic blend of fluid movement of the puppets, words of the off-stage readers, and the shamisen music from the highly accomplished players.  I had read that the puppet masters are so skillful that the audiences soon forget their presence [2], but I was not prepared for the surprise when I saw a live performance in Tokyo twenty years ago.  The exaggerated movements of the eyes, eyebrows, mouth, hands and fingers in stylized gestures create a heightened sense of reality in which the puppet and the puppeteers become one and the words and the music blend with the scene to transport the viewer into a surreal world of exquisite emotions dealing with ninjo and giri  [3].  Ninjo refers to raw human feelings or human nature not influenced by cultural norms or obligations.  Giri represents individual’s obligation to others based on inter-personal give and take relationships.  Social harmony that is the essence of collectivism is promoted by encouraging giri to supersede ninjo when a conflict occurs between an individual’s feelings and obligations to others.  The themes of Bunraku capture vividly the conflict between one’s human emotions (such as love, compassion, greed, revenge, jealousy, and anger) and one’s obligations to others in the group.  Ninjo is the equivalent of the Keynesian concept “animal spirits” [4] whereas giri represents regulation and control whether it originates from within the self or imposed from outside.

While the older generation of Japanese nostalgically lament the loss of Tokugawa era values with western influence and the emphasis on individualism, some of the younger generation, dismiss Giri and Ninjo as old feudal concepts that are no longer relevant.   Twenty years ago, a  Japanese colleague from Fujitsu, who came to see Bunraku with me, admitted that it was her first time to see Bunraku live, and was very pleasantly surprised at the impact the performance had on the viewers.  In any case, content aside, the practice and performance of the puppeteers and the puppets of Bunraku display exquisite motions and emotions that capture the attention of the audience.  The perfect timing of the three puppeteers making the emotions come alive such as a woman sobbing with a handkerchief, a villain displaying astonishment, fury and anger using eyebrows, takes years of practice and dedication.  The institutional knowledge is preserved in the continuation of the practice of the art through the support of National Theaters.  The Japanese government recognizes the dedication and sacrifice of the practitioners by giving the title “living national treasures” to the masters under Japan’s program for preserving its culture, harmony and the power of institutional knowledge.

Toyota Quality Woes

The Bunraku masters depict a culture that values the importance of the human element, synergy of the group, cross-functional coordination through intimate communication, patience, and a balance between individualism and collectivism with a bias toward collectivism.  These values also were carried into social, political and business culture and formed the foundation for the Japanese uniqueness that served them well in becoming the number two global economy.

Twenty years ago, when I was doing research for my master’s thesis at Sophia University, Tokyo, on the subject “Is Japanese Software Thrust as powerful as their Hardware Thrust?”, I was surprised at the role the cultural traits played and equally surprised at the recognition of their importance by the senior Japanese management that I interviewed.  All of them agreed with my conclusions summarized in Table 1 [5].

Two of these traits were taken to new heights by Toyota and other Japanese companies in their manufacturing process.  Quest for constant process refinement led to the perfection of Quality Function Deployment and House of Quality.  Toyota also used end-to-end information management to track various components that are part of an automobile from cradle to grave.  They used it in their testing processes.  They used it to track their automobile whereabouts globally and knew when they were due for maintenance etc.

The Toyota Way is summarized by Jeffrey K Liker [6] and has been discussed extensively by many others:

  1. Having a long-term philosophy that drives a long-term approach to building a learning organization
  2. The right process will produce the right results
  3. Add value to the organization by developing its people and partners and
  4. Continuously solving root problems to drive organizational learning

“I learn all the time, but I don’t think I’ll finish developing as a human being.  One of my main functions now is growing other Americans to follow that path.  They call it the DNA of Toyota, the Toyota Way and TPS – they are all just very integrated.”  With this statement, Gary Convis [7], the first American president of Toyota sounds more like a Bunraku master than an American business executive.

So, where did Toyota go wrong?  How could a company with such passion for quality and end-to-end information management make so many mistakes in identifying and reacting to its recent quality issues?  We can get some clues from the statements of Akio Toyoda [8]

“I have been considering the rapid growth in our manufacturing and marketing operations. And I have been eager to keep management decision-making close to our customers. We need to be where we can hear directly from our customers. That will enable us to incorporate customer feedback swiftly in research and development and, as necessary, in hands-on measures in the marketplace, including product recalls.

“In the past few months, our customers have started to feel uncertain about the safety of Toyota’s vehicles.” He says he takes “full responsibility” for that fact and goes on to blame the company’s problem on its decision to pursue growth too aggressively.

“Toyota has, for the past few years, been expanding its business rapidly”

“Quite frankly, I fear the pace at which we have grown may have been too quick.”

Toyoda says the company’s priority — which he said is ‘put safety first’ — “became confused, and we were not able to stop, think, and make improvements as much as we were able to before, and our basic stance to listen to customers’ voices to make better products has weakened somewhat.”

“We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that,”.

“I regret that this has resulted in the safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced.” [9]

Three factors seem to have played a role:

  1. Global expansion coupled with a cultural incongruence between Japanese emphasis on the “Way” and the  western tendency toward “profit at any cost” individualism have resulted in what Toyoda called the inability to “develop the people and the organization” to meet the fast growth rates demanded by short-term profit motives with same quality.
  2. End-to-end information management systems seem to have not kept up pace with global growth and the result is a communication failure between those who are close to their customer and those involved in Research & Development.
  3. A third factor, that is not so clear-cut, is the increasing role of software in the automobile itself.  As the automobiles have become more software dependent to control the efficiency and performance, software innovation, its development process and its quality control play an ever-increasing role in the overall quality of the automobile.  In the past, the cultural traits that have served well in developing Japanese hardware prowess were not utilized so well in developing the software prowess.  Twenty years ago, Japanese engineers and their management were slow in bringing innovation in software technologies into their products and were not able to deal with the fluidity of software requirements.

Japanese Hardware/Software Prowess

“The differences in approach from hardware and software are large enough at this time, that it will be difficult to gain the competitive advantage in software as in hardware. The management is well aware of this situation and will be looking in the future to rectify it. For example the new president of Fujitsu Mr. Tadashi Sekizawa (who will start his term in June 1990) has recognized the importance of software and his motto for the future is ‘Sofuto de rieki wo koujou’ (Kogyo Shinbun, 1990).” [5]

With this remark, almost twenty years ago, I concluded (in my thesis submitted as JMP-17 student at JAIMS, Japan American Institute of Management Science, Hawaii and Sophia University, Tokyo) that the Japanese business leaders in general and Fujitsu top managers in particular were poising themselves to play a bigger role in global software market.

Twenty years is a long time.  The role of software has increased in every aspect of human life.  Today, we communicate, collaborate and engage in commerce at the speed of light with myriad software systems helping us.  Automobiles today have more software controlling them than the humans who drive them.  Cultural traits have changed along with globalization and commerce at the speed of light.  Space and time boundaries have blurred.  Japanese companies today are  influenced heavily by western risk addicted, “profit at any cost”, business executives.  Sony is no longer a technology innovation company. It has transformed itself to being a risky entertainment company managed by a western executive.  Increasingly, western business practices have changed the global Japanese companies.  Global competition for market share in a crowded automobile market and a stock market which, measures share holder value by the minute through a casino like trading operation, force rapid growth at any cost.

Management Lessons

From Toyoda’s testimony, Gary Convis’s passion and beliefs seem to be different from those of Toyota’s management in charge of operations today.  Obviously, Gary Convis was not successful in passing on the mastery to his successors like the Bunraku masters were.  What is the role of cultural traits today in business management?  Have globalization and the quest for communication, collaboration and commerce at the speed of light normalized the cultural values across the globe?  Is there still a difference between Japanese hardware and software prowess today?  This is the topic of my research and I invite anyone with appropriate insight to participate in an update to my thesis of almost twenty years ago.

Despite controversy, extensive data gathered by Geert Hofstede [10] still is valuable in gaining some insights into the role of cultural dimensions.

In my recent discussions with some of the Japanese senior managers from large IT infrastructure companies in Japan, most people agreed with the three observations highlighted in the figure above.  If these hold true with a larger sample, how will these observations translate into management lessons in a global context where space and time boundaries are being blurred?  Are these cultural dimensions important in understanding the nature of Indian and Chinese business practices?  Will they explain why many high-profile American business managers and investors preferred selling dubious financial instruments to unsuspecting Icelanders instead of building energy-concious automobiles?  Will they explain the lack of corporate conscience or perhaps the corporate schizophrenia of drug companies like Pfizer which results in knowingly marketing drugs like Baxter and Cerebrex while at the same time introducing other miracle cures? Food for thought!

A more interesting correlation between GDP of a nation and the Hofstede cultural dimensions is shown in the figure below:

GDP of a nation and its cultural dimensionsThe correlation between Per Capita GDP and the cultural dimensions is very revealing as shown here:

One can draw one’s own conclusion.


[1] http://en.wikipedia.org/wiki/Bunraku

[2] Donald Keene, Keizō Kaneko, “Nō ; and, Bunraku: two forms of Japanese theatre”, Columbia University Press, Morningside Edition, 1990

[3]  Shmuel Noah Eisenstadt, “Japanese Civilization: a Comparative View”. University of Chicago Press, 1995, p 341

[4]  George Akerlof and Robert J. Schiller, “Animal Spirits: How human Psychology Drives the Economy and Why it Matters For Global Capitalism”, Princeton University Press, 2009

[5] Rao Mikkilineni, Masters Thesis, Japan American Institute of Management Science and Sophia University, 1990

[6] Jeffrey K Liker, “The Toyota Way”, McGraw-Hi9ll, 2004

[7] Jeffrey K Liker, “The Toyota Way”, McGraw-Hi9ll, 2004, p175

[8] Akio Toyoda, http://pressroom.toyota.com/pr/tms/toyota-motor-corporation-press-153969.aspx – Toyota Motor Corporation Press Conference Addressing Quality-Related Matters , Tokyo, Japan, February 17, 2010

[9] Akio Toyoda, Congressional hearing: http://www.cbsnews.com/8301-503544_162-6235105-503544.html

[10] : http://www.geert-hofstede.com/hofstede


Japanese have adopted the process of mastery from cultural spheres such as Zen, Imperial traditions and the ritualistic roots of agrarian artisanship and the Japanese management has institutionalized the adoption of innovation and skill through their own unique technology transfer process.  Their process has worked well during the boom eras of the 80s and 90s.  However, the advent of globalization “at the speed of light”, fostered by the Internet, has changed the dynamics of technology innovation, transfer, and operation.  Businesses and mass-market consumers both have become accustomed to real-time access to information, and analysis to react to fast changing global events.  They are demanding low latency process implementations and tolerate responses only limited by the finite velocity of light.  The complexity is compounded by the unpredictable demand for any particular service in the mass market.  This is creating a demand for new processes to eliminate current human latency involved in information service creation, assurance and delivery.  While this creates a radical departure from current best practices of Japanese management, this blog suggests that it is also an opportunity to address the impact of dwindling human resources caused by low birth rates and aging population in Japan.

Over time, skill development, its mastery and transfer processes have changed radically from focusing on the individual as practiced by the sushi chefs and sumo wrestlers to collectivism and global collaboration at the speed of light.  By re-architecting new processes for technology innovation, transfer and operation teams on a global scale, Japanese management can leverage their investment capital and human network management expertise based on their emphasis on collectivism and Kyozon Kyoei (growing together).  This requires changing current models to adapt globalization at the speed of light and create multi-cultural and multi-national teams collaborating with each other in real-time.  This requires breaking the sequential water-fall model of innovation, technology transfer, and operation processes and adapt an iterative collaboration between innovators, technology transfer agents, and operators.  Is the current Japanese Management ready for such a transformation?  This is the theme of my study as a sequel to my thesis published in 1990 on current issues in Japanese management. I am looking for input, comments, and collaboration. I invite anyone with appropriate insight to participate.

