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February 5, 2007 

 Q&A: Christos Fotiadis of ProtoGroup in Chicago on Japanese Expansion 5/30/2006
The mission of Going Global, which appears on ePrairie on most Tuesdays, is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.

CHICAGO – Christos Fotiadis is the founder and CEO of Chicago-based ProtoGroup, whose charter is to build solutions that help companies migrate applications between technology platforms.

In the past, he was an integral member of the Microsoft Consulting Services (MCS) division. Fotiadis has served in various roles focused on technology and customer and partnership development. Prior to joining Microsoft in 1997, he was the director of technology and education at Microsoft partner NewMedia in Ohio.

In part two of a three-part Q&A, Fotiadis sat down with international expert Michael Muth to discuss the organizational structure and benefits of doing business in Japan.

Michael Muth: Who are your competitors?
Christos Fotiadis: From a customer perspective, any major system integrator would be our competition. From a tools perspective, there are very few tools builders with which we compete directly. We’re asking people to take a look at a new approach toward migrations. When we designed the product, we took into mind that enterprises are going to have a lot of applications to migrate.

The whole lifecycle of application migration and integration quickly becomes a big problem that needs to be solved quickly with the least amount of pain. In the past, it was easy to install or create a new application that did some amount of productive work. Unfortunately, there wasn’t a lot of forethought from the platform management side as to what the company’s technology platform will look like in five to 10 years.

In post-2000 scenarios where a platform vendor like Microsoft doesn’t support Access 97 any more, you’d better be thinking about how to migrate any application on which business processes have dependencies. Get used to best-effort support from Microsoft (if at all). If you’re running an application on a database platform from 1997, you must keep in mind how primitive and susceptible to harm that technology was versus the versions or options currently being shipped.

Nine years may not seem like a long time, but in terms of software evolution, it’s like an entire human generation.

MM commentary: Though anything goes these days, competing with companies that can also be partners can still be tricky.

MM: Why Japan first?
CF: Japan is the second-largest economy in the world. Any company that wants to call itself a global company must have an answer in Japan. They’re an attractive market as much as here in the U.S. or in Europe because of how much they culturally embrace technology. Software aside, they create the most amazing uses for technology that I’ve seen. They evolve any particular use or application of technology to the ultimate degree.

I see embedded technology over there that I don’t see here. For instance, my mobile phone gets me on the train in Japan. I can catch a TV signal and output it onto a TV device. I can watch TV anywhere in PAL or NTSC format. It also has GPS built in – just like your car GPS – with real-time directions even while walking.

It pays for parking meters. Some of this stuff is finally coming to the U.S. Another example of infrastructure is home connections to the Internet. My friend has 100 megabits to his doorstep and this is common. Whenever I go to the Akihabara electronics market, there are always people advertising their ISPs and phones as soon as you step out of the train station. I think that one of the ISPs was even offering 150 megabits to the door.

MM commentary: It never ceases to amaze me. For as big as it is economically, Japan receives relatively little press stateside.

MM: How are you organized in Japan?
CF: We’re going to be a kabushiki kaisha (KK) incorporated as a Japanese company. The capitalization, though, comes from the U.S. It’s similar to an LLC. We have our own legal team here but we hired a Japanese lawyer there. JETRO in Japan has been an amazing resource for us. They’ve done a great job and have been able to connect me with a lot of what we need (including a panel of independent experts facilitated through them).

While JETRO Chicago opened the door for us, it has been all JETRO Tokyo. Their charter is to get business established there, which is similar to a lot of local organizations here. You saw a lot of that at the BIO show in Chicago. BIO appeared to be more of an economic development conference than anything else. JETRO wants to see businesses set up and contribute to the local economy. In some instances, we may compete with local providers, but in more instances, we’re complementary.

MM commentary: Though I haven’t worked with them directly, my impression is that JETRO is much more proactive than most other government-supported economic development organizations.

MM: Where is your Japanese office?
CF: It’s in Tokyo right down in Toranomon (the Minato-ku ward), which is the business district where a lot of the government is located. I’d liken it to the north loop right before the river in Chicago. It means a lot to be in Tokyo and in the right spot.

I want to make sure we’re portraying the right image and that address does this for us. We also have a lot of partners that are close to us from that location and it’s convenient to the subway. You don’t want to be too far (more than a five-minute walk) from a subway stop. People are on the subway a lot over there – getting from place to place throughout the day – so the easier we can make it the better.

