Episode 23 The battle with Microsoft Word began

Resentment toward the “unfair business practice”
Ichitaro’s market share gradually declined

Following the release of Ichitaro Version 4, which suffered from a bug problem in the program, Ichitaro Version 5, released in April 1993, was our confident work as the culmination of our word processing software.

The numbers proved that this was no mere overconfidence on our part. Within one week of its release, Ichitaro Version 5 sold 100,000 units, making it the first major hit in the history of the Japanese computer industry.
However, times were about to change drastically.

The month after we released Ichitaro Version 5, Bill Gates, then CEO of Microsoft Corporation in the U.S., visited Japan and made a major announcement to the world about “Windows 3.1”, the basic software operating system. He confidently declared, “I believe that within the next 18 months, all personal computers will be Windows-compatible.”

At this point, however, we still did not consider them to be a significant threat to our company. This was because we did not find Microsoft’s Japanese input software easy to use.

The situation began to change with the advent of “Windows 95” launched in November 1995 in Japan. Since this product was equipped with Internet Explorer, various media reported extensively on its launch day as many people crowded Akihabara to buy the product.

That was the beginning of the battle between Ichitaro and “Microsoft Word”. Reportedly, Gates named JustSystems as his “only rival in Japan”. The subsequent release of “Word 97” had more enhanced Japanese language functions, including vertical writing, and it was clear that they were trying to grab our market share.

Regarding Microsoft, I have something on my mind. They required PC manufacturers to sell Microsoft Word, which still had a small market share at the time, as a bundle when they installed Windows. Their intention to exclude Ichitaro from the market was clear.

This makes it virtually impossible for PC manufacturers to sell a combination of Ichitaro and Microsoft Excel, for example. Following the U.S. Department of Justice, the Japan Fair Trade Commission pointed out the problems with this cross-selling business practice and, in November 1998, ruled that Microsoft had violated the Antitrust Law by effectively forcing tie-in sales of Microsoft Word, and issued a cease and desist recommendations.

However, the fact that Antitrust Law violations have been pointed out did not help us much. While we resented the unfairness of Microsoft’s approach, we had no choice but to take practical countermeasures.

Therefore, I launched a “segment strategy” and targeted schools and municipalities. My intention was to secure our market share by providing meticulous support service unique to a Japanese company, which is something Microsoft would not be able to do.

“Ichitaro Smile” was released for elementary schools in 1999, which included various functions designed to be useful in school classes, such as a “Happyo Meijin (or, Master of Presentation)” function to support classroom presentations by children, a kana-kanji conversion dictionary for different grades, and a drawing tool. “Ichitaro Smile” was repeatedly upgraded and eventually became the software of choice for 85% of public elementary schools in Japan.

In addition, the company’s sales to the public sector have also been well received, thanks to the restructuring of our sales structure.

Still, Microsoft Word, marketed in combination with the OS, was a threat to us. Although Ichitaro’s popularity in the stores was strong, it gradually lost market share as Windows’ market share grew. This was followed by a period of severe trials and tribulations for myself and Hatsuko, Managing Director, as well as our employees.

The launch of “Windows 95” attracted a great deal of attention (Akihabara, Tokyo, November 1995).