Episode 25 Newly developed strategic software

Betting on the company’s fortunes, we aimed to make great strides overseas　
“xfy” received high acclaim, but the performance was sluggish due to heavy investment

JustSystems posted a recurring profit for the fiscal year ended March 31, 2004, for the first time since going public. This was the result of the company’s segment strategy of aggressively targeting schools and other specific customers, as well as the effects of personnel reductions. However, this did not change the difficult situation we were in.

By that time, Ichitaro had completely lost market share to Microsoft Word, but we had a product that would give us an advantage in regaining market share among the next generation of users. That was “xfy”.

The functionality of the “xfy” software can be summarized simply as a way to consolidate multiple pieces of dispersed information held by a client company into one. Using a programming language called “XML”, it centralizes a wide variety of corporate information, including minutes, daily reports, ledgers, websites, and sales management systems.

In fact, this was the result of our 10-year-long conception that took shape. The idea was conceived by Hatsuko, Managing Director, who heads the technical team. This concept began with the “Dynamic Document Work” that Hatsuko originally devised. Her idea was to centrally manage not only documents created by Ichitaro, but also various other documents.

The first product that gave form to this was “Ichitaro Ark,” which we released in 1999. Although the product was compatible with the international XML standard from the time of its release, according to Hatsuko, this product was not so perfect. Rather than being software for centralized management of internal information, it is more of a mere text creation software.

Through persistent improvement efforts, “xfy” is a further evolution of this software. It allows users to extract necessary information from multiple XML documents, display them side-by-side on a PC screen, and process them. Simply put, xfy was a software program that could link various types of information exchanged within a company around a single axis called “XML,” and allow clients to use it in different ways depending on their desired use.

We released a basic version of “xfy” in 2005, followed by a full-scale launch the following year. This was the software on which we staked our company’s future. At the time, when discussions on how XML could be used were gaining momentum, especially in Europe, IBM and Oracle in the U.S. were adopting XML for their databases. This is why “xfy” was also gaining attention.

Unlike our past business, which was only successful in Japan, with “xfy” we need to go international. Therefore, we launched sales offices in the U.S. and the U.K. and aggressively marketed the product from the time of its release with the intention of capturing market share worldwide. JustSystems is no longer just “the company that created Ichitaro”.

However, as it turned out, although “xfy” was highly acclaimed by some computer experts, we were unable to grow this business, contrary to our expectations.

We thought we were taking on a new world with “xfy,” but simply put, the time was not right. The performance of PCs at the time was not enough to fully bring out the potential of “xfy,” and we were also unable to fully demonstrate the advantages of using the software. We needed more time. Another reason for our defeat was that we invested heavily in overseas offices.

In the meantime, Microsoft was further consolidating its market share by targeting the office market with Microsoft Word and Microsoft Excel. Meanwhile, JustSystems’ performance, unfortunately, continued to decline. We had to realize that our options were narrowing.

These circumstances forced Hatsuko and I to make a big decision. JustSystems was launched by just two of us in the reception room of Hatsuko’s family home. With the creation of the big hit Ichitaro, we steadily contributed to the improvement of the intellectual productivity of the Japanese people. However, we had to leave this company that had been such a big part of our lives.

At the Sun Microsystems exhibition in the U.S.
(third from left is the author, in 2005)