In-Depth

Profile: GrapeCity, the Bullet Train Personified

The company's diverse portfolio has a singular underpinning -- a commitment to efficiency and excellence.

• By Peggy Aycinena
• 02/01/2006

When it comes to a diversified portfolio, GrapeCity—founded in 1980 in Sendai, Japan—takes the cake, everything from educational management software to recording studios. Yet, the company's product diversity comes not through acquisitions, but out of a set of serial decisions to move into new markets, thoughtfully and one by one.

GrapeCity's story, while a classic study in careful growth and steady attention to the details of customer relationships and quality product offerings, is also a somewhat unlikely one.

In the late 1970's, a group of educators founded two private kindergartens in Sendai, 300 kilometers north of Tokyo. Within a year, they found themselves overwhelmed with the record keeping and bookkeeping requirements associated with their enterprise. Not surprisingly, they decided to purchase a computer to solve the problem, but once procured, they couldn't find any commercially available software in Japan or the U.S. to load onto their DOS-based computer that would meet their needs.

Instead, they took several of their teachers and sent them off to be trained as programmers. Within a few months, the teachers-turned-programmers developed a software package specific to the administrative needs of the two schools. Not only did the newly developed software successfully handle payroll, tuition payments, and student academic records, it also helped the administration address the strict governmental reporting obligations imposed on all private schools within Japan.

By 1980, the school administrators realized they had an authentic business opportunity on their hands. Why not package the software and sell it commercially? As it was not possible to sell software and keep that effort separate from the management of the schools, GrapeCity the company was launched. Today, the current version of GrapeCity's educational management software is the de-facto standard in Japan, in use in more than 2500 of the 10,000 private schools across the country.

But, there's more to the story.

As they overcame the learning hurdle with regards to developing, installing and marketing their own software, the management at GrapeCity decided to branch out into a different, albeit related market. In scanning the choices of products to meet their immediate development needs, the founders of GrapeCity noticed there were few Windows programming tools available in Japan—yet there was a huge demand.

At the same time, they saw a wealth of development tools coming out of the prolific Windows-based community in North America, and quickly recognized a second, significant business opportunity. GrapeCity decided to extend their portfolio of offerings into the services-centric area of software localization.

The company did not go at that effort lightheartedly. Naoyuki Baba, GrapeCity vice president, says, "For us, localization has always gone far beyond simply translating the English documentation into Japanese. The process has also included extensive testing and debugging of the software. Any product that is going to succeed in the Japanese market has to be completely stable!" he insists. "GrapeCity helps tool vendors certify that stability."

In fact, Baba reports that over the many years of localizing a wide range of Windows development tools for Japan, as many as 500 bugs have been found at a time in a single software application, and reported back to the tool vendor to be addressed and resolved. The resolution of software bugs is mandatory for any vendor who would have GrapeCity continue on with the process of offering a tool into the Japanese market.

As a result of their exacting standards, Baba says the company is now proud to hold the dominant market share in Japan, providing the premier localization service for development tools coming into the country—from a variety of global sources now, not just North America—and assuring the quality of third-party software deployed at some of the largest user locations nationwide.

Companies like Toshiba and Hitachi, according to Baba, trust GrapeCity to prepare the tools—to thoroughly "localize" the tools—and to guarantee that the products meet the extraordinarily high standards that savvy vendors know to be the hallmark of the Japanese user community.

And, Baba emphasizes, meeting those standards thoroughly and consistently is never an option, but an obligation and pre-requisite to any long-term relationship between the tool vendor and the customer in Japan. If a vendor loses the trust of a customer, it may be next to impossible to re-establish that relationship, according to Baba.

This long-term view of business relationships is more than just cultural at GrapeCity, however, it comes down from senior management at the company on a day-to-day basis. Co-founder Daniel Fanger is not only president today, he was one of the original individuals who founded the kindergartens in Sendai in the late 1970's.

Other individuals interviewed for this article, including Naoyuki Baba and Daniel Crawford, Senior Internal Consultant for International Business Development, have been with the company for the bulk of their professional lives as well. Long-term relationships are the watchword at GrapeCity.

Surprisingly enough, however, the name is fairly new. When the software company was first founded in 1980, it was known as Bunko Orient and that was the name on the door for many years. Meanwhile, the success of the company's diverse business offerings—products and services—fueled expansion over the years into a variety of markets, with both off-shore software processing facilities and sales offices around the globe.

Today, the company has 650 employees and an established presence across a spectrum of locations that range from Sendai, Kanto, Osaka, and Nagoya in Japan, to Shanghai, Xi'an, Beijing, and Guangzhou in China, New Delhi and Bangalore in India, Petaling Jaya in Malaysia, Ulaanbaatar in Mongolia (where an emerging population of very talented programmers are being developed), and in the U.S.—Kirkland, Wash., and Chapel Hill, N.C.

With that increasingly global presence, however, the name Bunko Orient became problematic. In China, BOC—acronym for Bunko Orient Company—found itself competing with the Bank of China. In India, BOI—acronym for Bunko Orient Incorporated—to most people, meant British Oil India. Clearly, something had to give and that something was the name.

So Bunko Orient became GrapeCity—a unique, even whimsical moniker for a company with a creative spirit to match its business acumen. And, with the name GrapeCity—yet another business idea was spawned. GrapeCity's newly announced Wine Studios indeed takes its name from the very concept behind the whimsy of the name of the mother company.

Daniel Crawford says, "There are a lot of recording studios in Japan. Some just rent out space. Some do animation or 3-D video enhancement. Some do audio mixing. We are launching two state-of-the-art studios that provide all of those services, plus editing and any other features required by our customers."

Naoyuki Baba adds, "The company has done a lot of research into market demand, and we have decided that a complete set of offerings is the right way to attack the market. Wine Studios will be an end-to-end set of services and facilities, so that everyone from the serious recording artists to the video buff will have access to produce fully professional content—audio or video."

Are Baba and Crawford concerned that there's little perceived overlap between software development and recording studios?

No, instead they chuckle at the idea that any disconnect exists. When it comes to meeting the customers' needs, the same business principles apply, they say—excellence, attention to detail, and long-term relationships are the secrets to success.

The founders of GrapeCity publicly align their philosophy with the spirit of the legendary Shinkansen bullet trains of Japan: fast, efficient, elegant in design, and exquisite in execution. In fact, the GrapeCity Shinkansen Process Framework is the foundation of the software products and services that the company says distinguish the organization from its competitors. The success of the company's new studio venture—like all of the previous ventures—will hinge on that same striving for excellence, says Baba.

GrapeCity may be a company with a surprisingly diverse portfolio—software development, testing, and localization, to studio recording facilities and educational management techniques—but there is one overarching concept that neatly knits the organization together. It's the concept of excellence that's more than just a concept. For GrapeCity, it's the fast track to success.