Toward the Realization of Ubiquitous Society

NEC J. of Adv. Tech., Winter 200592

From the Keynote Speech at C&C User Forum 2004 (2004/12/01)

Toward the Realization of Ubiquitous Society

By Akinobu KANASUGIPresident, NEC Corporation

*This article is based on the digest of the keynote speechgiven at C&C User Forum 2004 on Dec. 1, 2004, and hasbeen edited with the cooperation of the secretariat ofAkinobu Kanasugi, President of NEC Corporation.

1. Most Advanced Ubiquitous Environment inthe World

We have already discussed much about the Ubiqui-tous Environment and now we would like to reviewwhat exactly “Ubiquitous” is. “Ubiquitous” is charac-terized by the possibility of connecting with an object,or “anything.” This is in addition to other propertiesoften spoken of, such as “anytime,” “anywhere” and“anyone.” Moreover, we must create an environmentin which these properties can be enjoyed “worldwide”(Fig. 1)

As people referred to the year 2004 as “UbiquitousYear One,” an environment deserving of the name“ubiquitous” is actually being developed.

One of the technologies playing an important rolein the construction of the ubiquitous environment isthe mobile phone, which is the ubiquitous tool that ismost familiar to us (Fig. 2). In Japan the number ofusers now exceeds 80 million about 90% of the setsincorporate an Internet connection mode such as “i-mode,” and about 60% of them incorporate a digitalcamera. 3G mobile services have gained about 6 mil-lion subscribers in only about half a year and nowhave a market share of about 30%.

The functions of the mobile phone are undergoingcontinuous evolution. For instance, the new “i-modeFeliCa service” of NTT DoCoMo Inc. allows your cashto be input and enables payments via a mobile phone.The service is used in various services including pay-ments at automatic vending machines and for elec-tronic ticketing as well as in credit transactions.Functions utilized in these services include thecontact-less IC card function, credit function, e-money function and bi-directional communicationswith POS, automatic vending and check-in machines

and the use of these advanced functions are expand-ing more and more.

The second important technology that implementsthe ubiquitous environment is the wireless broad-band technology (Fig. 3).

The wireless broadband technology is increasingits speed, coverage and mobility, and the high-speedwireless broadband technologies such as 4G andIEEE802.20 will bring about the convergence of themobile phone and wireless LAN communication inthe future.

For the fixed phone network, the number of broad-band contracts in Japan has exceeded 16 million inAugust 2004, the household penetration rate is morethan 30% and the monthly communication fee is thelowest in the world (Fig. 4).

What is expected to grow in the future is the next-generation network based on “Optical.” According tothe mid-term management strategy announced in No-vember 2004, NTT Group will invest 5 trillion yen in

Photo 1 Akinobu KANASUGI during speech.

NEC Journal of Advanced Technology, Vol. 2, No. 1 93

From the Keynote Speech at C&C User Forum 2004

order to shift 30 million customersfrom the existing metal wire andfixed telephone network to optical fi-ber access and next-generation net-work services by 2010 and will even-tually turn all of its 60 million fixedphone customers to optical ones. Thismeans that the next-generation IPnetwork will form the ubiquitous net-work as an infrastructure for all ser-vices. When this leads to the conver-gence of networks, between voice andnext generation IP and between fixedand mobile, the application of infor-mation technology in the serviceswill be more extensive than ever.

In fact, web-based business isgrowing rapidly thanks to its handi-ness, fixation of data communica-tions rate and broadband communi-cation which allows the pictures ofmerchandises to be browsedsmoothly. Shopping via the mobilephone is also growing, and theInternet-order businesses are reallyhot as seen with the annual grossmerchandise sales of “Rakuten” thathas exceeded 100 billion yen. The B-to-C business is expanding smoothly.

The third technology contributingto the development of the ubiquitousenvironment is that supporting thedigital home appliances (Fig. 5). In2003, 1.96 million DVD recorderswere shipped, achieving an annualgrowth of 315%. Other digital appli-ances including flat screen TVs, digi-tal cameras and digital video cam-eras will also form the ubiquitous en-vironment when they are connectedto the network.

The fourth technology is that ofautomobiles (Fig. 6). Networking ofautomobiles has been advanced withthe ETC, ITS and VICS as well as thecar navigation systems. Japan has70 million automobiles and they areexpected to play an important role inthe creation of the ubiquitous envi-ronment.

Japan is in a position close to theubiquitous society under the leader-ship of the world’s most demanding

Fig. 1 What is “Ubiquitous”?

Fig. 2 Preparation of ubiquitous environment (1) mobile phone.

Fig. 3 Advance of wireless broadband technology.


consumers and the preparation of infra-structures under the e-Japan Strategy.The future topics for Japan will be how tomake use of the ubiquitous environmentand how to create new services and newadded value based on it.

2. From the Ubiquitous Environmentto the Ubiquitous Society

Now let us anticipate how the ubiqui-tous society will be.