The Art of Sushi and the Mastery of the Individual

Every Saturday, during my stay in Japan during late 1990’s, I was eagerly looking forward to my lunch in a small neighborhood sushi-ya.  It had become a routine.  Over time, the sushi master knew what I liked and what I did not.  He knew what I should drink with which food.  While I enjoyed the tasty morsels of fresh raw fish with uniquely Japanese vinegar rice, it was pure theater watching him and his two apprentices work.  During my lunch, he taught me about the uniqueness of Japanese rice.  He talked about how each region in Japan has its own brand of rice and sake and the subtle differences they claim.  It was a small shop with six seats very neatly organized at the counter.  The mistress of the shop was busy tending to the customers, pouring drinks, always making sure to avoid eye contact and profusely apologizing for almost everything.  The apprentices were almost invisible tending to their chores.  The customers knew the master’s skill and were his regulars.  One of the apprentices was his son.  The master’s dream was to transfer his skills so that one day his son would be in his place and will command the same respect.

In Japanese culture, making sushi is regarded as an art, because the sushi master’s “way” (Ryuugi) is as important as resulting sushi’s appearance, its presentation and its taste.  Also equally important is how one eats it and what one drinks with it.  The sushi master, as Frans de Wall suggests, [1] “epitomizes human sophistication, artistry and know-how.  We eat the fugu (the blowfish sushi) trusting the chef’s skills, which he learned from other chefs, and they in turn from those before them”.

In the tradition of Japanese Zen Masters, the sushi chef transfers the “way” to his student in a uniquely “Japanese process”.  There are no women sushi chefs in Japan at least to my knowledge.  A friend told me (Frans de Wall also mentions this in his book) that woman’s hands are too warm for the task.   However, Frans also points out in his book, that the women make sushi at home and the men have no qualms about eating it.

The student for his part dedicates about ten years of his life with unquestioned devotion to mastering the subtle skills.  As Frans describes it, “(the student’s) education seems a matter of passive observation.  The young man cleans the dishes, mops the kitchen floor, bows to the clients, fetches the ingredients, and in the meantime follows from the corner of his eyes, without ever asking a question, everything the sushi masters are doing.  For no less than three years, he watches them without being allowed to make the actual sushi for the patrons of the restaurant – an extreme case of exposure without practice.  He is waiting for the day on which he will be invited to make his first sushi”

Two characteristics of the ‘would-be’ sushi master stand out.  First is the inner passion “to master the art of sushi” and become the best there is.  It is not driven by the hope of a monetary reward.  Instead, it is driven by the recognition of the challenge involved, and a strong will to devote a significant amount of his time while postponing near-term gratification.  The second is the unquestioned faith in the master based on a deep respect for the master’s skill.  In a collective culture, these traits are considered virtues whereas in a society where individualism and immediate gratification play a significant role, they may be viewed as a waste of time and unwarranted.  Whether they are virtues or not clearly depends on the context and the value of time and the resources available to the group.

The master on the other hand is looking for a disciple who will carry forward the art and the skill, who will spread the satisfaction of enjoyable sushi to customers beyond his reach.  It is in the teacher’s interest to scale but without compromising quality in favor of quantity. His reputation depends on the quality of his disciples.  He submits the would-be disciples to rigorous tests to baseline their skill and tailors the training to meet their individual need.

Clearly, optimal technology transfer takes place from a willing giver to an enthusiastic receiver and another great sushi master will emerge.

The Ritual of Sumo and the Mastery of the Individual in a Group

Process is an important part of the way of life in Japan.  Similar to the Zen emphasis on the “means” and not the “end”, the Japanese culture has adopted process emphasis to develop a collective approach.  The process compensates for the frailty of the individual, showing up as greed, anger and selfishness that may affect the welfare of the whole group.  The process deals with the potential human failings by using objective measurements, analysis and corrective action that advance the goals of the group both in everyday life and in business.

Ritual is often, used to standardize a process.  Rituals define the protocols of behavior.  A ritual creates a bond of camaraderie that results from the deep knowledge of the substance behind the subtle form (or style) of ritual practice.  For the outsider, the practice of ritual may look pointless and a waste of time but the insider feels the satisfaction of discerning the substance behind the subtle form of ritual practice.  When an American friend complained that the Tea Ceremony, that we attended, was too long, my Japanese friend’s reply was “the Tea Ceremony is not about tea.  If we want a quick tea, we visit a local tea shop or a vending machine, and if we want an overpriced tea, we visit Starbucks!”

Sumo captures the essence of Japanese effort to combine process and ritual to create a unique sport.  Dolores Martinez [2] describes the origins of sumo rituals; “Sumo match seems to have two origins: one is in rural villages, the other in court performances.”  According to her, village sumo was enjoyed as a part of the seasonal ritual at the village shrine as a part of celebrating the completion of a harvest.  It was one of the competitive sports along with tug-of-war and archery.  A Korean prince and his thirty wrestlers who were exiled to Japan have introduced the court performance part of the ritual.  “In sumo there are forty-eight ways in which the match can be won.  The performance of sumo is identified with the image of a god playing in the ring, but the deity can only be manifested in the body of the rikishi (wrestler), at the moment of winning, if the win is correctly performed.  An experienced spectator enjoys the style (kata) of performance at the very moment of winning.  It is the kata which is the ultimate concern of sumo.”  That is why the yokozuna performs the most essential kata during the first ritual of the day of “entering the ring”.  It is believed to bring cosmic energy into the ring.

According to Mark Willacy [3], who followed a sumo stable in Tokyo for a few months, “sumo isn’t just a sport; it’s a ritual and tradition”.  Like the would-be sushi master, the would-be sumo rikishi devotes his time staying in a sumo stable learning the “way” hoping to become a yokozuna (the grand champion). Mark Willacy observes, “Senior sumo wrestlers, have the privilege of being the teachers.  Junior wrestlers coddle them, wait on them and feed them. Life for these youngsters is tough. Often up before dawn, their job is to sweep the ring, get pummeled at practice, prepare tubs of food after practice, serve the breakfast, wash-up, do the laundry, and get the groceries.”  They endure the rigor in the hope of becoming a grand master one day.

The Process of Mastery and Technology Transfer Cycle-time

Mastery and the transfer of skills from the master to the disciple require dedication, and patience.  Both the sushi chef and the sumo wrestler exemplify individual mastery in a collective society and associated human latency in technology transfer.  However, the time and resource constraints along with the differing skill levels of the disciples in a group setting require a new approach to the technology transfer in order to scale.  The process of acquiring mastery itself has been thoroughly analyzed and the roles of the teacher and the disciple have been identified to facilitate optimal technology transfer in a group setting where constraints of time and resources are compounded by the wide variation of skill level of the group learning the skills from a master.

According to a monk, with whom I had discussions on the subject of learning, (when I was visiting a famous temple in Koya San), learning has four distinct phases:

  1. Discovery:  the master assesses the would-be disciple to create a baseline from which to start the training.  He sets both short term and long-term goals taking into account external and individual factors.  He facilitates the discovery of knowledge by the disciple.  According to the Monk, knowledge seeking is a self-discovery process and the teacher can only facilitate the discovery process.
  2. Reflection: The student spends time deeply reflecting on the discovery.  This is the most difficult part of the process where struggle to connect the dots, resolving conflicts between appearances and reality and the past and the present continues till that moment of clarity appears.  The resulting “Aha” moment prepares the student with a mental model of what is learned so that he can apply it to the real world and test his understanding.
  3. Application:  The student starts to apply the knowledge to test his understanding and getting feedback from outside to improve his/her mental model.  With practice, he becomes better and starts the next phase.
  4. Teaching:  As the disciple starts to bloom and become the new master, he will start teaching which allows him to facilitate the discovery process to his students.  At this stage, the teacher himself becomes a student continually pushing the boundaries of his own knowledge.  The teaching, the monk says, is the “way” to discover one’s own ignorance and reflect upon it and the cycle begins where the teacher himself becomes the student.

Figure 1 shows the process of learning or acquiring mastery. zen of learning

I thought this was a very interesting way to define the process of learning and I have used this model when I was teaching at Golden Gate University with very good results.  Figure 2 is an application of this process with some product and process metrics, which, I designed, to measure success of the theory in a classroom setting where a large number of students with different levels of preparation and baselines come to learn a specific set of skills in a given period of time.  Unlike a Zen master and his disciple, a classroom teacher has deadlines and students have time and resource constraints.

masteryThe process of mastery in a classroom is a walk on a thin line between student’s anxiety and boredom.  Each student comes to the class with a set of skills (pre-requisites).  If the students do not have the required prerequisite skills, the teacher has to give special assignments to them to make up for the lack of prerequisites or ask them to come back when they are ready.  If the students are overqualified, the teacher must find ways to challenge their skills to keep them interested.  If the student skills are not challenged enough, the student gets bored.  On the other hand, if the student skills are not adequate to meet the challenges posed in teaching, it leads to student’s anxiety, which may lead to eventual quitting.

A skilled master will attempt to balance the student’s acquisition of skills and the challenges presented to reach the objectives taking into account the teaching goals, external factors, and human factors.  The assignments, exercises, and skill tests are all designed to monitor and optimize the process and the outcome.

The students for their parts, will progress by acquiring new skills and testing them with the appropriate level of challenge while avoiding excessive boredom or anxiety.

In my class, I started with a baseline quiz that gave questions consisting of both the prerequisites and what they would learn in the class.  The result gave a good assessment of the skill level of each student.  Based on this result, I gave customized assignments that used higher skilled students to share their knowledge in discussions in the class.  For those with inadequate prerequisites, I gave special make up assignments.  I facilitated the discovery and reflection phases by giving reading assignments, discussions, tests and lectures.  Every student is required to apply the knowledge by writing a paper and present the learning at the end of the course.  This presentation allowed them to teach their learning to the class and the class by asking questions facilitated the discovery process for the presenter.

The process metrics are designed to provide them feedback on their discovery, reflection, application and teaching process. The product metrics measured their understanding of the subject based on their application of the knowledge to finish the paper assigned.

This discussion illustrates the complexity of technology transfer process, which is further affected by the limitations of time and resources.  A Zen master’s time scale spans across multiple reincarnations.  Self-imposed isolation of the group from real world reduces external constraints.  However, the technology transfer process for most Zen masters usually is limited to only one lifetime.

The Dark Side of Process & Ritual – Entropy Management

Entropy is a measure of randomness or uncertainty in a system and left to its own device, the entropy of a closed system always increases.   Process and ritual attempt to manage entropy; process by implementing measurement, analysis, and intervention; the ritual by following the “rules of practice” derived from experience and encapsulated in tradition.

However, both have their limitations.  Implementing a process takes time and resources.  Process is only as good as the measurements it relies upon.  The measurements are only as good as the systems that provide them.  Making people believe in a ritual takes effort.  The ritual is only as good as the experience it encapsulates as “rules of the ritual”.  They are both affected by the human element with all its frailty and shortcomings.  The literature extensively has documented the subversion of processes by individuals and groups [4].  Despite sumo’s popularity, most people in Japan still do not know how the wrestlers make their money, and how that money is distributed.  This has led to some accusations against the Japan sumo association.   Similarly, business processes in corporations and the government may be well defined but in reality, people circumvent them using personal relationships thus undermining the original purpose of the process.  This has often resulted in crony capitalism that favors one group from the other or one individual from the other.

Transparency and timely access to information are essential to improve process effectiveness in both personal and business life.  This is creating a need for real-time information systems.

Globalization at the Speed of Light and the Drive for Real-time Information Processing

With the advent of the industrial revolution, access to information and resources was made available across the globe through transportation networks and the resulting mobility.  The power grids, and other utility networks enhanced efficiency of resource consumption through sharing.  Communication networks improved global communications, allowed human networking across the globe, and facilitated information access.  The new global human networks made it possible to transfer technology from where it was invented to where it can be used.  The latency caused by the human factors dictated the speed of technology transfer.

