Japan’s Flect partners with Salesforce Ventures, looking ahead in IoT cloud business

Flect CEO Koji Kurokawa

See the original story in Japanese.

Tokyo-based Flect, a company providing a variety of cloud app integrations, unveiled in early November that they have secured a financial partnership with Salesforce Ventures, the investment arm of Salesforce.com (henceforth referred to as Salesforce). While the details surrounding this partnership, for example funding, remain unclear, Flect has been participating in the Salesforce1 IoT (Internet of Things) Jump Start Program for quite some time now. Additionally, this summer they will be launching Cariot, a cloud service designed to handle data processing for the implementation of the connected car, as well as the launching of multiple other cloud services that use Salesforce’s cloud are expected.

We had a chance to hear from Flect CEO Koji Kurokawa about the company’s progress as well as their future plans.

System integration business without typical hierarchy

Flect was established in 2005. At the start they were engaged in entrusted development of consumer-oriented web services for companies like Recruit Group. Taking on the agile style of app development by quickly adjusting the client’s evolving needs, Flect was designated a core partner by Recruit Group affiliated system development company Recruit Technologies. While remaining unaffected by the hierarchy of the SI (systems integrations) business world, where distribution channels are often started by contractors, you could say that Flect has realized a more flexible method of app development using the cloud.

Flect is developing apps and services using a combination of multiple cloud platforms. For example, in a case where comparative stability and reliability are needed, Salesforce’s Sales Cloud and Force.com are used. For frontend and consumer-oriented services where the flexibility to handle sudden changes in traffic is required, they use Microsoft Azure and Amazon Web Services (AWS). For Flect, because price ranges vary from one cloud provider to the next, the challenge is in taking into consideration the client’s budget concerns while finding the best possible configuration.

Koji Kurokawa shares,

For our company there hasn’t been many cases where we’ve actually stationed our dev engineers and programmers on location with a client. The orders we receive for apps are developed in the cloud, and are generally released in fifteen days to a month. Our engineers and programmers are in-house so, (compared to on-site SI) employees have access to all the technical know-how accumulated at Flect, also it’s easier for employees to share their expertise with co-workers.

An app developed in the cloud by Flect

Pioneering enterprise-oriented IoT business

Aiming to differentiate themselves as an SI, Flect has been participating in the Salesforce1 IoT Jumpstart Program since 2014, and have since become pioneers in the field, from conventional contract-based app development, to enterprise-oriented IoT services. When we refer to IoT, in general, what we typically see in the consumer-oriented business model are sold-out models of hardware and development of subscription-based services adopting SORACOM, a mobile service for IoT service developers. That is the present state of consumer IoT, but what kind of services would come from enterprise-oriented IoT?

Koji Kurokawa shares,

We developed a construction equipment IoT service for Tokyu Construction. Typical construction companies want to increase the productivity of their construction equipment. For example now, they have a sense of productivity to some extent, but they don’t have any accurate data to show for it. While there are existing IoT solutions for managing productivity being offered by construction equipment makers, with respect to temporary rentals of equipment from multiple different makers, there wasn’t any unified solution for managing productivity.

We have developed a system that can manage productivity using data uploaded to the cloud, just by attaching a sensor device containing a data SIM to the construction equipment. While using hardware from a third-party maker and SIM cards from Connexio, a mobile virtual network operator (MVNO) in Japan, we’ve been focusing on development of the cloud part.

The machine connection device installed on a piece of construction equipment.

(caption)The machine connection device installed on a piece of construction equipment.
Flect has adopted the aforementioned construction equipment IoT platform as a POC (proof of concept) model based on the client’s order. If it is determined that there is a demand, commercializing the service and outward expansion will begin. One such service developed in this way is Cariot, an optimized IoT cloud service that handles data sent from cars.

Koji Kurokawa explains,

“We even attach the device to our own cars and collect data. As for possible client use cases, it can be used for operational management of company vehicles, for example one of our customers outside Tokyo is using it to track the shuttle busses it uses to send employees from the factory to the train station, so the employees can see how many minutes until the shuttle arrives.

An app providing bus service information using Cariot

In Japan, from 2008 for new-type cars, and from 2010 for continued sales cars, it has been required that they come equipped with the OBD-II (on-board diagnostics second generation) interface, so even without a digital tachometer or special telecom device, Cariot can be integrated easily.

The Cariot API is publicly available, so users can develop various apps and services to integrate with their vehicles and personalize to their own needs.

Koji Kurokawa shares,

Besides just cars, we’re also working on POCs for IoT services that handle other types of vital data as well. I think this will result in an increase of retail trade businesses creating big data companies, and things like interdisciplinary joint business in this field. At Flect we are repeating the SI process of creating a POC, and advancing it to a service if the demand is there, and in this way we want to broaden the variety of cloud services.

In comparison to the development of consumer-oriented IoT using crowdfunding to measure the level of user interest, prototyping using that funding and then planning advancement to mass production, enterprise-oriented services that go though POC to then be brushed up and launched after having already gathered potential users may yield more control for businesses over risk. You could say that also in terms of the amount of time it takes to verify new technology, and the high level of reliability expected in enterprise-oriented services, this method of development may have some considerable advantages.

We’re looking forward to seeing what new IoT cloud services Flect develops in the future.

Translated by Connor Kirk