For the new services oriented to thehousehold and consumer markets, contentdistribution services will extend the scalebacked by the broadband communications(Fig. 7). For example, the music downloadservice site “Mora” currently distributesabout 70,000 music selections to PC users,but it will increase the scale of distributionto 150,000 selections by the end of March2005. This site also provides music down-load services to the owners of network-compatible home appliances through amusic distribution infrastructure called“Any Music”. “Any Music” is a companyestablished jointly by Sony Corp., PioneerCorp., Sharp Corp. and Kenwood Corp.,and in May 2004 has started an online CDsales service in a tie-up with FM broad-casting stations.

For the implementation of ubiquitoushomes, Matsushita Electric Works, Ltd. isexperimenting with the “Home Exchange(HX)” featuring IPv6 compatibility.

An example of a new service that tar-gets the “homes” of telecommunicationcarriers is the “FLET’S PHONE” of theNTT East Japan and West Japan Corpora-tions. This service includes the IP-TVphone communication service, Internetservice including mails and websites, andhome networking for connection withhome appliances. The phone-internet-broadcasting converged service includesthe distribution of broadcasting and VODcontent through broadband dedicated ter-minals and many communication carriersare also providing this service.

Meanwhile, the governmental IT strat-egy has advanced from the “e-Japan Strat-egy” to the “e-Japan Strategy II” and isexpected to convert into the “u-Japan”

Fig. 4 Preparation of ubiquitous environment (2) broadband.

Fig. 5 Preparation of ubiquitous environment (3) digitalhome appliances.

Fig. 6 Preparation of ubiquitous environment (4) automobiles.



Strategy aiming at the realization ofa ubiquitous society in which net-work connection is available for “any-one at anytime and anywhere” (Fig.8)

The preparation of the infrastruc-tures of the e-government and e-municipality has already been com-pleted, together with administrativeagency network and the infrastruc-tures for the authentication of indi-viduals, business corporations andadministrative institutions.

The ubiquitous society is sup-ported by information security. TheJapanese Government therefore hasestablished the “Information Secu-rity Policy Conference (tentativename)” and “National InformationSecurity Center (tentative name)” inorder to review the system for theenforcement of information securitypolicies in general and to enhancethe information security measures ofthe government.

3. Private Businesses’ Efforts forthe Active Utilization of “Ubiq-uitous”

I will explain the orientation of theapplication of “ubiquitous” from thethree viewpoints of “enhancement ofcustomer relations,” “real-time man-agement” and “creation of new busi-nesses” (Fig. 9).

(1) Enhancement of Customer RelationsWhen broadband communication is used in cus-

tomer relations, for example when it is applied to ahouse remodeling company, the sales personnel canuse it when giving advice on the selection of construc-tion materials or making inquiries on available prod-ucts (Fig. 10). It can also show to the client on a PC,the actual imaging of the client’s request or views ofthe room.

In the case of the NTT DIRECTORY SERVICECo., which builds Japan’s largest-scale IP contactcenters with 2,300 operator seats, it has reduced thecommunication costs by adopting the IP phone, ex-tended the services and arranging a system that canbe enhanced flexibly. It manages 44 centers in 23locations all over Japan integrally from a single data

Fig. 7 New services for household/consumer markets.

Fig. 8 IT policies for the realization of the ubiquitous society.

Fig. 9 Three viewpoints of the use of ubiqui-tous infrastructures.


center.With regard to cases that attempt

to enhance customer relations withthe broadband network, a mecha-nism for feeding back customer andmarket information to the related in-house system will be built using thenext-generation CRM system (Fig.11).

(2) Real-Time ManagementReal-time management is imple-

mented by identifying the customerand market trends in real time, en-suring flexibility and speed in meet-ing changes in the main office, visu-alizing the supply chain and increas-ing its speed (Fig. 12).

An example of work style innova-tion based on a broadband office canbe seen in the Broadband SolutionCenter of NEC. This office has seatsfor only 70% of the total employees,and the remaining 30% of them areexpected to access the office securelyfrom outside. Also, a paperless sys-tem, free desk system and web con-ference system are introduced in or-der to achieve a 75% reduction in theamount of photocopying and a 70%reduction in the number of meetings.The Broadband Solution Center wonthe “Nikkei Sangyo Shimbun SpecialAward” in the “2004 NikkeiMonozukuri Grand Prix.”

For the use of mobile communica-tion for improvements in efficiency,there is the “UNIVERGE FOMA interlinked solu-tion,” which is a mobile centrex allowing a singleFOMA mobile phone set to implement a “my office”anywhere, whether it is outside or inside the office.The FOMA N900iL set can easily implement a “myoffice” because it can be used as a wireless extensionline of wireless LAN in the office at the same time asa FOMA cellular phone outside the office (Fig. 13).

For the use of the RFID, there is an example of itsuse in a PC production site. NEC Personal Products,Ltd. has previously been reading 80,000 barcode readoperations manually. When this workshop was auto-mated with the RFID, the reading work was able tobe eliminated, leading to an improvement in produc-tivity by more than 10% at the same time as animprovement in quality.

Fig. 10 Application of broadband in customer relations.

Fig. 11 Enhancement of customer relations with broadband network-ing.

Fig. 12 Ability to respond to charge supportsreal-time management.



The introduction of RFID wasstarted from logistics and asset man-agement and is expected to be ap-plied to the management of “allitems” in the future (Fig. 14).