The velocity of information took a leap forward with the advent of the Internet and high bandwidth networks.  Businesses became global demanding instant response transcending space and time.  Moore’s law speeded up information processing and business workflow implementation.  Social networks exploded across the globe demanding immediate attention reducing the attention span of individuals to twitter chat of 140 characters or less.  Data mining websites have created a new level of urgency to respond to the explosion of both relevant data and unproductive noise.

The acceleration of technology transfer is evident when you examine how long it took various networking solutions to mature.  The telecommunications network matured during a period of a hundred years.  It took about 30 years for the Internet to mature.   It took about 15 years for Storage Area Networks and mobile networks to mature. It now takes only months to develop a business application and deploy it.  It takes only days and weeks to develop a web based consumer application and deploy it.

However, globalization at the speed of light also has introduced an uncertainty in the demand fluctuations.  The new constraints of time and resources demanded by instant response with unpredictable and wild fluctuations have started changing the dynamics of technology innovation, transfer and operation.

Japan and its Technology Transfer Conundrum

Both the industrial revolution and the information revolution have altered the technology innovation, transfer and operation by making them capital hungry, human resource intensive and time sensitive.   Isolated masters no longer can play key roles  in innovation and technology transfer because their success requires collaboration between multiple disciplines with both technology and its management playing equally important roles.  Mastery is institutionalized, requiring investment of capital, human resources, and compliance with legal, regulatory and cultural constraints of the nations in which they operate.

If a conundrum denotes an intricate and difficult problem, technology transfer in Japan is surely a major conundrum for two reasons:

  1. The graying of Japan coupled with low birth rates, and strict immigration policies, is shrinking the pool of available masters and would-be disciples.  In a technology transfer model that depends on human element, dwindling human resource becomes a major issue.
  2. Globalization along with the accelerated pace with which innovation is occurring and changes are propagating is putting strain on the old-school, ritualistic, process intensive  and time consuming technology transfer approaches of the past.

In the past, Japan consciously chose to optimize its limited space in the island nation by trading off time.  Just-in-time supply management is a good example.  They traded the limited shelf space to just-in-time arrival of the inventory using the transport networks.  The success ofcourse depends on the latency and bandwidth of the transport network and the end-to-end process management.  Collectivism allowed sharing and optimizing limited resources with collective goals developed through consensus.  They traded off time in allowing the consensus process to take its course.  That is the reason why it takes a long time to make a decision in Japanese society, which frustrates the outsiders who guard their time preciously.

Japan also chose to send technology scouts to Europe and USA, imported innovation, and adopted it to fit uniquely the Japanese culture.  It also leveraged its process innovation and collectivism to focus on manufacturing high quality products for export.  The technology transfer process took about two years to bring it in and customize it to fit uniquely Japanese needs.  It took another couple of years to package the Japanese products to meet export requirements.

As information technologies move from hardware to software through virtualization technology, and as globalization at the speed of light demands faster response to meet wildly fluctuating consumer needs, Japan is no longer able to compete in the world of fast-paced technology transfer.  To leverage innovations that occur globally (this becomes even more critical as the domestic resource pool of innovation decreases and is not replenished by liberalization of immigration as in the US), the technology transfer has to occur at a more rapid pace.  In addition, other countries such as China, Vietnam and India, which Japan is counting on exporting technology and engage in outsourcing, are not going to wait when they can go directly to the source cutting out the Japanese middle layer overhead and reducing technology transfer time.

This is already occurring, as India and China directly are becoming competitors to Japanese technology.  In a global economy operating at the speed of light, outsourcing as a way to extend a country’s borders as Japan is doing with outsourcing to China, India and Vietnam will not be sustainable in the long term.  The outsourced countries will eventually become equal partners in developing innovation and demand equal shares of the profits.  In the long run, there is no reason why a Vietnamese engineer is paid a lower wage for equal work than a Japanese engineer in Japan is.  The days of colonialism, in any form, are over, in a world that is globalizing at the speed of light.

Unless, Japan addresses the speed of innovation and technology transfer by rapidly adapting to the imminent changes, it may not be long before it loses its current place in the world economy as number two.  The information technologies are increasingly becoming software intensive because of virtualization.  Computing clouds with pools of virtual computing power provide rapid cycle time reduction in business and consumer service creation, assurance and delivery.   It will fundamentally alter the way new services are created, assured and delivered in the future.

Global Kyozon Kyoei and Technology Innovation, Transfer and Operation at the Speed of Light

An alternative is to use Japan’s  investment capital and its human network management skills and Kyozon Kyoei expertise to create collaborative groups that are equal partners in technology creation, transfer and operation and share the benefits.  This requires creating teams of global technologists, managers, marketing and operations experts consisting of US, Japan, and the other Asian countries as equal partners.  In fact, the Asian countries that are not yet well developed have shown aggressive adoption of new technologies to give them a differentiation whereas well developed countries are saddled by their existing investments in older technologies and processes that are hard to change.

Such a global collaborative team will bring the best of their core competencies and resources (institutional and individual knowledge, capital, technology labs, human resources etc.) and create a continuous cycle of innovation, transfer and operation taking advantage of globalization at the speed of light.

Is the current Japanese management ready to think global again just as they did in the 80’s and 90’s when Fujitsu, NEC and Hitachi established leadership in telecommunications infrastructure and supercomputing.  In the past, they imported technology, added value to it and exported it.  They also started innovation with their first Broadband switch.  In the future, globalization at the speed of light will demand real-time information systems and mandate emphasis on collaboration with equal participation to bring the best of breed global teams and share the benefits.  The response involves rethinking current concepts of transfer price, involving global infrastructure providers, global service creators, global service providers and global service users and creating globally networked teams collaborating at the speed of light.  It means current large corporations rethinking their current strategies to reduce IT complexity by eliminating layers of management systems, and human latency involved.  It means redesigning systems to eliminate current  product strategies that force labor intensive services on their customers to generate recurring revenues.  It means global collaboration with equal pay for equal work independent of physical location, national boundary or cultural difference.  It means blending the best of individualism and the best of collectivism and instituting new global processes with transparency to guard against the frailty of the individual harming the group or preventing the monopoly of one group at the expense of other groups.

 References Used:

[1] Frans de Wall, “The Ape and the Sushi Master: Cultural Reflections of a Primatologist”, Basic Books, 2001, p 23

[2] Yamaguchi Masao, “Sumo in the popular culture of contemporary Japan”, The Worlds of Japanese Popular Culture, edited by Dolores P Martinez, Cambridge University Press, 1998, p 19

[3] http://www.abc.net.au/news/stories/2009/03/29/2529052.htm

[4] An excellent discussion of lack of transparency and resulting issues with sumo is presented by  Mark D. West, “ Law in Everyday in Japan: sex, sumo, suicides and statutes”, University of Chicago Press, 2005, p57
stats for wordpress

 The moon glows the same:

It is the drifting cloud forms

Make it seem to change.

Attributed to a Japanese Priest [1]




Hot Springs and Hadaka no Tsukiai

Most memorable part of doing business in Japan during early 1990 was engaging in a heated discussion on the future of Japanese software industry while moon gazing in a very hot rotenburo (an outdoor hot spring)  in Kusatsu, with some Japanese colleagues,  and, drinking warm sake on a cold winter night.  The discussion was about a thesis that the Japanese manufacturing prowess will catapult Japanese companies into leadership in software.  While process innovation and human network management in a factory approach has helped develop, with high efficiency, a host of software such as compilers, databases and telecommunication software where standards are well developed, Japanese management had difficulty in rapidly adopting new innovations such as object oriented programming and graphical user interfaces.  Some of my Japanese colleagues wanted to find ways to transfer software innovations faster as they did with hardware innovations. Later this would translate into Japanese foray into object databases, video service networks and service management systems with 3D graphical user interfaces and so on.

Tsuki mi (moon gazing), Onsen (hot springs) and collectivism in Japan are closely woven into the fabric of Japanese culture. According to Scott Clark [2] “Japanese have transformed what was once considered a mundane though important and pleasurable practice into an expression of Japaneseness and tradition.  The bath and bathing are today both a familiar daily practice and an act of exoticism, the transformation of the ordinary into the extraordinary in a reflexive discourse on being Japanese.”  Japanese use sake and hot springs to build individual and collective relationships.  As Kuniko Miyanaga describes [3] “In Japan, two strangers, when introduced, go and drink together as a means of investigating one another.  Using alcohol as an excuse, they become outspoken about themselves, ask questions of each other, and, in general, deviate, from normal etiquette, by “exposing their bare selves.”  This is called hadaka no tsukiai, or having a naked relationship without formality or social ornamentation.  In doing this, the two have entered into an extremely informal situation; an important social rule is that such drinking occasion remains separate from all other occasions.  The two people involved remember what has transpired during the drinking occasions, but they do not reveal this when they have returned to more formal settings.  The mutual exploration will continue on the next informal occasion, again by drinking together.  In this way, the process of building intimacy is accelerated.”

Hot springs have played an important role in Japanese business.   A hot spring hotel in Hakone called Hotel de Yama, in a picture post card setting with Mount Fuji and Lake Ashi in view from its beautiful gardens, became very famous in the year 1950 by being associated with Dr. Deming’s lecture given to almost 80% of Japanese business leaders during that period [4].  That historical event changed the course of management in Japan and the rest of the world through the Total Quality Management (TQM) movement that followed.  In the mid 1990s, when we were implementing TQM at US WEST to improve telecommunication business processes, I appreciated its far-reaching impact in shaping the culture and behavior of management itself.

De Yama Hotel

L’Hôtel donne sur le lac Ashi


The Hakone hot spring in Hotel de Yama hosted the most powerful hadaka no tsukiai of the century that changed the course of history.  According to Jerry Bowles, [5] “A more likely reason for Ichiro Ishikawa’s Deming dinner is that he wanted Japan’s new industrial leaders to hear, from this tall, loud, terrifying gaijin–a slightly derogatory word used to connote anyone who isn’t Japanese–what has been Deming’s central message for the past 60 years;  that they–management–were the problem, and that nothing would get better until they took personal responsibility for change. And on that score Deming delivered.”  Ichiro Ishikawa not only founded JUSE but also chaired Keidanren, the country’s largest trade association, which exerted great influence in post-war Japan.  Deming’s message to substitute educated human power to compensate for lack of access to raw materials was music to the Samurai business leaders attending Deming’s lecture.

An interesting email, in 2007, from Tedd Snyder from Wisconsin, [6] points out the irony of cultural changes in Japan since 1950.  He had hoped to see the actual location where Dr. Deming met with the Japanese leadership. Unfortunately, the hotel staff that he spoke with was unaware of this aspect of the hotel’s history.  Mr. Snyder was curious whether any pictures exist from Dr. Deming’s sessions at the Hotel de Yama.  I am sure the Union of Japanese Scientists and Engineers (JUSE), which organized the conference in Hakone has preserved the historical memorabilia but the significance seems to have been lost at the hot spring site.  I wonder if Deming and Ishikawa discussed the importance and the significance of that event during a hot bath. What were the discussions that followed the meeting during dinner conversations?  Whatever they were, the event had a significant impact not only on the Japanese economy but also on the rest of the world.

Current Issues in Management

The world is a different place today.  There is a debate on the role of management in both Japan and the US.  The deep and painful “Lost Decade” Japan endured and the recent Wall Street “Melt-down”, both have in common, the busted real-estate and stock bubbles resulting from management failure.  Collusion between government policy makers and big business interests, loose credit policies, lack of regulatory oversight from government bureaucrats and short term easy profit pressures from stock market gamblers have all fueled a move toward deep scrutiny of the role of free markets, managed economies, individualism, collectivism, private greed and public good.  With their cultural biases toward individualism and collectivism respectively, USA and Japan are reacting in different ways.

