TECH TALK: Emerging Enterprises and Emergent Networks: Knowledge Weblogs

Knowledge is what we all possess as we go about doing our work in enterprises. One of the key challenges facing enterprises is how to extract knowledge which is embedded within the employees and “institutionalise” it. There have been many approaches to knowledge management. The simplest approach is to send an email to various people in a group. At the other extreme are applications like Lotus Notes and more recently, Groove. Many of the bigger enterprises can afford the expense of the knowledge management applications. What is the option for the small and medium enterprises (SMEs)?

Sharing knowledge involves writing one’s thoughts, ideas and experiences and sharing it with others in a group. So far, the options for writing have been very limited – we either write in an email window or in a word processor. Both approaches make it difficult to search, archive and share what we have written. The Web has been largely a read-only medium so far, with publishing being limited to people with some technical knowledge.

Weblogs are changing this: they are making the Web two-way. Just as the Net helped connect computers together which made it easier for people to communicate, Weblogs are helping connect people together by making it easier to share knowledge. What we have seen in the past year are the public face of weblogs as nearly a million of these personal diaries and journals have made their way on the web, powered by software tools which is making personal publishing easier.

There are only so many people who are interested in what I did today, whom I met, what I learnt during the course of my meetings. This set of interested people can be divided into two: family and friends who form my social network, and colleagues at work, who form my professional network. Most of the public weblogs that we are seeing today are of interest to the social network – people who know me and are interested in what I did and learnt. Some of these webloggers, who are “domain warriors” (specialists in a certain field), are attracting attention and traffic far beyond family and friends.

What is invisible and where one of the core strengths of weblogs can be leveraged is within the enterprise. We spend most of our workday interacting with people, making decisions, learning and sharing. Weblogs can help in taking the accumulated knowledge and sharing it with a wider group of people within the company. A corporate weblog (or knowledge weblog) can be created by anyone – or everyone – in a company. Think of it as a daily diary maintained to explain decisions or share thoughts and ideas. If only a handful of people do it, there isn’t much to it. But if everyone in the enterprise can be encouraged to do it, then knowledge sharing “tips over” creating a base which is far greater than just the sum of its parts.

TECH TALK: Emerging Enterprises and Emergent Networks: Software for USD 5 per month

There used to those travel books I remember reading when I was young which talked of US (or Europe) for USD 5 a day. How about providing SMEs with all the software they need for USD 5 per person per month to complement the USD 150 computer? Taken together with the hardware, this provides SMEs with a state-of-the-art technology infrastructure for no more than USD 210 per annum (assuming they decide to keep upgrading their computer every year, which may not even be required).

The approach to building out the software infrastructure for SMEs should focus on having a thick server (the Enterprise Server) and thin clients, all running Linux. The server is where the applications will run, and where all the files, mails and preferences will be stored. It is like an ASP (application service provider) model, but running off the LAN rather than the Internet. Software updates can be pushed out to the Enterprise Server on an ongoing basis.

The older PCs become the desktops. My view is that for serious work people need a proper full-sized keyboard and at least a 14-inch monitor. Devices like the PDAs and cellphones can at best be adjuncts to the primary desktop. These desktops need not have a hard disk or CD drive, since all storage will be centralised on the server. This makes the desktops inter-changeable and easy to manage; in case of a problem, a desktop can be easily swapped out and replaced by another.

The desktops will boot off the server, and work like Linux Terminals, running KDE or GNOME desktop environments.

The applications they need to support are Email, Instant Messaging, Internet Browser, office productivity applications (a word processor, a spreadsheet and a presentation application, with file format which would be compatible with the MS-Office suite), and Acrobat for viewing PDF files. For most people in the organisation, this collection would take care of all of their needs.

The next step would be to create the enterprise software applications necessary within for the SMEs, incorporating ERP, supply-chain management, customer-relationship management and other applications. Most SMEs need only a minimal functionality, but need an integrated suite where data needs to be entered only once and is available across the enterprise.