(3) Creation of New BusinessesThe creation of new businesses is

possible for example by the conver-gence of broadcasting and communi-cation (Fig. 15). NEC has collabo-rated with the TV Asahi Station inorder to implement a bi-directionalcommunication service involving550,000 online viewers in anaudience-participated IQ test pro-gram “Test The Nation.”

For the collaboration between dif-ferent business fields based on the Mobile FeliCaservice, NEC has developed “Light Holder” thatoffers an infrastructure for an electronic ticketingservice. This middleware enables the connectionof a coupon service between stores of differenttypes and expands the potential for acquiring newcustomers.

The Japanese Ministry of Internal Affairs andCommunications estimates that the scale of theubiquitous network-related market will be 87.6trillion yen in 2010. It also estimates that theripple effect on all industries will be as high as120.5 trillion yen (Fig. 16).

The efforts being made by private businessesare expected to promote innovations from thethree viewpoints of “enhancement ofcustomer relations,” “real-time man-agement” and “creation of new busi-nesses” and to be accelerated by theubiquitous environment. In otherwords, this is the acceleration ofmanagement innovation by informa-tion and communication technology.

From the viewpoint of the infor-mation systems department, theabove facts mean the importance ofthe following points.

· Positive use of the broadband net-work:Reduction of communication costsby the promotion of the IP phone.

· Promotion of job efficiency im-provements:

Fig. 13 Mobile communications for improvements in business effi-ciency.

Fig. 14 Main application fields of RFID.

Fig. 15 Creation of new business through the convergence of broad-casting and communication.


Work style innovation with“broadband office.” Improvementof manufacturing and processeswith RFID, etc.

· Security based on the collabora-tion of staff departments.

· Creation of new businesses (Col-laboration between different in-dustries)

In other words, it is the CIO (ChiefInformation Officer) that should playthe role of the “ubiquitous” promoterfrom the viewpoint of management.

4. NEC’s Efforts during Year2004

Finally, I would like to introducethe activities of the NEC Corporationin the past year by dividing them ac-cording to fields.

(1) R&DThis slide shows the major activi-

ties in the field of R&D. Among them,the typical example is the demon-strative experiment of the BusinessGrid at Mazda Motor Corporation(Fig. 17).

Aiming at the “enhancement ofglobal competitiveness of Japan’s ITindustry,” the Japanese Ministry ofEconomy, Trade and Industry is pro-moting the Business Grid ComputingProject as a 3-year project from fiscal2003 to fiscal 2005. The demonstrative experiment atMazda consists of the joint development of businessgrid middleware, promotion of worldwide standard-ization and other tests in a tie-up with the users,which is aimed at practical utilization. The vendorsparticipating in this experiment in addition to NECinclude Fujitsu Ltd. and Hitachi Ltd.

(2) Platform: HardwareThe released hardware includes the compact VoIP

network server model “UNIVERGE i-Express 5800/Lite,” new server product “NX7700 Series,” world’sfastest supercomputer “SX-8” and ACOS Series largemainframe server “i-PX9000.”

The line of NEC servers was made seamless up tothe high end by adopting hardware incorporatingIntel CPUs. Particularly, the blade servers and the ft

Fig. 16 Expansion of the ubiquitous market and ripple effects.

Fig. 17 Business grid demonstrative experiment at Mazda Motor Corp.

servers were enhanced with the Express Series mod-els, the mission criticality was enhanced with the NXSeries and the inheritance of user assets and opencollaboration were enhanced with the i-PX Series.

(3) Platform: SoftwareNEC systematized application-development soft-

ware “Ubiquitous Application Infrastructure,” re-leased media optimization software “MM-GATE”which received the Software Product of the Year2004, and enhanced the functionality of middlewareproduct group “VALUMO-ware.”

(4) Development of SolutionsFor the development of solutions related to broad-

band, the NEC Broadband Solution Center wasopened and the UNIVERGE FOMA interlinked



*All trademarks, product names and other proprietarytitles mentioned herein are property of each owner.

solution and UNIVERGE Mobile Solution were devel-oped. Also, an information leak prevention solutionand personal information protection solution were de-veloped as security solutions, and a platform optimiz-ing solution was developed as a platform solution.

UNIVERGE solutions for the integration of infor-mation technology and networking such as IP Tele-phony, Mobile Interconnection, Office Security and IPContact Center, are provided around the UNIVERGEIT-NW integration products (Fig. 18).

(5) AllianceNEC has established the ALAXALA Networks

Corporation jointly with Hitachi Ltd., concluded anagreement on the next-generation SCM with i2 Tech-nologies Inc., and has setup strategic capital coopera-

tion with ABeam Consulting.The cooperation with ABeam Consulting is aimed

at the provision of consistent services, from upstreamconsultation to system implementation and out-sourcing and was announced November 16.

(6) Enhancement of Business StructureIn this field NEC has established N&J Financial

Solutions, Inc. NEC Unified Solutions, Inc. and theAutomotive Competence Center.

Fig. 18 IT-NW integration: UNIVERGE solutions.

Toward the Realization of Ubiquitous Society

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