Japanese people reacting against the government policies, bureaucrats and status quo chose to throw the ruling government out.  The new government has promised to focus on people’s interest as opposed to the business interest. A recent article by DPJ leader Yukio Hatoyama sharply criticizes the U.S. business model for growth that Japan had emulated during the postwar period, and promises a Japan free of what he calls the “unrestrained market fundamentalism and financial capitalism, that are void of morals or moderation” to better protect the finances and livelihoods of the Japanese people.  As Japanese population is graying and the employee pool is decreasing, Japan has started to expand its borders through outsourcing. Japanese businesses are embracing outsourcing to India, China and Vietnam in very large scale.    As exports start decreasing, business focus is turning inward as opposed to global ambitions.  R&D efforts have drastically reduced which is in total contrast to the days when Japan believed in increasing R&D budgets during recession.  The mood in R&D labs, where institutional knowledge exists to meet the challenges of the new world, is very depressing unlike that which prevailed in the early 1990s.  Participation of Japanese engineers in international conferences is noticeably less compared to the 1990’s.

USA has reacted to the recent crisis by the government taking a more active role than ever before. There is also growing momentum toward retracting from large outsourcing forays and focusing on new green, healthcare and IT initiatives inside the US.  Businesses are taking minimal risk. Even the Venture Community, whose raison d’être is to focus on high potential, long-term ventures, are focusing more on short-term sure-shot revenue generating ideas. One VC in Silicon Valley pointed out that the VC community is frozen with fear focusing more on incremental less-risky solutions rather than long-term solutions with potential 10X opportunity even though they think that the idea will happen in the long term.

While the first and second largest economies are struggling with tighter resources, and figuring out better management strategies, the evolution of networking technologies from POTS (Plain Old Telephone System), Internet based PANS (Pretty Amazing New Services) [7], and SANs (Storage Area Networks) to “Computing Clouds” is presenting a unique opportunity to radically improve the next generation IT infrastructure.  It is a new technology opportunity that requires convergence of telecommunication Next Generation Network (NGN) and IT infrastructure. Such an infrastructure will fundamentally alter the way executable business workflows are globally designed, developed and distributed, and radically improve the service economies worldwide.  The scope of such transformation exceeds the TQM impact that Deming and Ishikawa facilitated at Hotel de Yama.

The purpose of my blogs, is to suggest that the Japanese management today is at crossroads, very similar to the situation when they faced Deming in 1950 in Hakone.  Today, they have the accumulated institutional knowledge that they have preserved from their forays into POTS, PANS and SANs. They are equipped with the human resources and experience to create convergent computing cloud infrastructure, which requires both NGN expertise and current IT infrastructure hardware and operating systems expertise.  For example, large companies such as Hitachi, Fujitsu and NEC have both telecommunications and IT R&D groups that they have preserved while such institutional knowledge has been dismantled in the US by free market forces.  Another advantage these companies have is their hardware, systems and  human network management expertise.  This is in contrast to US companies that are making headway in cloud computing today such as Amazon, Google and Microsoft, which are purely software companies.  History shows that networking technologies evolve with a combination of hardware and software technologies making tradeoffs to meet the requirements of massive scaling and global interoperability.  My analysis suggests that a paradigm shift with 10X improvement can be achieved with slight modifications to server and storage devices to replace the current system administration model with real-time dynamic device management.  With these modifications along with NGN switching and mediation concepts, the computing clouds will be able to provide massive scaling, global interoperability and telecom grade “trust”.

However, the cultural, political, and economic changes that have occurred since the days of Deming and Ishikawa are profound and I would like to pose the question “Is current Japanese management up to the challenge?”  Will they be able to break the organizational barriers between telecommunications, server, network and storage silos within the same company and develop the convergent architecture?  They failed to do so in the past in bringing their telecommunications and computer divisions to work together and successfully compete with Cisco’s foray into the telecommunication-grade router market.  Will Fujitsu, Hitachi and NEC be able to collaborate with each other and service providers such as NTT to create the required mediation and management interface standards for the convergent Computing Clouds?  Will the Kasumi ga Seki cloud project provide a good opportunity to create and test the ideas of convergence.  This is the theme of my study, as a sequel to my thesis published in 1990 on current issues in Japanese management. I am looking for input, comments, and collaboration. I invite anyone with appropriate insight to participate.

In order to understand the requirements to make a profound change beyond the current incremental approaches of the Silicon Valley VCs and established server, networking and storage vendors with their vested stakes in the status quo, we need to examine the history and the evolution of networking technologies.  We also must acknowledge the economic and political realities that drive management behavior.  As Deming and Ishikawa, demonstrated, true leadership that causes paradigm shifts and enables global transformation by decreasing global entropy, usually transcends the political and economic realities and identifies true value for all the participants they rally to their cause.

From POTS, PANS and SANs to Computing Clouds – Current Issues in Information Technologies Management

POTS, PANS and SANs provide a fascinating study of the power of networking, scales of economies and the impact of global interoperability and massive scaling.  The evolution of switching, transmission and access technologies associated with POTS, PANS and SANs, the politics of their penetration and global impact on the economies of nations have taken different routes but with equally profound economic consequences.  POTS altered the communication landscape by connecting billions of humans anywhere any time at a reasonable cost.  It provided the necessary managed infrastructure to create the voice service, deliver it on demand and assure the connection to meet varying workloads and individual preferences with high availability, optimal performance and end-to-end connection security.  The service assurance set a standard known as “telecom grade trust”.

The Internet enabled the connection of billions of computing devices using the Internet Protocol (IP) network and enabled PANS that support today not only businesses but also a large consumer segment through the World Wide Web.  The growth of e-commerce and social networks are a direct consequence of this evolution with global impact.

The resulting explosion of data put a strain on the Information Technology (IT) infrastructure and the management of petabytes of data required a networked shared storage strategy that was addressed by the storage networking introducing custom hardware and software technologies.

With the advent of multi-CPU, multi-Core servers and server virtualization technologies, a new networking architecture called computing cloud is evolving that allows shared CPU, memory, IO, bandwidth and storage via the Internet or the Intranet to create and deliver services on a massive scale.  Virtual servers allow computing and storage resources made available to service developers for developing and delivering business and consumer applications to their customers using the computing clouds.  The computing cloud technologies are just evolving with several benefits already demonstrated but also many enhancements that are still lacking to make them massively scalable and globally interoperable with telecom grade trust [8].

Telecom grade trust today is the result of a long history of evolution of technologies and processes starting with AT&T.

According to AT&T [9], during 1894 to 1904, over six thousand independent telephone companies went into business in the United States, and the number of telephones boomed from 285,000 to 3,317,000. Many previously unwired areas got their first telephone service, and many others got competing companies. However, the multiplicity of telephone companies produced a new set of problems — there was no interconnection, subscribers to different telephone companies could not call each other. This situation only began to be resolved after 1913.  Theodore Vail in 1907 the then President of AT&T believed “that the telephone by the nature of its technology would operate most efficiently as a monopoly providing universal service. Vail wrote in that year’s AT&T Annual Report that government regulation, “provided it is independent, intelligent, considerate, thorough, and just,” was an appropriate and acceptable substitute for the competitive marketplace.”

From those monopolistic beginnings of AT&T to its remaking into today’s at&t through cycles of regulation and deregulation (accelerated by down-right fraud from its competitors such as MCI Worldcom), much has changed, but two things that have remained constant, are the universal service (access on a global scale) and the telecom grade “trust” (providing reliable, secure and high performance connection at a reasonable cost) that are taken for granted.

The Internet on the other hand evolved to connect billions of computers together anywhere, anytime from the prophetic statement made by J.C.R. Licklider [10] “A network of such [computers], connected to one another by wide-band communication lines [which provided] the functions of present-day libraries together with anticipated advances in information storage and retrieval and [other] symbiotic functions.”.  Starting with three computers connected in 1969, the network grew to 213 by 1981.  The IETF was formed in 1985 and used the Request for Comments (RFC) process to develop and promote the standards that drove the growth of the Internet transforming the “send and pray” network to become reliable, secure and high performance network.  However, government support from DARPA and the telecommunication Act of 1996 played key roles again in nurturing and fostering innovation.

Storage networking and resulting NAS and SAN technologies have changed the dynamics of the enterprise IT infrastructure in a significant way to meet business application needs but were not able to meet the cost constraints dictated by the mass services market.  Wild fluctuations in the workloads make it impossible to provision for meeting peak-load requirements cost effectively.  This created a new class of service providers such as Amazon, Google and Microsoft to abandon the expensive and management intensive SAN strategy to develop an alternative storage strategy using commercially off the shelf (COTS) hardware and distributed web based service oriented software architectures.  The resulting divergence between IT infrastructure supporting Internet based consumer services such as social networking, email and video streaming applications and mission critical business applications requiring high performance and low latency tolerance is currently providing a new opportunity to reexamine the economics of IT management.  The divergence between the mass-market service infrastructure and traditional business application infrastructure took a wider turn with the introduction of server virtualization that allowed dynamic server provisioning, application migration, dialup, and dial down of application performance to meet wildly fluctuating workloads.

cloud evolution

Figure 1 shows the two divergent paths.  While the business application infrastructure (shown in the left) provides visibility into application availability, performance and security, the control is still labor and knowledge intensive.  The human latency in diagnosing and addressing application specific workload variations and varying business priorities often cost hundreds of thousands of dollars in software and service costs [11].  The silo approach the vendors provide is often called the Viagra approach with point solutions propping up old rickety systems that are not meeting the application centric management requirements demanded for mass scale deployment. Many of the software management tools end up as shelf-ware and service consultants swarm customer data centers to provide measurement, correlation, diagnosis and implementation services to optimize resource allocation to applications and address any contention issues with shared resources.  Often, best practices provided by server, network and storage vendors only optimize resources within their Silos.  These solutions often conflict with end-to-end optimization goals and business priorities that are different for different applications.  Diagnosis becomes even more complex (thus increasing the human latency) with virtualization layer in the server and virtualization in the storage to mask heterogeneous management systems and vendor devices.  While the Viagra approach provides recurring service revenues for equipment, software and service vendors and allows them to sell point solution software, it also increases the cost of visibility and control for the data center operators.  The Return on Investment (ROI) and Total Cost of Ownership (TCO) calculations the vendors demonstrate using their calculators often, drive local optimization in their silos while resulting in end-to-end optimization cost increases.

In addition, the server virtualization introduced to take advantage of multi CPU and multi Core servers to reap the benefits of energy conservation and better utilization with consolidation, adds another layer of I/O virtualization that neutralizes all the optimization strategies that expensive SAN storage vendors provide.

For these reasons, the new cloud providers have opted for cheaper Commercially Off-The-Shelf (COTS) hardware coupled with software approaches for simpler databases that are distributed, and service oriented software development environments for creating web based service applications.  However, while this approach reduces the management complexity, it does not address the visibility and control required to manage shared resource environments with telecom grade trust.  Application specific availability, performance and security management are wanting and piece meal solutions are being attempted which will again lead to similar issues with increase in complexity.

Recent announcement of virtual private clouds by Amazon is a first step in the right direction by allowing secured access to their virtual resources and infrastructure.  However, it addresses only access issue to hosted virtual servers.  For a computing cloud to go beyond being a pool of hosted virtual servers, and provide telecom grade trust at application or service level, it must address end-to-end connection management of computing resources from the CPU to the spindle.  While virtual servers have provided consolidation, flexibility, mobility, performance management and Disaster Recovery (by instantly replicating virtual servers) taking advantage of the new multi-CPU and multi-core physical servers, it has:

  1. Reduced visibility within a virtual server, through layers of virtualization increasing indirection between logical and physical resources,
  2. No control of application to spindle resources (dial-up or dial-down resources on demand) within each virtual server at run time to address changing workloads and business priorities, and,
  3. Increased cost and latency of diagnosing and resolving shared resource conflicts between multiple virtual servers

One question is which vendor cloud approach and lock-in is preferred?   As pointed out by Tim Bray [12],

“The small problem is that we haven’t quite figured out the architectural sweet spot for cloud platforms. Is it Amazon’s EC2/S3 ―Naked virtual white box‖ model? Is it a Platform-as-a-service flavor like Google App Engine? We just don’t know yet; stay tuned.”