The pricing should be done such that it becomes attractive to ensure that everyone in the company has access to all the applications. This is like a “thali” approach – fixed price, use as much as is needed. Over time, various software vendors can build on the base platform to create industry-specific vertical applications. By taking a mass market approach, it should be possible to keep the price point for the software subscription at USD 5 per person per month.

By providing a connected computer on every desktop, it now becomes possible to think very differently of how information and knowledge can be shared within the enterprise. The killer app for the SME is likely to be not email or the browser or the enterprise software suite but the weblog.

TECH TALK: Emerging Enterprises and Emergent Networks: A PC on Every Desktop

How do we take individual emerging enterprises from across the world and build emergent networks out of them? In the coming columns, I will describe an approach which combines technology, content, community and services to aggregate SMEs together so they can share, learn and grow.

The starting point is to deploy technology pervasively within the small and medium enterprises (SMEs). In most enterprises, there are very few computers. The cost of computers is a serious drawback, especially for SMEs in emerging markets. In these countries, the price of computers is still denominated in dollars. Tariffs can exacerbate the pricing situation in countries like India, where there is still a 30% duty on hardware.

Yet, for SMEs to be competitive in their business, adoption of technology is a must. SMEs need to adopt the principle of a PC on every desktop. And yet, since for most of them, their earnings are in local currency, it becomes very difficult to spend in dollars. How do we resolve this dilemma?

The solution lies in using lag technology in the form of older PCs which are junked by companies in the developed markets as they upgrade their systems. Typical upgrade cycles in countries like the US where PC penetrations have reached near saturation levels in organisations is 3-4 years. Which means that this year companies will upgrade their systems which they are likely to have bought during 1998-1999. These systems have been fully depreciated and as such are almost worthless to the companies when they upgrading.

Even as these systems are being disposed of, they are functioning computers – we all used them once upon a time and were quite happy with them. They helped us surf the Web, do our emails and write documents.

When one considers that in the US alone this year about 40 million new PCs will be sold, the enormity of the market becomes evident. This also means that about the same number are likely to be available for disposal.

Now, imagine if instead of stripping out the parts of the system, what if the computer itself were to be shipped across to the world’s emerging markets where they can provide computing to people who have never used a computer. For them, using a 1999 computer should not pose problems because it is their first real taste of computing. For most people, given the limited tasks that they do, this computer should be adequate.

Assuming the company disposing the computer got USD 50 for the system and adding USD 50 for shipping, the base price for the system becomes USD 100. Add to this the cost of perhaps upgrading some individual components and adding a support fee, it should be possible to sell this computer for USD 125-150 in emerging markets. In India, such a computer would cost no more than Rs 7,500. This is so much more affordable. The price is less than a quarter of the cheapest computers available today – which have so much more functionality than is needed.

Let’s put this in another way. Would SMEs be willing to spend 10% or less of a person’s annual salary on providing the greatest productivity and communications tool on the desktop? I think the answer will be a resounding yes. This will mean that anyone earning more than Rs 6,500 a month could be given a computer. Such a mass deployment of computing power would make enterprises rethink their businesses and business models dramatically.

TECH TALK: Emerging Enterprises and Emergent Networks: Key Trends

Before we go ahead to talk about the specifics of what we want to do, let us summarise some of the key trends that we have been observing in recent times.

