Establishment of Japan Electronic Computer Company(JECC)

Published on Mar. 18, 2020
Last updated on May 10, 2024

Japan Electronic Computer Company(JECC) was established in August 1961 as a national policy concern that handled rentals of electronic computers for seven manufacturers — Oki Electric, Tokyo Shibaura Denki(Toshiba), NEC, Hitachi, Fuji Tsushinki Seizo(Fujitsu), Matsushita Electric Industrial, and Mitsubishi Electric. The company was capitalized equally by the Japanese government and the seven manufacturers. Although the rental business required enormous funds, JECC was able to secure systematic funding through syndicated loan from the Fiscal Investment and Loans, commercial banks, trust banks, and life insurers.

Domestic manufacturers, who were at the time fighting to keep up with overseas companies in the Japan market, recognized the necessity of a rental strategy like that adopted by IBM Japan. The existence of JECC, which covered the reserve fund needed for the rental business, was very helpful for the manufacturers, who were hard-pressed just to raise development fund. The rental system also facilitated the computer sales more than the sell-out, because users could obtain computers with a small initial budget.

The rental process was quite simple: the user wanting a rental would contact JECC, which would buy the computer from the manufacturer and rent it to the user. Once the initial rental term of one year was over, the user could return the rental computer at any time with three months’ prior notice. Manufacturers took back the returned computers at remaining book value.