MM commentary: Even in technology, location does make a difference.

MM: How do you compete in Japan?
CF: In terms of the market, we compete the same way we do in the U.S. or in the European Union. In terms of socially and how we compete with other technology vendors and service providers, we are still discovering how to best to this in Japan.

It’s nothing like in the U.S. or the European Union and we know this is where a lot of western companies fail. It’s a unique challenge because a certain expected behavior is so interwoven into everything in Japan from products to laws to company etiquette and messaging. Getting that just right is going to require a lot of thought and work.

MM commentary: Like Donald Rumsfeld said, it’s the unknown unknowns you fear most. The first step in any 12-step program is recognizing you have a problem. At least he realizes they’re not there yet.

MM: How do you promote your business in Japan?
CF: Our business model leverages partnerships. We look to our partners to promote us. Initially they could do a much better job of that in Japan than we could. Our partner/distribution channel will have the reach to scale. It’s through partners that we’ll get the reach we need. We are partners with Microsoft and in their program. Microsoft is pretty important for us.

MM commentary: Though this is true, there are risks with leaving all promotion with partners such as a lack of control over various issues.

MM: How prevalent are Lotus Notes, Microsoft Access and Microsoft .NET in Japan?
CF: Aside from localization, they are not really different than what has been happening in the U.S. or Europe. The products pretty much work the same regardless of where they’re deployed and it comes down to how much companies embrace the technology. In Japan (just like elsewhere in the world), there is a lot of penetration of Microsoft Access, Lotus Notes, Microsoft .NET and other technologies. We’ll focus on the enterprise and these technologies are pretty common there.

MM commentary: Those providers have invested tons in getting the localization right so their products do work comparably in most countries.

MM: What application migration and security problems do you run into in Japan?
CF: Companies over there have the same challenges we have in the U.S. From the technology side, it’s a localization issue that can add a fair amount of work to the task.

MM commentary: Localization can be even more difficult for double-byte character set languages like Japanese.

MM: Who localized your Web site for Japan?
CF: We did all the coding internally. Our contractor did our word translations and we plug those strings in the right place. Japanese is a very difficult language to translate. Their sentence structure is different as is the way they express thoughts and ideas. There are things we use that aren’t in the common language there. Having a really good translator who understood technology was a key item for us.

MM commentary: It’s important to internationalize first (i.e. create a common structure, look, feel and simple language) and then localize into specific destinations.

MM: Is it more than just one page?
CF: There’s going to be a lot more pages added and localized. People we’re engaged with see a lot more than what’s on the Web now. The site will change significantly once we have determined just how we’re going to say what we’d like to say.

MM commentary: Though it’s laudable to have a page translated into Japanese because there’s only one page up now, Japanese visitors might perceive that ProtoGroup is not serious about the Japanese market. Sometimes all or nothing is better than a little bit.

MM: How is your IP protected in Japan?
CF: We have pretty aggressive agreements in place and police them as much as possible. Part of our product is delivered online, so like Salesforce.com or any Web service, you get shut off if you don’t pay the bill.

MM commentary: My impression is that IP protection is far better in Japan than in other parts of Asia. We’ll have more about this in future columns.

MM: Does Japanese progress in broadband and mobile connectivity help you?
CF: One instance I can think of is us being able to leverage the infrastructure to create mobile versions of legacy systems that we migrate. Applications that today require you to use a laptop can be migrated to a mobile phone with a 3G connection.

MM commentary: If you want to see the immediate future of mobile technology, visit Japan.

Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muth’s full biography.