Virtual server sprawl and their management have become more complex than physical server farm management. No cloud vendor has addressed virtual server sprawl management by providing visibility and control to assure telecom grade trust to both service development and service delivery.  Three factors raise two important questions:

  1. The inability, today, to easily dial-in or dial-out a virtual server from one cloud to another with telecom grade trust,
  2. The inability to dial-up or dial-down resources used by a single virtual server at run-time based on workloads, and
  3. The lack of visibility and control to resolve contention between shared resources dynamically, among many virtual servers, based on business priorities.

When management issues are accounted for, is the cloud (whether private or public) using current virtualization technology that depends on a whole virtual server replication and or migration, cost effective?  Are there better alternatives?

Paradigm Shift to Eliminate Waste in Information Technologies Management

While current state of the art has not yet assured confidence with telecom grade trust, if approached correctly, I believe that computing clouds present the last frontier in information technology revolution that will reduce complexity, provide global interoperability and telecom grade trust to networked computing resources.  Based on POTS, PANS and SAN experience, it is easy to see that reducing waste and providing telecom grade trust for accessing computing resources globally will have profound economic consequences.

The key to a paradigm shift is to recognize that the current administration and management paradigm that originated with server architecture is static and assumes that the resources (CPU, memory, bandwidth, storage capacity, throughput and IOPs) are allocated to an application at install time.  Changes to workloads and business priorities are assumed to occur at longer time scales, and administration can be performed off line.  This assumed that there were maintenance and administration times that are scheduled and the services the application provides can be interrupted during this period.

With high-speed networks and global connectivity, this assumption broke down and many management systems were added on to improve, the availability, performance and security as shown in the left side of figure 1.  However, the cost and flexibility required for mass scale deployment of services with wildly fluctuating workloads and business priorities has created the alternative computing cloud architecture on the right side of figure 1.

However, even the cloud architecture shown in figure 1 (on the right hand side), still assumes a static administration paradigm and still requires virtual servers to be provisioned at install time.  Configuration cannot be dynamically changed based on changing application workload profiles or business priorities at run time.  This makes application specific performance management, and storage administration very cumbersome, labor and knowledge intensive.  For example, when there is resource contention, one cannot stop one low priority application and divert its resources to another application with a higher business priority without disruption.  The complexity compounds when you have clustered servers (virtual or physical) with redundant paths to clustered storage devices.

Opportunity for New Approach to Develop Computing Clouds

Deming and Ishikawa taught us that removing waste and implementing far-reaching changes in an organization requires management collaboration that transcends organizational and geographical boundaries.

Return on investment must address not only the impact on share holders but also on impact on employment, customer intimacy and loyalty, impact on the ecosystem of suppliers, generation of tax revenues that facilitate better social fabric with national and global harmony and reduce entropy  through waste elimination.  The Japanese management understood this message very well when they started implementing TQM on a national level and global level.  Their emphasis on harmony (Wa),  Kyozon Kyoei (growing together) and their long term focus helped them become the second largest economy.

It is also interesting to note the contrast between 1950 and 2010.

In 1950, educated human resources were suggested to compensate for lack of access to raw materials at that time.  In 2010, the human resources are at a premium (especially in Japan caused by aging population and low birth rate) and it makes economic sense to eliminate IT management latency through automation that goes beyond incremental approach.  By creating the next generation server, network and storage infrastructure with dynamic resource control, the need for massive outsourcing is eliminated while creating a new paradigm for next generation computing clouds that will radically transform the services economy worldwide.

This will be analogous to Strowger’s switch eliminating many operators sitting in long rows plugging countless jacks  into countless plugs and reducing the cost of adding new subscribers that had risen in a geometric proportion. According to the Bell System chronicles, one large city general manager of a telephone company at that time wrote that he could see the day coming soon when he would go broke merely by adding a few more subscribers [13].  The only difference between today’s IT data center and central office before Strowger’s switch is that “fewer, but very expensive consultants, countless hardware appliances, and countless software systems that manage them” replace “many operators, countless plugs and countless jacks”.  In addition, we have to account for the shelf-ware and the human latency involved.

More recently, in a speech at the NASA Ames Research Center in California, federal CIO Vivek Kundra said that the government cannot continue to invest in traditional data centers to support its IT needs, citing a doubling in the energy cost at federal data centers between 2000 and 2006.  Of the $76 billion the government spends annually on IT, $19 billion he said goes toward infrastructure maintenance.

Both US and Japanese governments recognize the problem and are sincerely looking for solutions.

The question is  whether today’s Japanese corporate management and Silicon Valley VCs are ready to mobilize and remove waste and replace over-provisioning of resources with on-demand provisioning in current IT infrastructure with innovative solutions or continue their incremental approaches? Can they create next generation servers & storage to implement telecom grade trust through computing clouds with 10X improvement?  Who is the next Ishikawa with a vision to transform Japanese business in the time of need?  Will the changing political clouds in Japan nurture the seeds of innovation or will it take the planned economy such as China to drive the next wave of innovation?  Or will the Silicon Valley VCs beat them?  Is this an opportunity for a collaboration between individualism and collectivism to establish a balance  between corporate greed and public good, vendor-lock-in and choice fatigue with too many options, and unbridled free markets and fully regulated monopolies?  Did the Japanese management have a better working model with their collective approach before they followed American capitalism “that is void of morals or moderation” as Hatoyama put it?  Would the computing cloud also by the nature of its technology, operate most efficiently as a monopoly providing universal service with telecom grade trust, under government regulation, as Theodore Vail put it, “provided it is independent, intelligent, considerate, thorough, and just?”.  Who will lead the effort to tame the last frontier of computing clouds in Information Technologies by taking the risk and fighting current monopolies?  Is it the Silicon Valley VCs, Japanese Samurai business leaders or emerging technocrats in China?

Having participated in the POTS, PANS and SAN revolutions both in US and in Japan, I am keenly interested in watching how the current cloud revolution will play out.  One sure thing is that it takes a revolution – not an evolution to implement the productivity improvements that are possible and are absolutely essential.  If history is any guide, AT&T resisted digital switching and fiber optics revolutions and lost its technical leadership.  Japanese companies resisted IP networks preferring ATM (Asynchronous Transfer Mode) switches and missed leadership in Voice over IP revolution.  COBOL programmers resisted Object Oriented Languages which eventually led them to their extinction.  SAN franchises will resist commoditization of storage.   Server vendors will resist modifications to current virtualization strategy claiming that unified computing has arrived in bundled server, network and storage blades supporting pools of virtual servers with virtual I/O without addressing the management complexity issue.  Browser vendors will lead you to believe that the browser is the true distributed cloud operating system, Silicon Valley VCs will fund its research & development and Wall Street pundits will confirm it on Cable shows.

It will take another Deming and Ishikawa to convince management to go beyond their current franchises to harness the synergy of POTS, PANS and NGN and make real progress to reduce the true cost of IT management and reduce the entropy of the universe.  This means replacing current form of management intensive SANs and creating next generation servers and storage devices with dynamic FCAPS management and real time mediation.  This means creating real network centric distributed computing architectures and operating systems.  This means simplifying current management stacks by eliminating them.  This means creating new self discovering, self configuring, self monitoring, self healing and self optimizing distributed software systems replacing current high maintenance architectures that assume static resource administration patched with a string of evolutionary management systems.

I have spoken to data center managers who will discard their current SAN infrastructure if they had a better alternative in a wink.  In fact some have already started their transition plans:

“I don’t care who provides my infrastructure …even for my mission critical applications as long as I have visibility into the cloud and have control of my application response time, I/O, throughput, availability, latency and security…and I have the ability to adjust it based on my business priority and changing workloads”  – This quote is from an IT Business Alignment  Manager at a Large Energy Company who is actively re-architecting their datacenter to move away from their current storage strategy.  This is a strong invitation to create next generation computing clouds with telecom grade trust with visibility and control by next generation service providers.  This is a strong invitation to next generation infrastructure providers to commoditize servers and storage with network intelligence and real-time FCAPS management.  This requires expertise in not only Information Technologies but also POTS, PANS and NGN.

Will No 1 and No 2 leading economies recognize the strategic imperative and act as they did when Deming pointed out that the management was the problem or will they freeze with fear and watch, and wait to outsource their IT infrastructure as new players emerge after the current recession to take leadership, and run with it?  Only time will tell.  In the meanwhile, the moon will glow the same while giving the illusion of change through drifting cloud forms to the hot spring lovers practicing tsuki mi and hadaka no tsukiai.

Plus Ça Change, Plus C’est la Même Chose!

 References Used:

[1] James David Andrews, “Full Moon Is Rising”, p32

[2] Scott Clark. “The Japanese Bath: Extraordinary Ordinary”, Re-Made in Japan – Everyday Life and Consumer Taste in a Changing Society, Edited and with an introduction by Joseph J. Tobin, Yale University Press, 1994

[3] Kuniko Miyanaga, “The creative edge: emerging individualism in Japan”,

[4] http://deming-network.org/deming_1950.htm

[5] Jerry Bowles, “obituary/tribute to W. Edwards Deming”, The Quality Executive, a monthly newsletter. January 1994

[6]  http://www.ces.clemson.edu/pipermail/den.list/2007-September/000019.html

[7] Originally coined by Negroponte from MIT Media Lab “Pretty Amazing New Services are discussed in a book by Jean-Jacques Laffont, Jean Tirole, “Competition in Telecommunications”, MIT Press, 2001

[8] http://blog.kawaobjects.com

[9]  http://www.corp.att.com/history/

[10]  J. C. R. Licklider (1960). Man-Computer Symbiosis.

[11] One company is offering a Health Check Service that will cost $25,000 to $50,000. It also plans to offer a product next quarter that will cost around $400 a switch port, plus the number of links being monitored.  http://www.byteandswitch.com/storage/infrastructure/virtual-instruments-tracks-storage-io-in-virtualized-systems.php

[12] http://www.tbray.org/ongoing/When/200x/2008/10/14/Cloudy-Times

[13] http://www.telephonetribute.com/switches.html#Mr. Almon B. Strowger and His Electric Telephone Switch

[a]Fault, Configuration, Accounting, Performance and Security management known as FCAPS has played a big role in reducing the Total Cost of Ownership and build Telecom grade “trust” in telephony.
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古郷や四五年ぶりの煤払 (furusato ya shi go nenburi no susu harai)

My home village–
four or five years of soot
needs sweeping

—-  A Haiku from 1824 [1]


Famous Rock Garden in Kyoto and a Zen Monk in a Learning Center of a Trading Company

A haiku (also known as Haikai) is a brief structured stanza that evokes emotional images with an element of surprise or contrast.  The intolerance against decay, the recognition of the inevitability of accumulating soot over time, the need to intervene and the acceptance of sweeping as an essential part of intervention; all these emotions expressed in this Haiku, are evident in various aspects of Japanese landscape such as rock gardens and tea houses.   They are also evident in Japanese daily culture emphasizing process and continuous improvement (kaizen).

The first time, twenty years ago, when I sat there at the Rock Garden at Ryoanji with a Japanese colleague counting the stones and watching the tracks of the rake, I kept wondering how they make  those lines everywhere and circles around the rocks.  Are there 15 stones and will you really see the 15th stone only when you attain enlightenment?  Do they rake every day?  How many monks does it take to rake the Rock Garden?

