TOKYO (02/08/2000) - The data center market in Japan, which hardly existed six months ago, has become increasingly crowded in the last two months as major U.S. data center operators and local players alike have announced plans to enter the market.
Internet Initiative Japan Inc. (IIJ) and Crosswave Communications Inc., in which IIJ holds a 40 percent stake, today became the latest companies to join the fray as the two announced plans to jointly build a string of Internet data centers across Japan. The companies plan to open centers in Tokyo and Osaka in April this year and follow with centers in Sapporo, Sendai, Nagoya and Fukuoka by the end of the year, they said in a statement.
Japan Telecom Co. Ltd., a wholly-owned unit of Jens Corp., and Intelligent Telecom Inc., yesterday announced plans to establish an Internet data center service aimed at corporate users and Internet service providers. The first data center will be opened in Tokyo in May although plans call for a second center in Osaka in August and a second Tokyo center in October, the three companies said in a statement.
Internet data centers are secure locations with high bandwidth connections to the Internet at which companies can contract to have their Internet servers located. For companies locating their computers in the data center, the service often means a higher level of reliability and security than if they were housed on-site at the company's own offices.
Driving the string of announcements is an urge to get into the market while it is still evolving. In the U.S., where the market is already well developed, operators are reporting very strong growth as Internet traffic increases and companies become more dependent on their Web sites and Internet systems for business.
When Exodus Communications Inc. President and Chief Executive Officer Ellen Hancock in January was in Tokyo to announce details of her company's plans for Japan, she reported the U.S. business has been growing quarter-on-quarter by around 40 percent for the last 12 quarters and was worth US$67.6 million in the third quarter of 1999, up from $1.1 million just three years earlier. [See "Exodus, Nomura Research to Build Japan Data Center," Jan. 18]The two most recent announcements are the first to include plans for multiple data centers. Having multiple centers enables companies to also sign contracts for in-country back up for the data center services.
While outages are rare at such centers, because of a high degree of redundancy built into most systems, it is difficult to provide complete protection against major natural disasters -- something that is important in an earthquake-prone country like Japan.
In late January, Asia Global Crossing Ltd., an affiliate of U.S.-based data center operator GlobalCenter Inc., and Tokyo-based Internet Research Institute Inc. announced plans to form a joint venture to build an Internet data center in Japan. [See "Asia Global Crossing, IRI Tie on Japan Data Center," Jan. 27.]Earlier in the same month, U.S. data center operator Exodus Communications also unveiled plans to build a data center with Nomura Research Institute Ltd. At the time, Hancock said the company was considering a second center in Japan but was not in a position to announce anything at that time.
The first major data center announcement was made in mid December, 1999, by U.S.-based AboveNet Communications Inc., which plans to open a Japanese data center in April this year with Marubeni Corp. and Trans Cosmos Inc.
IIJ, in Tokyo, can be found online at http://www.iij.ad.jp/. Japan Telecom Co.
Ltd., also in Tokyo, can be found online at http://www.japan-telecom.co.jp/.