Previous Columns:
Q&A: Christos Fotiadis of ProtoGroup in Chicago on Compliance, Partners (5/16/2006)
Q&A: Lakeview Technology Founder Bill Merchantz on Trade Shows (4/4/2006)
Q&A: Lakeview Technology Founder Bill Merchantz on International Partners (3/28/2006)
Q&A: Lakeview Technology Founder Bill Merchantz on Overseas Expansion (3/7/2006)
Q&A: Steven Ganster of Technomic Asia on Chinese Readiness (2/7/2006)
Q&A: Steven Ganster of Technomic Asia on Chinese, U.S. Differences (1/24/2006)
Q&A: Steven Ganster of Technomic Asia on Approaching Chinese Expansion (1/17/2006)
Q&A: George Deeb, CEO of iExplore in Chicago, on the Internet Advantage (11/22/2005)
Q&A: George Deeb, CEO of iExplore in Chicago, on Competitive Distinction (11/15/2005)
Q&A: George Deeb, CEO of iExplore in Chicago, on Online Adventure Travel (11/8/2005)
Q&A: Steve Pazol, CEO of nPhase in Chicago, on International Business (8/30/2005)
Q&A: Steve Pazol, CEO of nPhase in Chicago, on Outsourcing to India (8/23/2005)
Q&A: nPhase CEO Steve Pazol on Machine-to-Machine Service Industry (8/17/2005)
Q&A: Daitan Labs Founder James Bergamini on Brazilian Workers (8/2/2005)
Q&A: Daitan Labs Founder James Bergamini on Brazil’s Silicon Valley (7/26/2005)
Q&A: Daitan Labs Founder James Bergamini on Next-Generation Telecom (7/19/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Asian Advancement (6/28/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Findings From Asia (6/14/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Analog, Smart Buildings (6/7/2005)
Q&A: Manpower CEO Jeffrey Joerres on Changing European Regulations (5/31/2005)
Q&A: Manpower CEO Jeffrey Joerres on Comparison Between U.S., France (5/17/2005)
Q&A: Federal Reserve Bank’s William Testa on Cautionary, Hopeful Prospects (5/3/2005)
Q&A: Federal Reserve Bank’s William Testa on Chicago Business (4/26/2005)
Q&A: Federal Reserve Bank’s William Testa on Headquarters, Exports (4/19/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Keys to Outsourcing (4/5/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Outsourcing in India (3/22/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Offshore Outsourcing (3/15/2005)
Q&A: CEC’s David Weinstein, Kapil Chaudhary on International Experience (3/1/2005)
Q&A: CEC’s David Weinstein, Kapil Chaudhary on Internationalization (2/22/2005)
Q&A: Brian Briggs of Acclaro on Whether to Outsource Localization (2/8/2005)
Q&A: Brian Briggs of Acclaro on the Complexities of Localization (2/1/2005)
Q&A: Brian Briggs of Acclaro on International Localization Services (1/25/2005)
Q&A: RPX’s Robert Okabe, IEC’s John Janowiak on Global Events (1/11/2005)
Q&As: FastRoot’s Terry Howerton, Doug Cogswell of ADVIZOR Solutions (1/4/2005)
Q&A: Opportunity International’s John Kamperschroer on Partnerships (12/21/2004)
Q&A: Opportunity International’s John Kamperschroer on Technology (12/14/2004)
Q&A: Opportunity International’s John Kamperschroer on Innovative Financing (12/7/2004)
Q&A: IEC Senior Director John Janowiak on Trade Show Realities (11/16/2004)
Q&A: International Engineering Consortium Senior Director John Janowiak (11/9/2004)
Q&A: Founder John Lee of Chicago’s Hostway on Web Site Localization (11/2/2004)
Q&A: Founder John Lee of Chicago’s Hostway on Growing Globally (10/26/2004)
International M.B.A. Guide to Moore School of Business, Thunderbird (10/12/2004)
Your International M.B.A. Guide to Northwestern, Loyola University (10/5/2004)
Entrepreneur’s Guide to International M.B.A. Programs in Chicago (9/28/2004)
Q&A: Prairie Angels Founder Bob Okabe on Diction, International Cities (9/7/2004)
Q&A: Prairie Angels Founder Bob Okabe on International Adaptation (9/1/2004)
Q&A: Prairie Angels Founder Bob Okabe on Managing U.S. Subsidiaries (8/24/2004)
Q&A: Origin Ventures Founder Steven Miller on Investments, Angels (8/17/2004)
Q&A: Origin Ventures Founder Steven Miller on the Canadian Way (8/9/2004)
Q&A: CPCP Founder David Baeckelandt on Multilingual Importance, Mentoring (8/3/2004)
Q&A: CPCP Founder David Baeckelandt on Japanese Disclosure, Due Diligence (7/27/2004)
Q&A: Chicago Pacific Capital Founder David Baeckelandt on Overseas Funding (7/20/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering (7/13/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on BP, AstraZeneca Wins (7/6/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on Global Software (6/29/2004)
Q&A: CEO Terry Howerton on Why Chicago, Ukraine Made FastRoot (6/22/2004)
Q&A: FastRoot CEO Terry Howerton on Blended Chicago Approach (6/15/2004)


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