AMI-Partners: Japan MBs Need Support and Service for Open Source.

--Japan MBs are more interested in deploying open-source software than their U.S. counterparts, but are under-served--

NEW YORK -- Medium businesses (MBs have 100-999 employees) in Japan are showing latent potential to drive usage of open-source software, particularly on the server database scene. Open-source software has been gradually gaining ground in Japan, driven mainly by the needs for cost-effective middleware for large corporations to enhance the operation of complex and extensive systems. MBs are the next frontier.

According to the latest Japan Medium Business Survey conducted by New York-based Access Markets International (AMI) Partners, Inc., Japan MBs have are ready to embark on the deployment of open-source server databases. The course for adopting open-source software starts with an operating system such as Linux, then advances to mission-critical applications such as middleware and server database. Linux and open-source middleware is used by 18% and 12%, respectively, of Japan-based MBs. Such figures are comparable with their U.S. counterparts and higher than MBs in France and the U.K. However, in terms of the usage of the open-source server database such as My SQL, Japanese MBs are lowest in the developed world, at 5%, as compared to an adoption rate of between 13% and 40% among advanced markets in the US, Europe and the Asia-Pacific region outside of Japan.

Why are Japan MBs lagging behind in the adoption of open-source server database? "One inhibitor is their low usage of external services for software support," says Yuki Uehara, Research Analyst at AMI-Partners. "Open-source software is a cost-saving alternative to proprietary software. However, open source requires extensive support and maintenance for reliable operations. This can be an issue with MBs, especially in Japan, as there is a persistent shortage of qualified support staff."

Compared to Japan, German MBs are the highest in overall deployment of open-source software in the developed economies, and the highest in the usage of external software support service. That's because open-source software deployment and software support service usage have a strong correlation.

The other inhibitor is a widespread concern about performance and functionality of open-source software. Systems integrators in Japan are less willing to recommend and implement open-source applications because they are often required to guarantee system performance after installation. "Any compatibility issues and performance failure will result in SIs carrying the burden," Ms. Uehara says. "That's why SIs take the safer option and recommend applications such as Microsoft and Oracle. The cost for deploying such solutions, however, is quite high for cost-sensitive MBs in Japan."

Open-source software has the potential to be a powerful driver not only for software adoption among Japanese MBs among which overall server database adoption is lagging behind from other developed countries, but also serve as a business opportunity for IT service providers to create a stable revenue stream from support and performance management services. There is a growing trend in Japan to offer extensive support services to maintain the performance of open-source software. Yet, the service is too expensive for MBs. It would be best if service providers cooperate with open-source communities to improve overall efficiency of maintenance and thus help make inroads into Japan's MB market.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence--with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.