  • In communications, there is a lot of talk and action on the 802.11 front. Using open spectrum (2.4 Ghz and the Wi-Fi protocols), it is now possible to build a “viral telecommunications network” comprising of neighbourbood area networks (NANs). This grassroots architecture, using wireless mesh routing, would resemble the network. It would provide a ubiquitous envelop of connectivity. With directional antennae, the 802.11b protocol can be extended to work for 40 kms which can link up rural areas.
  • In software, the hot area is Web Services: using protocols like XML and SOAP to create software components which can find and use each other across the network. This is the base on which we can get others to build software to pre-defined specifications like interchangeable components. XML also works as the foundation for exchange of information.
  • On the Web front, a couple of changes are happening in the way information is getting published and distributed. Driven by the popularity of weblogs, the web is becoming more of a writing medium. Weblogs are making it easy to publish content and opinions by individuals. RSS Newsfeeds aggregate published content and provide it on the desktop. This makes for the creation of people as filters – people as producers and consumers of news and information.
  • In hardware, there is a huge upgrade cycle expected in the next 2-3 years in countries like the US. An estimated 40 million PCs in corporates are likely to be upgraded in the US alone. These were bought in the 1999-2000 time period. This can provide a base for an alternate low-cost computing platform.
  • On the business standards front also, there has been some interesting work with definitions like ebXML and RosettaNet likely to make the exchange of information between companies easier. The shift is to a “real-time economy”, an event-driven economy.
  • The notion of technology of utility has been taking shape as companies like IBM accelerate the push towards grid computing and offering it on a pay-as-you-go subscription basis. This is part of the broader shift to computing services.

By themselves, these ideas are very important but perhaps, evolutionary. Taken together, these trends portend a revolution, creating opportunities for a very different tomorrow. A tomorrow where the bottom of the enterprise can be empowered to take on the bigger enterprises, where knowledge becomes a differentiator and business accelerator, where small entities can come together to create something remarkable which is much more powerful than anything else.

TECH TALK: Emerging Enterprises and Emergent Networks: Middle-Enterprise

Between 6 billion consumers and the 10,000 large companies of the world lies an expanse of about 25 million small and medium enterprises (SMEs). Think of this as the Middle-Enterprise, around whom the lives of the consumers and the large companies revolve. These SMEs employ anywhere from 1 to 1,000 people. They are the silent majority of the business world, the bottom of the corporate pyramid.

For many, their lives have changed little in the past few years even as technology usage has grown. They are hard to reach. Each day is a challenge for many SMEs – on the one hand are the daily battles which every entrepreneur accepts as part of the ride, and on the other is the desire for growth, to become Big, to have greater predictability and profitability.

The Middle-Enterprise is very often ignored because they are so distributed, small and hard to reach and market to. Yet, they are also the economic drivers for economies. They are like ants – individually, they may not be able to do much, but together, they can literally move mountains. It is this collective power which needs to be harnessed.

Technology adoption by SMEs typically lags that by the bigger companies by a few years. Many different technology pieces are now falling in impact SMEs. These developments have the potential to dramatically alter how SMEs go about doing their business and their quest for growth. What has been the visible aspect of the Internet and eBusiness revolution of the past few years has been how the real-time enterprise is being enabled. The SME revolution is nascent and, like an iceberg, remains largely hidden.

The adoption of computers by SMEs, especially those in emerging markets, has traditionally lagged that by the bigger companies. Consider some of the numbers in India. The installed base of computers in India stands at about 6.5 million, which includes both office and home, and of which at least 3 million are more than 3 years old. Most of the SMEs have penetration ratios of less than 10%.

One of the biggest inhibitors has been the total cost of technology ownership – of hardware, software and communications. Hardware is still priced in the rupee equivalent of US dollars (with a 30% tariff thrown in). Software for many has been zero cost, but obviously that cannot go on. Communications costs in India have been among high though they are now falling. Internet access on a dial-up line costs Rs 30 (60 cents) an hour.

If one looks at some of the analysis coming from the US as to the factors which have contributed to the short recession period, the investment in infotech and the consequent increase in productivity is seen as one key factor. This gap between the US and other countries is actually increasing. For emerging enterprises and especially those in emerging markets, their cheaper labour costs can sometimes be offset by the limited use of technology in their operations. Enterprises need to work cheap and smart.

In the coming columns, we will explore how SMEs can take advantage of many of the technological developments taking place and how a new form of “emergent” networks (where the whole is greater than the sum of the parts) can help alter the business landscape in the coming years.

