Case study - XLAB

Introduction   

XLAB is an IT company headquartered in Slovenia, with additional offices in Germany, Switzerland, and the UK. Founded in 2001 at the Ljubljana Technology Park, XLAB has since expanded into a global enterprise. It actively contributes to the European research sphere and provides services to users in more than 100 countries.  

XLAB’s core competence lies in developing and providing remote desktop software called ISL Online. This software is widely used in the helpdesk departments of small, medium, and world-renowned multinational companies to access remote computers and mobile devices, offering technical assistance to remote users. During the COVID-19 pandemic, ISL Online became a crucial tool for millions of employees worldwide, enabling them to work from home effectively.  

Approaching the Japanese market   

XLAB's journey in Japan began in 2005, when the company was selected as one of the 30 participants in the "EU Gateway to Japan" delegation. This initiative aimed to help European IT companies with strong export potential enter the Japanese market, marking a significant milestone for XLAB. During this visit, XLAB had the opportunity to connect with OceanBridge, a Tokyo-based distributor that supports EU and US software solution providers in navigating the Japanese market.  

From 2005 to 2007, intensive preparations were undertaken, including translating software user interfaces and documentation into Japanese, technically validating the systems, and establishing promotional and sales processes. Additionally, servers and other essential infrastructure were set up during this period.  

After two years of preparation, the business partnership was officially launched in 2007. Since then, the business volume between XLAB and OceanBridge has been steadily increasing. Today, Japan is XLAB’s top market in terms of sales. Together with OceanBridge they provide secure remote desktop solutions to prominent firms, including Nippon Life Insurance - Japan's largest insurance company, Mitsubishi Chemicals, Santec Corporation, Fujitsu, Canon, Rakuten, and more than 2,500 other Japanese companies.  

Driving for Success  

Entering the Japanese market is far from easy. Language and cultural differences deter many European IT companies from entering Japan. Achieving success in the Japanese market requires a multi-faceted approach that combines in-depth market research, cultural adaptation, relationship building, regulatory compliance, and technological innovation. By understanding and respecting the unique aspects of the Japanese business environment, companies can navigate challenges and capitalize on opportunities to establish a strong presence in this dynamic market.  

According to XLAB, one of the most crucial aspects of conducting business in Japan is maintaining close relationships with partners and key customers: “ While many business operations can be conducted online, face-to-face meetings and relationship building are essential components of Japanese business culture. As an overseas company, you must prove that entering the Japanese market is the company’s long-term strategy, not just an adventure. Demonstrating your commitment and dedication to Japanese partners and customers is vital. Trust is the foundation of doing business in Japan.“ 

Support from the Centre 

EU-funded programs that assist European companies in entering the Japanese market are crucial for developing a success story in Japan, especially for SMEs, as breaking into the Japanese market requires considerable time and effort. Success is not achieved overnight, and patience is essential. Since 2005, XLAB has participated in several EU business missions to Japan, including those managed by the EU-Japan Centre for Industrial Cooperation. In 2018 the Slovenian company was selected as a participant for the Digital Business Mission.  

Future Expectations    

In 2023, XLAB signed a long-term agreement with Nippon Life Insurance, also known as Nissay (日本生命), the largest Japanese life insurance company by revenue. Founded in 1889 and headquartered in Osaka, Nissay serves over 15 million clients and employs more than 70,000 people. By implementing XLAB’s screen-sharing technology, Nissay is enhancing its digital transformation strategy and pioneering the shift to remote sales, enabling secure, efficient, and customer-centric online interactions. Partnering with this leader in the Japanese financial market will help XLAB further expand its business operations in the future.  

In addition to achieving excellent business results in the Japanese market, the impact of Japan on XLAB's organizational culture is equally important. The company has evolved under the influence of Japanese culture, which is characterized by extraordinary diligence, discipline, precision, and mutual respect. 

Text based on an interview with Jure Pompe, Managing Director of XLAB. 

Published in June 2024.