Softbank, Avanquest form distribution venture

Softbank, Avanquest form distribution venture

Softbank and Avanquest have formed a venture to bring foreign software into Japan, and to help developers in the country sell applications abroad.

Softbank BB and the Avanquest Software group have formed a joint venture to bring foreign software products into the Japanese market, and to help developers in the country get products distributed in the U.S. and Europe.

The Tokyo joint venture, announced Tuesday, has been christened Avanquest BB and will begin operations with initial capital of US$900,000, according to the companies. Japan-based Softbank, which over two decades has expanded from software distribution and publishing to broadband services, has a 49 per cent share in the venture, with Avanquest holding the majority stake.

The Avanquest Software group, with world headquarters in Paris and U.S. headquarters in Colorado, offers marketing as well as product support and localization services to developers who want to expand internationally. The group comprises a worldwide network of subsidiaries and affiliates that offer expertise in local markets and build on relationships with distributors and retailers to offer a one-stop shop of publishing services.

Avanquest BB is not the first time the group has tried to crack the Japanese market. In early 2004, the group announced that Japanese software publisher and distributor P. & A. would become an affiliate. However, P. and A. is a relatively small, specialized company, and Avanquest officials say that Softbank will bring a much larger scope to their efforts in Japan.

"Japanese publishers are very vertical, specializing in security or graphics for example, and the market is very name-brand conscious," said Bob Lang, president of Avanquest USA "With Softbank -- because of its size and name recognition -- we have an opportunity to effectively reach out to many different types of publishers."

Avanquest BB will operate by acquiring rights to sell localized versions of products in Japan. It will provide localization services, then work with local publishers and distributors on packaging, marketing and store placement. Conversely, it will use Softbank's contacts to reach out to Japanese developers and help bring them to U.S. and European markets, Lang said. Avanquest also provides e-commerce services.

The group will focus on products, such as security and graphics products, that do not depend on cultural context, Lang said.

Individual companies in various countries have offered services similar to Avanquest's, though the group's expansion appears to have put it in a separate category of international distribution services that are geared to smaller players, notes Alastair Edwards, senior analyst with Canalys, a research firm in England, focused on IT channels.

"Big companies can do it themselves, but smaller companies need to think about not only localizing a product but also developing relationships with local distributors, which is difficult if you do not have an international presence," Edwards said. "There have been companies offering services in individual countries, but with this consolidated model it would be interesting to see what they can do especially in Asia, which appears to offer tremendous growth opportunities," Edwards said. "Of course Western companies want to get into the Japanese and Chinese markets, but it would also be interesting to see what local developers can be brought to Europe and the U.S."

Avanquest might see more competition for its services online than for brick-and-mortar stores, noted Edwards. "The types of software they seem to be focusing on are applications that consumers are increasingly getting from the Web," Edwards noted.

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