Pacific Overtures

IBM was taken aback early this year when a longtime customer, Massachusetts Mutual Life Insurance Co., bought a brand-new Amdahl 470-V-6 mainframe computer for its Springfield headquarters. The computer, developed by ex-IBM Scientist Gene Amdahl, was manufactured by Japan's Fujitsu Ltd., to which the cash-strapped designer had turned for assistance. Fujitsu now owns some 30% of the Amdahl Corp. of Sunnyvale, Calif. "The technology is ours, and the marketing know-how is ours," insists Amdahl, whose computer cost Mass Mutual $5.5 million, or $1.3 million less than its IBM counterpart, the model 370. "In no way is this a Japanese foot in the door."

That is debatable. In an effort to challenge the American hegemony in the global computer market, the Japanese government has lavished about $3 billion in subsidies upon local computer makers over the past dozen years and has persuaded the six major companies to team up for research and development. The result of all this effort: many experts believe that Japan is now nearly on a par with the U.S. in computer hardware, though still five years behind in software. "The Japanese are today second only to the U.S.," says an American Government official, "but ten years from now, the U.S. may not be first any longer."

The Japanese computer makers' principal sales targets so far have been industrializing countries in Eastern Europe, Latin America, Africa and Asia. But that could be only the beginning. The Japanese, who refuse to divulge the volume of their computer exports, are supremely confident that they will eventually offer real competition in Western Europe and the U.S. too. The Spanish government, for example, has started a joint venture with Fujitsu; their first product will be small computers to be designed in Japan but made and sold in Spain.

Large Scale. At present all the Japanese firms except Fujitsu face restrictions on their markets because their technology is licensed from American manufacturers. But the Japanese government, to keep abreast of IBM's imminent "fourth generation" of computers, has declared the development of Very Large Scale Integrations--the technical heart of the next generation of computers--a "national project," and has pledged $850 million to see it through. "There has been the feeling that the Japanese are not capable of producing anything original," says William R. Leitch, a vice president of International Data Corp., a computer-industry research firm in Waltham, Mass. "But the investments in research are going to pay off. The Japanese did a bang-up job with their steel and auto industries, and we think there is a potential in their computer industry."

Some computer-industry analysts doubt that the Japanese can set up the worldwide marketing and customer-service networks without which the computer business cannot function. But even that hurdle is surmountable. This summer National Semiconductor Co. is expected to announce plans to market and service a new Japanese computer in the U.S., thus offering corporate customers yet another alternative. "The Japanese have a lot of patience and plan way ahead," says a Wall Street computer watcher. "They are going after the FORTUNE 500 companies--and they just may get them."

This file is automatically generated by a robot program, so viewer discretion is required.