DIS Group Works to Expand Security Business
(from November issue of PC-WEBZINE)
November 11, 2002

Daiwabo Information System (abbreviated "DIS,"president: Mitsuru Yokoyama) is increasing the strength of its security business. While DIS has focused chiefly on software and hardware sales and network building, the company has determined that there is an urgent need for information security solutions for both business and individuals due to the popularity and expansion of the Internet and the advent of the broadband age. As a comprehensive distributor, the entire DIS group will aggressively expand its business while adding security to its lineup.
This article discusses the basic thinking behind DIS Group's expansion into the security business and introduces "D/D Project I," which plays a central role in DIS's security business.

Expansion of the Internet and the Urgent Need for Security Solutions
Sachio Takai,
a senior manager
The development and expansion of the Internet has been accompanied the byproduct of threats against security. In spite of this fact, security measures in the Japanese market are not making satisfactory progress. In fact, security measures are woefully insufficient in comparison with the rapid expansion of the Internet.

The adoption of such measures as anti-virus software and firewalls chiefly by large corporations is advanced in Japan and the diffusion of those measures is on par with the United States. However, the diffusion of IDS (Intrusion Detection System) and other more advance security measures is far behind that of the United States. When even some large corporations, which are typically the first to adopt such measures, are behind, it is not hard to imagine that adoption among small and midsize businesses, SOHOs, and individual consumers is generally overdue. Furthermore, with the coming of the broadband age, the need for security measures is beginning to shift greatly from the special applications of a few large corporations and government agencies to the general needs of the public. The currently implemented e-Japan Project is accelerating this shift.

With Over 30% Annual Growth, T'is the Season for Security
Sachio Takai, a senior manager at DIS, says the following regarding Japan's security market: "Now is the season for the security field. According to the Fuji Chimera Research Institute, the security-related transactions - including products and services - totaled 330 billion yen in 2001 and are expected to grow 30% per year, reaching 750 billion yen in 2004. It is not an exaggeration to say that security will be key factor regarding the majority of IT products in the future. That's where we come in. The DIS Group is a comprehensive distributor that can propose solutions combining products from around the world and back those products up with network construction, service, and support."

The Shift from Special Needs to General Needs Accompanying the Diffusion of Broadband Access
Let's take a closer look at Mr. Takai's idea that now is the season for the security field. Currently in Japan, the construction of intrusion detection systems (IDS) is still not common, nor is the establishment of the security policies that are a prerequisite for such systems. Thus, we are still in the process of gradually shifting from anti-virus software and other software-based measures to firewalls and other hardware-based security measures. Meanwhile, due to the progress of broadband, security measure needs are shifting from specialized needs to general needs.

In keeping with this shift, a variety of products featuring security functions are attracting attention in the current market. Examples include computers provided with identification functions, network devices with advanced encryption functions, and carrier and xSP services that have pushed security to the forefront. Firewalls costing less than 50,000 yen and low-priced packages oriented toward the client are also attracting attention as products for SOHOs and consumers. At the same time, the distribution industry is also undergoing a reorganization that includes software vendors and retail stores.

Source: Both summarize the results of a network security business survey for fiscal 2002 conducted by Fuji Chimera Research Institute.

The Strengths of DIS Group Can Be Utilized in the Security Field
In addition to being a multi-vendor, multi-field entity, DIS has the following characteristics: 1) It has sales bases throughout Japan; 2) It has a logistics network that links 12 bases from Hokkaido to Kyushu; 3) It has sales channels numbering 15,000 companies; 4) It has efficient systems, such as DIS-NET and iDATEN; and 5) It has five affiliates. DIS also boasts the number one share of the PC sales market in Japan.

Ritsumoto Yano, a former general manager of the DIS Solution Promotion Department, says DIS Group can utilize these strengths quite well in the security field.
For starters, according to Mr. Yano, DIS can utilizes its abilities as a comprehensive distributor and provide a lineup of current security items from around the world. DIS's strengths can also be applied as is to current trend toward appliance products, which are dedicated machines installed with a software product and sold as a hardware product, because such products can be provided inexpensively, quickly, and easily. It is also expected that DIS will be greatly aided by the cooperation of their retail dealers and major SI'ers who work as their partners throughout Japan on a daily basis.

Special Team "D/D Project I" as Driving Force
However, there is another important characteristic of the security business DIS Group has begun aggressively expanding. In addition to providing security products complete with the full service that DIS can offer as a comprehensive distributor, the group affiliates and system integrator DIS System Trading Company (abbreviated "DST," president: Takeo Ishimaru) can provide a powerful backup as a security SI'er and offer CSs complete with security solutions. In short, a synergistic effect will be obtained between "service distribution" and "technical combination" and various and sundry solutions complete with security features will be possible.

In order to tap this potential, a special security business team called the "D/D Project I" (project leader Yasuyuki Kani) made up of members selected from both DIS and DST was formed. The team began investigatory and research operations in May 2002 and the "D/D Project I Group" became the central entity for aggressively developing the security business in October.

Menu of Timely Security Products Kicks Off This Fall
Based on a market survey conducted by interviewing over 200 manufacturers and security SI'ers, the D/D Project I recently created a menu of current security products including numerous software, hardware, and support items all backed up by DIS's excellent service. Examples include the following: a large-scale model for government agencies, regional government bodies, and large corporations; a medium-scale model for medium sized corporations; a small to medium-scale model for small and midsize educational applications; and a low-priced model for SOHOs and individuals.

D/D Project I will continue its efforts by establishes still further security service menus for firewalls, IDS, etc., and simultaneously starting a campaign throughout Japan in which presentations will be conducted chiefly at DIS bases and partner retailers. DIS Group plans to treat 2003 as the most important year for the security business by adjusting organizational units, strengthening channels, and conducting real trials of sales plans, thus achieving numerous results. Consulting regarding the establishment of security policies for each corporation will also be an important part of the services DIS will provide.

Project leader Kani says, "The speed at which the security market changes is beyond the imagination. Therefore, we believe it is important to continuously strengthen our marketing activities, such as checking the trends of trading company channels and the trends of the consumer market, and to investigate security classification codes more closely by speeding up our analysis of buyers." Kani also says resolutely, "Based on the practical activities we have conducted in order to succeed in this project, we will set the example of how security products are sold by getting out on the front line and actually doing it."

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