Zen influence on Japanese culture is not only visible in the Japanese gardens [2] but also both in business and every day life through:

  1. Emphasis on process in business
  2. High reliance on measurements, data and analysis
  3. Hobbies such as practicing tea ceremony (Chadou), flower arrangements (Ike Bana) and the martial arts

While Zen teaches a way to approach the actions of every day life with awareness and focus on the present moment, it is not really a religion in the western sense of the word.  In fact, Japanese approach to religion itself is unique.  It is said that the Japanese are born shinto, marry like a christian and accept Buddha when facing death and funerals.  Zen practice unlike western religions does not seek to enlist others.  Instead, the Zen masters actually discourage others from entering the monasteries.  I have heard of stories where the “would be disciple” is discouraged to join and doors closed.  Often one would wait for days at the entrance even in rain  and snow showing one’s will to pursue enlightenment when the monks finally take pity and open the door.

The Zen masters recognized the role of entropy both within (affecting human thought processes) and outside (in the relationship with surroundings.)  The concept of Wa (harmony) strives to fight the tendency of entropy, (the amount of uncertainty which remains about a system after all observable states are taken into account), to increase in a closed system.  Constant awareness (or mindfulness) to reduce random thoughts in the mind, struggle to improve harmony between self and the surroundings and the acknowledgement of the need for intervention to decrease entropy (sweeping the soot) have all seeped into both Japanese daily life and business discipline through “measure, manage and optimize” philosophy.  Kaizen or continuous improvement has transformed the way the processes are optimized in manufacturing, IT data centers and even in daily life.

While Kaizen is an equilibrium phenomenon, which attempts to reduce the entropy by increasing the knowledge through measurements analysis and intervention, innovation is a non equilibrium phenomenon striving to escape from the local equilibrium to find a lower or an absolute minimum.

A Zen Master’s quest was two fold:

  1. Find an equilibrium where the self and the surrounding are in harmony and
  2. Strive to continually maintain the balance between the self and the surrounding through awarenesss and intervention.

The amount of intervention is just enough to keep the balance at equilibrium.  As my english teacher used to say – a perfect essay is one where if you add one more sentence, it is one too many and if you take away one sentence it is one too short.

A long time ago, when I was attempting to unravel  the mysteries of classical and quantum liquids using Metroplolis and Green’s Function Monte Carlo methods, I learned that there are multiple local minima in the thermodynaic state of the system and some times you have to create chaos (in this case increase the temperature) to jump to a next local minimum (see figure).



Kaizen is very effective in reaching a minimum when the system is in an equilibrium state (local minimum).  However, the system has to go through unstable equilirium (jump the peak) in order to reach other lower states of entropy.  Innovation in process or product technologies facilitates this transition but at a price in the form of associated inconvenience caused by change.  Sometimes, the system may have to transition through a higher state of entropy before finding a lower minimum.

The raison d’etre for the Information Technologies (IT) in a data center is to provide the computing, network and storage resources required to create and execute business workflows that deliver specific services to the external world.  The external world is influenced by changing business priorities, varying workloads, environmental conditions and latency tolerence of service consumers.  The success of the data center depends on optimizing the harmony between the consumers and the supply of the required resources.  In a data center, the system entropy comprises of three components:

  1. The human latency in IT management that is involved in monitoring the changes in the surrounding and reacting to them with appropriate visibilty and control [3] (e.g., assuring application availability, performance and security)
  2. The amount of shelfware that has accumulated over time (the soot accumulated over the years) that is not only not helping to reduce the latency of response but actually comes in the way through the cost and effort required to maintain them (e.g., unused licences, annual maintenance costs, labor and knowledge intensive tasks of correlating information from multiple systems) and
  3. Lack of visibility into the impact of latency of response on business (e.g., customer turnover, loss of revenue etc.)

The IT management’s mission is to seek an optimal minimum in entropy through innovation and then to establish perfect harmony between the IT systems and its surroundings that they serve using Kaizen.

This is at odds with social and economic reality in Japan where a large number of humans depend on responding to the changes in the surroundings in the form of IT server, network and storage systems management.  In the old days, when the velocity of information was low,  global connectivity was not electronic, and Japan was an island unto itself, the human latency contribution to entropy was not a significant factor because the latency tolerance of the consumers was larger than the human latency involved in responding to the changes in the surroundings.  Today, globalization, the Internet, massive scale of social networking, broadband communications, wildly varying demand and rapidly changing business priorities are straining the current IT infrastructure, and human latency has become a significant part of the entropy contribution.  The soot, that is accumulated over time in the form of a patchwork of management systems, (evolving from a server centric IT to a fully network centric IT), designed to provide local optimization in server, network, and storage domains adds an additional overlay of people, processes, and technologies attempting to integrate the silos and contributes more entropy.    To meet the changing latency tolerance requirements of IT resource consumers, the infrastructure has to transform itself and serve the new reality.  Agility through dynamic reconfiguration, and customization have to become the norm and not an exception.  Connecting the right resources to right consumers based on their latency tolerance and business priority becomes a differentiator.  Changes in consumer demand at electronic speed mandates visibility and control at electronic speeds and no less.

The advent of switching technology in the first decade of the 20th century, eliminated the human latency in operator based manual switching in telephony introduced in the late 19th century. Will a “Cloud Switching technology” eliminate human latency in the 21st century data center?  If history is any guide, the disruption is inevitable.  One can only minimize the impact with careful design and planning.  Japan has witnessed such transformations before and has led some of them.  Japanese management has successfully managed human network connections with great organizational ability, adopted Total Quality Management,  and established leadership in telecommunications infrastructure in the past.  How will the new generation of managers establish harmony between the IT systems and their global surroundings? Will they move from Kaizen, with which they feel so comfortable, and cause planned chaos required for innovation? Or will Japan become an island unto itself again or reclaim its past position in global technology play.  Will their ambition go beyond selling 500,000 servers?  This is the theme of my study. I am looking for input, comments, and collaboration. I invite anyone with appropriate insight to participate.

[1] http://haikuguy.com/issa/search.php?keywords=sweep&year=

[2] http://learn.bowdoin.edu/japanesegardens/gardens/intro/index.html

[3] http://www.soacenter.com/?p=189
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–  Sung by Ishikawa Sayuri

In this karaoke song Ishikawa Sayuri conveys the essence of the Japanese heart.  The spring, lying-down under nocturnal cherry blossoms, hanami zake, and that special ‘anata’ indeed explain why she feels being born in Japan is so good!  The hanami (cherry blossom viewing) fever sweeps through Japan from the southern part to the northern part during the period from January to May.  The cherry blossoms last only a short period of time and the delicate flowers are viewed as a metaphor for life itself depicting its fleeting and ephemeral nature and are used as an excuse for drinking sake and partying.  The collective nature of Japanese society becomes highly visible during hanami parties where the parks are decorated with temporary paper lanterns to celebrate yozakura late into the night and groups gather under the cherry blossoms with drinks and dango (dumplings).

Karaoke is as Japanese as hanami and captures another aspect of cultural essence where technology, business, social context and human element are closely interwoven.  During the heyday of Japanese business leadership, Karaoke ranked at the top with 43 percent, followed by traditional hobbies like tea ceremony, flower arrangement and horticulture with 32 percent, and creative arts such as drawing, photography and sculpture with 24 percent. (Japan Times, 4 November 1993) [1]. A wide variety of venues are available for Karaoke making it accessible to mass consumer market.  A part of “mizu shobai” (unstable business dealing with unpredictable customers, such as bars), Karaoke bar has become a component of Japanese corporate culture.  Japanese management cultivates special karaoke bars for entertaining their clients and creating a “safe” place where business is conducted.  It is usual for a buchou or a shachou to establish a special relationship with a Mama San and conduct his business for both entertaining clients and to discuss with his group in a relaxed atmosphere.  One Japanese manager of a large corporation warned me “Rao San, be careful on what you say to Mama San tonight.  She has e-mail connection with the shachou”.  A senior buchou uses karaoke bar to train his junior members (senpai and kohai relationship), listens to their complaints without judgment and gathers information from colleagues.

In the past, Karaoke and Love Hotels in Japan provided high technology impetus to continually improve the “experience” for their customers.  The ubiquity and demand from all strata of society provide a mass consumer market for the karaoke service and Karaoke service could be a natural candidate for the emerging cloud computing technology.  A network centric virtual karaoke bar could extend the reach globally.

“The service in this example enables an individual to throw a network-based karaoke party, in which the invitees can participate from their own homes. The host issues electronic invitations and reserves the time for the party. Before the appointed time, the host will choose the service providers, browse the clips and songs, and choose to create a customized medley of songs and sceneries for the party. The service is billed on the basis of actual time used and allows suitable discounts for longer periods and a larger number of participants. It also charges for optional services, such as the ability to add personalized digital images or video clips to the sceneries. It also allows discounts if the service providers are allowed to inject commercial messages or clips into the party.  At the appointed time, invitees can join the karaoke party, and their images are mixed, in real time, with the chosen backgrounds in a smooth fashion. The singers can be chosen and the songs selected with intuitive user interactions. When a song begins, the singers and the sceneries can be edited and blended in real time to give a seamless image that transcends the boundaries of space and time for a short period. This simple service brings out key requirements for the grand convergence, in which computing, storage, and networking must blend in a way that provides a thrilling experience for the participants.  Obviously, the same requirements will make a host of other services, such as business videoconferencing, data sharing, and so on, possible.”  This service was described by the authors [2] in the year 2002 during the heyday of Internet service optimism and before the Internet bubble burst.  Many advances have occurred but the technologies are still far away from implementing the real-time blending of singers and the scenery alluded to in this article and required telecom grade service features.  The closest service that has recently been introduced by Animoto and is successfully duplicated by Microsoft is the service that blends pictures and music to create a video.

Obviously this service has broader applications such as providing massively scalable and globally interoperable virtual Karaoke bars, interactive video conferences and entertainment industry infrastructure.  However recent economic down turn and the graying of Japanese society (where 21.5 percent of its population is 65 or over) are having a major impact on the future of Karaoke:

1. On one hand, the dwindling profit margins and tight corporate budgets are taking a toll on Karaoke bars by limiting the clientele to physicians, independently wealthy folks and a few high level business executives.
2. On the other hand, a new set of “day-time” Karaoke bars are springing up in every town in Japan catering to grandmothers and grandfathers who pay $10 for half a day while enjoying singing and conversation.  My friend says that his mother, already 84 years, enjoys this kind of Karaoke two or three times per week in a small town.

Be that as it may, the Karaoke in the cloud or for that matter, any other service in the cloud should provide end-to-end, generic requirements for the computing cloud infrastructure, service assurance, service creation and service delivery just as the simple voice service provided the requirements for AT&T Bell Labs researchers who defined Local Switching System Generic Requirements (LSSGR), Operation Support System Generic Requirements (OSSGR) and Total Network Operations Processes (TNOP).  Whole industries were created with these requirements in the past.

Any generic cloud service requirements must address four stake holders:

1. Infrastructure developers who provide the computing, network and storage resources that can be dynamically controlled to meet massively scalable and globally interoperable service networks with varying workloads and business priorities.  The infrastructure will be used by both service creators who develop the services and also the end users who utilize these services.  This is very similar to switching, transmission and access equipment vendors incorporating service enabling features and management interface in their equipment. Current storage and computing servers lack dynamic dial-up and dial-down features and automated management capabilities which eliminate human latency along with a patchwork of legacy management systems.

2. Service providers who assure both the service developers and the service users that the resources will be available on demand, they can pay based on usage and the resources will be managed to provide Service Level Assurance to meet availability, performance and security required by each service.  The managed resources that the service provider provides are confined to CPU, memory, network bandwidth, storage IOPs, throughput and capacity that can be dynamically dialed up or down on demand with specific requests from the resource users.  This constitutes a computing services dial tone with availability, performance and security Service Level Agreements (SLAs).  In addition the service provider must provide both visibility and control to end users so that they can manage their computing resources to create logical servers with virtual storage to meet their service latency and business requirements.  The service provider manages the application to computing, network and storage resource connection with appropriate SLAs.  This is a totally different model from most cloud computing solutions that are nothing more than hosted infrastructure or applications accessed over the Internet.

