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Miko Matsumura may have left his position as Java evangelist for Sun Microsystems but he's still singing the same mantra. The new spin on the "network is the computer" is that the "Net is the application." Here he speaks about the rent-a-web-app doctrine, the second coming of the network computer, and BizTone.com Inc, which is pioneering the new movement on the Net.
Sept 16, 1999, Kuala Lumpur -- Miko Matsumura may not display the flamboyance that had him bungee-jump off a bridge suited up as Java's mascot Duke last year. These days, he sports three-piece suits, albeit uncomfortably, in his new corporate veneer. The boyish charm and improbable sixties hair-style is still there, but the tone is more, err, business-like.
As BizTone.com Inc's vice president of strategy, Matsumura believes his new Java-fueled vehicle has got "the right stuff" and is on the brink of stellar growth. A pending IPO, may sweeten the journey.
Simply put, Matsumura wants companies to put their cash registers on the Internet. In fact, if he had his way, he would have you throw in your ledger, accounts and entire financial documentation in there.
You would access it as you would Hotmail - anywhere - minus the security flaws of course.
"It is like putting money in the bank. Wouldn't you rather have it there than under the mattress?" he said.
The Malaysian-based software developer is pioneering the use of Enterprise Resource Planning (ERP) applications over the Internet.
Corporate customers "rent" its service on a pay-per-use basis, saving millions of dollars in up-front capital and recurring costs for upgrades, training and maintenance.
Last month, BizTone began giving away its end-to-end accounting software, BizTone Financials v1.1 on the Net for free for one year - if clients signed up for three years.
BizTone Financials is completely written in Java and delivers general ledger, accounts payable and receivable, project costing, system administration and master control data. "Small and medium-sized companies that cannot afford brand-name ERP solutions or secure data centers for their accounting needs could outsource it the same way you would a telephone or utility service," said Matsumura.
In July, BizTone broke new ground by launching BizTone.net over Singapore ONE, the island-wide broadband IT network that serves over three million individual customers and some 200,000 small and medium industries.
This is the first of many such deals that company expects in the coming years, riding on the high bandwidth wave.
"Bandwidth is doubling every year and you will soon be able to get as fast access to the Net or a remote server as you would a disk. Certain technologies already allow local area networks to reach the speed of the bus on the motherboard. What this means is, in time, whichever machine you go to you could get what you want. Users are going to want that, " said the Silicon Valley-based Matsumura.
He said the need for high-end applications on the Internet is driven by bandwidth improvements with the use of cable modems and DSL technology.
If you are to believe his vision, then the days of shrink-wrapped software are numbered. In future, businesses will either download applications for free or rent them from so-called Applications Service Providers (ASPs) over the Internet.
"The ASP market is going to be gigantic. More companies are going to rely on the Internet or secure IP-based private networks to process their data rather than buy the software themselves," said Matsumura.
Matsumura cited Microsoft's Hotmail and the Sun Microsystems' free offer of the StarOffice suite online as examples of web-based applications that are precursors to the new trend.
"I think more complex applications will be coming down that pipe and what the Net will need is a core billing infrastructure which BizTone is in a position to provide," said Matsumura.
Citing IDC figures, Matsumura says the market for complex applications over ASPs are about US$200 million next year. IDC has also predicted that the ASP market may grow to reach US$2 billion by 2003.
Matsumura believes service providers like AOL and portal players such as Yahoo may be the dominant players in the ASP market in the future.
He said the trend is already seen in the desktop applications market space where software has become a commodity. As cheaper or free substitutes to Microsoft Office such as StarOffice and Caldera begin to emerge, the ASP market will rise in tandem.
"It's economics of commodity - if you can copy and paste something it will become plentiful. I am not advocating piracy, but when there are other solutions that provide the same functionality then the value of office apps decreases to a commodity. Browsers, operating systems and upgrades have already become commodity," he said.
So how is anyone going to make any money?
Matsumura segues masterfully to Chuck D of rap group Public Enemy who posted an entire album encoded in MP3 on the Internet last year. "They told him people are just going to download the music and take all the value for free. His reply was: 'They can't download me.'
"The fundamental truth is you can never copy and paste a human. The people who will generate value are the ones that create the value," he said.
Matsumura believes the real value in software then will be in human creativity, and the people who will benefit directly are the individual creators and programmers. For it to really take off though requires a "solid transactional model" that can be built around the Internet.
"It's a huge playing field with lots of players and the largest player in the global market for ERP is 'Other', with a one-third share," he said.
Matsumura said despite the coming change, dominant ERP players like Germany's SAP and Holland's Baan may continue to service the largest companies because of their "addiction to big revenue and high margins."
"I believe the big boys can always see what is coming. Their problem is the ability to react. They may enter the lower strata of the market - but the majority of their revenue will still be at the top end," he said.
Matsumura does not believe financial and marketing muscle and existing customer base is enough. "Even if the big boys see the problem and send the money, they're not done, and they're not out of the woods yet. They have fundamental and architectural issues they have to address. The nature of who they are makes it impossible for them to change and seize the new opportunity and let go of the existing one," he said.
On possibilities that the bigger players may just buy up BizTone, Matsumura said the company has had several overtures, with one "very realistic offer" but does not believe it will happen too soon.
Matsumura believes fears of Internet security also can be likened to putting money in the bank versus under one's mattress. "People soon realized banks are more secure and better. There is very high level of security and better back-ups in the data centers that we are working with. Having such level security in remote systems is what many companies cannot afford to run themselves. In the future people will be more secure with their information being over there, than here," he said.
He said support can also be better orchestrated through the Net or better initiated when arranging site visits.
Matsumura who travelled the world spreading the Java gospel of "write-once, run anywhere", said the time for the programming language has come. "It's a mainstay in ASPs and Internet services and the top ten Internet companies are all using Java with things built in and on the Java platform.
"Java has already achieved a level of irreplaceability in the market place. There is no way that something else will come along and wrest its position. It may not have a lot of visibility in consumer desktop apps but in network-based large scale applications deployment, it is huge," he said.
Matsumura said Sun's second stab at the thin-client market with the launch of the Sun Ray 1 may lift the market for network-based applications, where JavaStations didn't.
"It is an extremely thin-client running against a local web-top server. It has greater compatibility and can run traditional applications like Netscape. I think Sun has got it right this time and it is going to have a very successful deployment," he said.
The Sun Ray allows users to access to their files and applications on the server from anywhere on the corporate network. The product is aimed at large businesses, such as call centers and financial offices and has smart card compatibility.
Matsumura said the prediction users would want a network computer without the bells and whistles of the desktop PC as first touted by Sun's Scott McNealy and Oracle's Larry Ellison is still true, except that the PC desktop became the network computer.
"The market was changing at a such a speed, that instead of US$500 network computer, you can now get a US$250 PC or free PC. Conceptually it is the same thing - an extremely low-cost or free client, and what you pay for is the Internet service. The PC has become the network computer, and the only thing that matters is the network," he said.Indeed, it's "the network" that the Matsumura is still selling. And if the Internet is the mother of all networks, then his sermons may well want to make you buy into BizTone as its rising son. (Published in CNET Asia, Sept 16,1999)
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