3. Service Developers of cloud based services will use   the management services API to configure, monitor and manage service resource allocation, availability, utilization, Performance and security of their applications in real-time.  Service management and service delivery are integrated in the application development so that the application developers will be able to specify run time SLAs.

4. The end users of cloud based services demand choice, mobility and interactivity with intuitive user interfaces [2].  The managed resources allow the service developers to create virtual services using logical servers that meet appropriate SLAs and provide services to end-users and charge them based on usage.   The service providers must also assure service levels for end users.

Figure 1 shows the reference model [3] that shows three stake holders involved in computing clouds:

Computing Clouds Reference Model

Computing Clouds Reference Model

These requirements truly bring the convergence of the Next Generation Network and the next generation computing infrastructure.   Today’s IT infrastructure with its server, network and storage silos, myriad management systems and resulting human latency associated with end-to-end service management does not meet the requirements for the cloud services.  What is missing is the Service Provider assuring availability, performance and security SLAs and providing end-to-end visibility and control to meet the requirements of both the service developers and end users.  The service developers will then be able to develop logical servers with virtual resources and develop truly distributed managed services fabrics [4, 5, and 6].  A technology with profile based dynamic connection management between consumers and suppliers of resources using a distributed computing model has applicability beyond fixing the IT infrastructure management.

Putting lipstick on current IT infrastructure with incremental approaches will not yield leadership either.  Convergence of Next generation Computing Clouds and the Next Generation Network must undergo an architectural transformation to gain 10X productivity improvement. Transformation from COBOL programming to Object Oriented computing, analog to digital switching and landline to wireless communications are just such examples that occurred within the past two decades since I wrote my thesis on Japanese management.

Cloud computing might just be the driver for the Japanese companies to regain their lost momentum in becoming Number 1 providers of IT infrastructure as Sekizawa had dreamed [7].  It also might be a driver that will radically improve the performance of the Kasumi ga Seki cloud and the Japanese government may well go back to their strength in orchestrating nationwide innovation by betting on the right technologies with long term vision as opposed to the West’s teaching of letting the free market short term greed from wall street gamblers do its own thing (which has not worked out so well as shown by recent developments).  It is ironic to note that a pure technology company Sony has been transformed into a movie gambling company in the name of hardware and software convergence through western influence while Steve Jobs by sticking to his knitting, brought technology to Hollywood through Pixar.  Steve Jobs also has demonstrated with Apple that long term vision and no-compromise innovation do succeed in the market place proving many Wall Street pundits wrong on their predictions.  People who remember Newton and NeXT computer will appreciate Iphone.

During the past two decades, while the Japanese Management surrendered their leadership in telecommunications and their ambitions for IT dominance, they have managed to preserve their R&D labs. The innovations required for creating next generation computing clouds are telecom grade hardware with dynamic provisioning, mass market consumer devices and large scale coordination of different groups (Kyozon Kyoei discussed in my thesis [8]) to create infrastructure fabric and the management services fabric – all of which were strong suits for Japanese management at least in the past.  Vertical integration (still preserved in Japan) of chip to system to solution development may well be an advantage for quick-to-market prototypes if the uchi and soto barrier can be overcome.

Is the current Japanese management bold enough for creating new computing cloud infrastructure leadership?  Who will be the next Sekizawa or Sekimoto who will lead the next generation computing clouds?  Will the mighty MITI gain its leadership again?  If the current generation of Japanese management is not up to the challenge, will the old masters come out of their retirement to restore the old glory?  Will the “Japan Inc” of the eighties rise again or will it become a mere footnote in history’s pages?  I am looking for input, comments and collaboration and invite anyone with appropriate insight to participate in an update to my thesis of almost twenty years ago.

[1] Bill Kelly, “Japan’s Empty Orchestras: Echoes of Japanese Culture in the performance of Karaoke” in “The worlds of Japanese popular culture”, Cambridge University Press, edited by Dolores P. Martinez, 1998. p76

[2] Mikkilineni, R and Pugmire, G, “The connection between profit and services in the next-generation network”, Annual Review of Communications V 54, 521, 2002

[3] Mikkilineni, R and Sarathy, V “Cloud Computing and Lessons from the past”, 18th IEEE International Workshops on Enabling Technologies: Infrastructures for Collaborative Enterprises, WETICE 2009, Groningen, The Netherlands, 29 June – 1 July 2009, Proceedings. IEEE Computer Society 2009, p 28-32

[4] P. Goyal, “The Virtual Business Services Fabric: an integrated abstraction of Services and Computing Infrastructure,” in Proceedings of WETICE 2009: 18th IEEE International Workshops on Enabling Technologies: Infrastructures for Collaborative Enterprises, 33-38 (2009).

[5] P. Goyal, R. Mikkilineni, M. Ganti, “Manageability and Operability in the Business Services Fabric,” in Proceedings of WETICE 2009: 18th IEEE International Workshops on Enabling Technologies: Infrastructures for Collaborative Enterprises, 39-44 (2009).

[6] P. Goyal, R. Mikkilineni, M. Ganti, “FCAPS in the Business Services Fabric Model,”  in Proceedings of WETICE 2009: 18th IEEE International Workshops on Enabling Technologies: Infrastructures for Collaborative Enterprises, 45-51 (2009).

[7] Lyne, Jack. “Fujitsu PC Corp. CEO Akio Hanada: Coming to America . . .And Just about Everywhere Else” 1996,  http://www.developmentalliance.com/docu/pdf/43354.pdf

[8] Rao Mikkilineni, “Current Issues in Japanese Management – Is Japanese Software Thrust As Powerful As Their Hardware Thrust?”, Thesis submitted to Japan American Institute of Management Science, Honolulu and Sophia University, Tokyo, 1990

“First snow
on the half-finished bridge.”

– Haiku by Matsuo Basho

Photo:  Path to an open air Hot Spring bath (Rotenburo)


Snow plays a very important role in Japanese life.  People romanticize snow and雪国, yukiguni or snow country in enka singing. “Yuki mi” or snow watching, gives an excuse to drink sake and ponder about the impermanence of everything and nothing. The hexagonal shape of the body and roof of yukimi lantern is designed to capture the snow on its roof, and instill a sense of purity and serenity to the viewer. The Sapporo Snow Festival, one of Japan’s largest winter events, attracts about two million people to Sapporo to see the hundreds of beautiful snow statues and ice sculptures which line Odori Park, the grounds at Satoland, and the main street in Susukino.  For seven days in February, these statues and sculptures (both large and small) turn Sapporo into a winter dreamland of crystal-like ice and white snow. Yasunari Kawabata’s “Snow Country”, captures the Japanese “kokoro” in a novel that won the Nobel Prize.

Japanese snow also features in a trade controversy as the following excerpt states:“The oldest forms of barriers are tariffs (taxes or “duties” on imports) and non-tariff barriers, such as quotas (quantitative restrictions), both of which are imposed at the border.  Other less visible trade barriers include more indirect, inside-the-border practices such as official acceptance of collusion among domestic businesses, distribution systems that discriminate against foreigners, and restrictive government procurement practices.  One of the most notorious instances of unduly restrictive safety and health standards was the onerous set of technical specifications that Japan imposed on imported skis in the 1980s on the grounds that Japanese snow was different from that of other countries.” [1].“Japanese snow” since has become a euphemism for “collusion politics” and “crony-capitalism” that have been associated with Japanese business especially during the peak of Japanese success globally.  Often, western vendors complained that their products had to be validated to meet unreasonable demands that stem more from low risk tolerance of Japanese management or high reluctance to embrace anything that they are not used to.

Collectivism and the need to bring a whole group of people together who have disparate vested interests to agree upon any action, creates a natural barrier to innovative approaches, technologies and ideas from outside. Even within a company, “groups” exist and “soto and uchi” play a very important role on how decisions are made.  The telecommunication division views computer division as “soto”.  Domestic market division looks at the global market division as “soto”.  In reality, the collectivism is practiced as a hierarchy of groups who cooperate within the group but fiercely compete with outside groups.   At any level of the hierarchy, the subgroups are loyal to the main group but fiercely compete with outside groups even within the same company.  This is one of the reasons why the institutional knowledge dispersed in different subgroups of a company becomes ineffective in delivering synergy.  This also explains why every Japanese technology company that has communications, chip and computer expertise, has not been able to leverage the synergy to successfully develop convergent technologies inside Japan.  Ironically, in the US Silicon Valley, where individualism reigns supreme, companies collaborate with each other to harness complimentary expertise to create synergy in the products they develop.

History shows the uniqueness claim has been a double edged sword.  While it may have protected some interests in the short run, in the long run, it has isolated Japanese technology from global markets and also prevented efficiencies that stem from innovation to permeate in the Japanese fabric faster.  Example of the effect of “uniqueness” is the recent turmoil in Japanese mobile manufacturing sector.  By embracing their own unique way of implementing the mobile communications, they have missed out on global expansion and are now trying desperately to catch up on Iphone revolution. Is recent withdrawal of Japanese manufacturers from mobile phone business when Iphone is creating a record in growth a direct result of Japanese uniqueness play?

In my update of the “current issues in Japanese Management”, I am investigating how the current generation of Japanese leaders embraces innovation. I am especially interested in how the current generation is approaching IT management and what the west claims to be the “next big thing” called Cloud Computing.  Japan’s Ministry of Internal Affairs and Communications, plans to build a massive cloud computing infrastructure to support all of the government’s IT systems. The Kasumi ga seki (literally means the fort of fog) Cloud, named after a Tokyo district where the IT infrastructure will be housed, will be built in stages from now until 2015. The goal of the project is to consolidate all government IT systems into a single cloud infrastructure to improve operation efficiency and reduce cost.  The major components of IT operation costs are:

  1. Computing equipment,
  2. Communications equipment,
  3. IT operations management software and
  4. Processes and People who support IT

While the equipment costs have gone down dramatically over the last two decades, the software and people costs have not.  Ironically, while their hardware revenues draw fewer margins, the vendors who sell computing and storage devices have looked to increase their revenues and profits through selling software management systems and service offerings often at exorbitant rates in the form of systems engineers, process consultants and health check experts. Unless, the escalating software (often called shelf-ware because it is not very useful and gets stored on a shelf) and services costs are brought under control through new innovation similar to what happened with telecommunications network and service management automation, consolidation of IT in Kasumi ga seki only moves the problem from many places where it exists today to one place by 2015.

True cloud computing productivity improvements will only come from innovation in hardware and operating systems that allows application software to dynamically adjust its computing, network and storage resources to meet changing workloads and business priorities, software that is self configuring, self healing, self managing and self optimizing and processes that totally eliminate human latency involved in troubleshooting and diagnosis.  More self-serving vendor driven management systems (suggesting to put other vendor products behind their’s) and processes without a fundamental architectural transformation will not lead to drastic productivity improvement. If the Japanese management is not ready for such innovation, the kasumi ga seki cloud will be only a half-finished bridge before the first fall of snow.

I am looking for input, comments and collaboration and invite anyone with appropriate insight to participate in my research.

[1] Stephen D. Cohen, Robert A. Blecker, Peter D. Whitney, “Fundamentals of U.S. foreign trade policy: Economics, Politics, Laws and Issues”, Westview Press, 2003 Edition 2, p96

According to Geert Hostede, “Individualism is on the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word ‘collectivism’ in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world.”

Figure 1 shows the Individualism Index for Japan, Germany and USA [1].

Individualism Index

Individualism Index

In my study of Japanese management twenty years ago, I found many arguments about how individualism and collectivism play key roles in business success.  One argument from Professor Robert Ballon of Sophia University struck me as very interesting.  His thesis is that the social characteristics of a group are related to the resource availability for the group.  If the resources are abundant, system allows individualism and also tolerates resulting duplication and resource wastage.  However, as the resources become scarcer, the group members tend to collaborate with each other to optimize available resources to meet the common goals for survival.  Even if the group starts with competition resulting in violence, eventually they learn that collaboration is a better way to assure the survival of the group as a whole.  This is especially true if the group coexists over a long period of time.  Business success depends on a balance of individualism and collectivism.  100% collectivism tends to foster tribalism and kills innovation thus reducing opportunities for business success.  100% individualism fosters cream skimming, greed, looting and eventual wastage of resources.

The quest for total resource optimization often leads to tradeoff of time against space and collectivism against individualism.  For example, in the days when global connectivity was limited, Japanese management evolved to optimize space that was a scarce resource and organized themselves to put the “group” first.  However, as the global connectivity broadened, people started to become more individualistic.  For example, playing golf in Japan is a very expensive proposition, but today, a Japanese business person can fly to Hawaii and play golf at a cheaper price.  Just-in-time inventory optimizes shelf-space.  However, it requires broadband transport to meet latency tolerance limits of consumers.

There are many theories on whether more dominant collective nature of Japanese management is conducive for success in global business in general and software business in particular which I discussed in my thesis.  However, more interesting aspect of collectivism is its ability to form human networks (humans networking as groups collaborating to achieve common objectives).  The human networks are considered intelligent because they accomplish their goals in multiple ways using information collected from the external world and using it to control it.  The human network consists of a group of individuals operating as a system [2]:

  1. Every system has a purpose within a larger system
  2. All of a system’s parts must be present for the system to carry out its purpose optimally
  3. A system’s parts must be arranged in a specific way for the system to carry out its purpose (separation of concerns)
  4. Systems change in response to feedback (collect information, analyze information and control environment using specialized resources)
  5. Systems maintain their stability (in accomplishing their purpose) by making adjustments based on feedback

According to Vancho Cirovski, [3], the effectiveness of the human network depends on the connections, communication and mastery (or specialization) of the individual human object.  Better the quality of mastery of the individual node, the quality of connection and communication, higher the effectiveness.  Human networks provide a perfect working model for distributed computing.  Malone [4] describes the distributed computing model:

  1. Organization consists of connected “agents” accomplishing results that are better than if they were not connected.
  2. An organization establishes goals, segments the goals into separate activities to be performed by different agents, and
  3. Connect different agents and activities to accomplish the overall goals.

Scalability is accomplished through hierarchical segmentation of activities and specialization. There is always a balance between the cost of coordination of the agents and economies of scale obtained from increasing the network size which defines the nature of the connected network.  Efficiency of the organization is achieved through specialization and segmentation.  On the other hand agility of an organization depends on how fast the organization can respond to changes required to accomplish the goals by reconfiguring the network.

Both efficiency and agility are achieved through a management framework that addresses Fault, Configuration, Accounting (utilization), Performance and Security (FCAPS) of all network elements (in this case the agents).  Project management is a specific example where Fault, configuration, accounting, performance and security are individually managed to provide an optimal network configuration with a coordinated work-flow.  Functional organizations, and hierarchical and matrix organizational structures are all designed to improve the efficiency and agility of an organization to accomplish the goals using both FCAPS management and signaling based arbitration of resources depending on system priorities and workload variations.

What does this have to do with Software, Computing Clouds, and Japanese Management?  Software is the electronically encapsulated human knowledge captured as workflows in executable form.  Therefore, the ability to rapidly develop software or translate domain knowledge into machine executable form is crucial to developing a competitive edge. Current efforts in developing manufacturing systems, banking systems, insurance systems, healthcare systems, and financial systems are just such efforts to translate the specific domain knowledge into executable form, establish interfaces to real world to synchronize the information and execute automated control.  To cope with the rapid increase of the velocity of information, we are depending more and more on complex software systems to manage information in many of these domains.  There are many implementations of the distributed computing model discussed above in developing workflow automation:

  1. Telecommunications network service creation, delivery and assurance
  2. The IP network and infrastructure management
  3. Transportation networks
  4. Power grid management etc.

All these implementations make use of distributed computing model to manage distributed shared resources to optimize the overall system availability, performance, security and utilization.

Computing clouds are emerging as vehicles to share distributed virtualized computing, network and storage resources to implement business workflows. Computing clouds in order to be massively scalable and globally interoperable must support dynamism and end-to-end connection FCAPS management.  Such management demands implementing distributed computing models that are as good as the human networking model.  Will the Japanese management that has successfully implemented distributed computing model in human networks, telecommunication system, be able to build reliable, scalable, secure and dynamically reconfigurable Computing clouds? This is the topic of my research and I invite anyone with appropriate insight to participate in an update to my thesis of almost twenty years ago.

[1] http://www.geert-hofstede.com/hofstede_dimensions.php

[2] http://www.thesystemsthinker.com/systemsthinkinglearn.html

[3] http://www.orgnet.com/MCO.html “Managing the Connected Organization” by Valdis E. Krebs

During the 80s, in the heyday of Japanese dominance in global markets, two things in Tokyo were highly visible to a foreigner:

  1. Karaoke (part of “mizu shobai”, an unstable business dealing with unpredictable customers, such as bars), was an essential element of doing business in Japan and
  2. Getting a taxi in Tokyo for a “gaijin” was next to impossible

While getting a taxi in Tokyo is much easier now, Karaoke still is an integral part of “mizu shobai”.  Granted, the corporate accounts are not as liberal as they used to be and the Japanese managers are more discreet in inviting the ‘gaijin’ today to be entertained by their favorite “mama san”.

Noticeably, the spirit of the current Japanese managers is quite different and the mood is less confident.  In the 1990’s, it was taken for granted both by the Japanese Management and global Japan watchers that Japan would be destined to play a leading role in global computer and communications industries, as this extract from Jack Lyne’s article states [1].  “”Yes, it is as [Fujitsu Ltd.] President Sekizawa has said,” explains Akio Hanada, Fujitsu PC Corp.’s President and CEO. “Fujitsu is striving to be the world’s leading Information Technology Company.  “FPC is a big part of that drive. We can only win in global competition by increasing sales in the United States, the biggest market in the world.”  And when does Fujitsu envision taking the No. 1 spot in information technology?  “We would like to be the world IT leader as soon as possible,” Hanada says.”

However, even during the heyday, while accepting the success in hardware related industries, questions were posed whether the same methods will give similar success in software markets.  Some argued that their hardware experience will translate to software factories and they will dominate the software development process.  This turned out not to be the case.  Others argued that the Japanese management has exploited their cultural characteristics to successfully implement business practices in hardware and manufacturing segments with high degree of success and will carry them to software.  I had a unique opportunity as an executive from U S WEST to study in a joint program offered by Japan American Institute of Management Science (JAIMS) in Hawaii and the Sophia University in Tokyo and return to develop joint R&D programs.  I was a guest intern at Fujitsu where I wrote my thesis on “Current issues in Japanese management – Is Japanese Software Thrust as Powerful as Their Hardware Thrust?”  My conclusion was that they were not adopting three of the cultural attributes they applied successfully in hardware projects to software projects:

  1. Incorporating innovative technologies to gain competitive edge:  While they were quick to bring hardware technology innovations from the west by working very closely with their R&D counterparts, they were very slow in adopting new software technologies such as Object Oriented Development, Iterative prototyping etc.
  2. Planning cycles that are very long that suited hardware manufacturing involving large capital layouts did not help them to rapidly develop software systems whose requirements change more rapidly.  Often, they used yesterday’s technologies to meet today’s requirements and developed products very slowly and missed to meet the rapid pace at which software systems were being developed and deployed globally.  This forced them to confine software systems development to domestic market.
  3. Education of new technologies in software that were being rapidly adopted in the west was slow in permeating in Japanese culture perhaps due to the language barrier.

With the advent of IP networks which the Japanese management underestimated [2] and the demise of ATM broadband switching growth, their traditional telecommunications market dwindled.  With servers and network equipment increasingly becoming a commodity, the hardware markets for Japanese vendors started shrinking getting them confined to domestic market.  One exception was the growing storage hardware market which Hitachi exploited by entering early and copying EMC’s success with Japanese hardware prowess.  However, their software entry into storage was not as successful with products like Tuning Manager which customers claimed neither tunes nor manages.

Twenty years later, the Japanese management is at crossroads today looking at emerging computing cloud revolution and wondering how to play.  The computing clouds demand the convergence of telecommunications and Information Technology services platforms and offer a unique opportunity for new leaders to emerge after the current recession when the pent-up demand along with the new health and green initiatives will breathe a new life into the hardware and software markets.  Players well positioned to take advantage of the transformation with innovative and disruptive solutions can change the landscape and establish leadership.  According to Steve Ballmer, CEO of Microsoft, “During the past decade, a dramatic transformation in the world of information technology has been taking shape. It’s a transformation that will change the way we experience the world and share our experiences with others. It’s a transformation in which the barriers between technologies will fall away so we can connect to people and information no matter where we are. It’s a transformation where new innovations will shorten the path from inspiration to accomplishment. Many of the components of this transformation are already in place. Some have received great deal of attention.  ‘Cloud computing’ that connects people to vast amounts of storage and computing power in massive datacenters is one example.”

“You can see they’ve gone from 50 instances of EC2 usage up to 3,500 instances of EC2 usage. It’s completely impractical in your own data center over the course of three days to scale from 50 servers to 3,500 servers. Don’t try this at home.”  With this assertion, Jeff Bezos from Amazon, points out that current data center infrastructure is not able to scale to meet the mass market needs of emerging social networking and the Internet based services delivery.

While Amazon, Google and Microsoft have made significant strides, true computing clouds will be enabled by innovation in hardware (new servers that enable hardware virtualization to compose logical servers transcending physical boundaries), software (operating systems that enable composition of virtual services on virtual servers transcending geographical boundaries) and service creation, assurance and delivery platforms that enable self configuring, self healing and self managing workflows that are massively scalable and globally interoperable.  This is reminiscent of the old telecommunication model where network intelligence using service aware hardware platforms provided Pretty Amazing New Services (PANS) as Nicholas Negroponte from MIT had predicted in the 1980s.

Will computing clouds offer a new opportunity for the Japanese management with a second lease on global markets to use their core competence in telecommunications, server, networking and storage hardware technologies?  While R&D organizations like Bell Labs have been decimated by free market forces in the West, the Japanese have managed to preserve their core competencies in Telecommunications and IT hardware and software as institutional knowledge as opposed to individual based knowledge.  However, institutional knowledge has to break through the silo organizational boundaries for it to be useful.  Bringing together expertise from telecommunications and IT hardware and software to architect and design new computing clouds that are massively scalable, globally interoperable and provide telecom grade “trust” poses a challenge.  It requires core competence that transcends hardware, software, telecom, IT and chip boundaries.  True virtualization must go beyond current efforts to put lipstick on x86 architectural shortcomings.  Current server centric bloated operating systems must become lean and network centric.  Managed distributed computing models must evolve to create next generation managed distributed workflows that optimize shared logical resources.  As one Silicon Valley Venture Capitalist put it, “Ninety percent of the VCs in the valley will not understand what telecommunications knowledge has to do with data centers.”   Most of this understanding in the west is retired, dead or scattered by short term profit motives of free market forces.

This may just be what the doctor ordered to change the mood in the Japanese Karaoke bars!  Clouds and the moon have a special place in Japanese Enka, although the older generation of managers today lament that the younger generation is more comfortable singing “I left my heart in San Francisco” than “kasumi ka kumo ka”.  Is the current Japanese management up to the new computing cloud challenge?  Who will be the next Sekizawa or Sekimoto who will lead the next generation computing clouds?  I am looking for input, comments and collaboration and invite anyone with appropriate insight to participate in an update to my thesis of almost twenty years ago.

[1]Lyne, Jack. “Fujitsu PC Corp. CEO Akio Hanada: Coming to America . . .And Just about Everywhere Else” 1996,  http://www.developmentalliance.com/docu/pdf/43354.pdf

[2]In 2006, then new President of Hitachi who came from their Telecommunication division warned the employees that they underestimated the Silicon Valley startup Cisco and not to make a similar mistake again while setting the new goals for its divisions supporting IT and Telecommunications infrastructure