TECH TALK: Good Books: Good Books (Part 5)

The Lexus and the Olive Tree by Thomas Friedman
Written by the Pulitzer Prize-winning foreign affairs columnist of The New York Times, this book (published first in 1999) is about Globalization. Friedman provides a framework to think about what’s happening in the world around us, bridging the worlds of geography, politics, technology, economics and trade. The Great Game of today is indeed Globalization: no country or economy can afford to be isolated. The three democratizations – of technology, finance and information – are integrating the world ever more closely. And as this happens, there are tensions and conflicts between the “lexus” (the modernizing force of globalization) and the “olive tree” (the ancient forces of culture, tradition and community). Friedman brings it all to life with his wonderful collection of stories from around the world. Here is how he defines globalization:

It is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before – in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach individuals, corporations and nation-states farther, faster, deeper and cheaper than ever before. This process of globalization is also producing a powerful backlash from those brutalized or left behind by this new system.

The driving idea behind globalization is free-market capitalism – the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be.

The China Dream by Joe Studwell
Subtitled “The Quest for the Last Great Untapped Market on Earth”, this book by Studwell (who lived in China from 1990-2000, and wrote for The Economist) provides excellent insights into the Chinese market. China attracted USD 300 billion foreign direct investment in the 1990s, and continues to do so at the rate of nearly USD 50 billion a year. As companies rush into China to outsource low-tech and high-tech manufacturing and eye its domestic market of 1.4 billion people, Studwell has a cautionary note. The book argues that “the economic foundations of contemporary China have been laid on sand and constructed from the hubris that drove the Soviet Union in the 1950s. Among investors, expectations and reality are grossly out of kilter. At the rational, reductive level at which economists operate, it is a recipe for suffering and disaster. And yet, at the less rational level at which real life operates, one can never be certain of betting against the enduring power that is the China dream.”

Only time will tell how right (or wrong) Studwell is. From an Indian viewpoint, China is a threat and an opportunity. I believe that Indian companies have to look at China as an opportunity. This book helps in deepening an understanding of China and how it works.

TECH TALK: Good Books: Good Books (Part 4)

How to Win Friends and Influence People by Dale Carnegie
Carnegie wrote this book in 1936. I remember this as one of the first books I had ever got – as a prize in school early on in life. I re-read it recently, and was amazed to see how relevant it still is – and how little we seem to live by the principles embodied in the book. This is a book that is worth reading every few months for what is says are eternal truths. The writing style is conversational, and full of little stories. A small excerpt from the first chapter entitled “If you want to gather honey, don’t kick over the beehive”:

If you and I want to stir up a resentment tomorrow that may rankle across the decades and endure until death, just let us indulge in a little stinging criticism – no matter how certain we are that it is justified.

When dealing with people, let us remember that we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity.

Any fool can criticize, condemn and complain – and most fools do.

But it takes character and self-control to be understanding and forgiving.

Made in America by Sam Walton with John Huey
Walmart recently became the world’s largest company. Its sales in 2001 were USD 220 billion, and the company is growing by about 15% every year. The story becomes all the more remarkable when you learn that the first Walmart opened only 40 years ago. Who better to tell the story than its founder, Sam Walton, himself. Even though the book itself is 10 years old, it makes great reading, especially for entrepreneurs. Here’s a small excerpt from the book’s foreword:

If I had to single out one element in my life that has made a difference for me, it would be a passion to compete. That passion has pretty much kept me on the go, looking ahead to the next store visit, or the next store opening, or the next merchandising item I personally wanted to promote out in those stores.

As I look back, I realize that ours is a story about the kind of traditional principles that made America great in the first place. It is a story about entrepreneurship, and risk, and hard work, and knowing where you want to go and being willing to do what it takes to get there. It’s a story about believing in your idea even maybe when some other folks don’t, and about sticking to your guns. But I think more than anything it proves that there’s absolutely no limit to what plain, ordinary working people can accomplish if they’re given the opportunity and encouragement and the incentive to do their best.

TECH TALK: Good Books: Good Books (Part 3)

The Lord of the Rings by JRR Tolkien
I had read the “book of the century” first in my college days, and re-read it again (as I lay sick in bed). The richness of Tolkien’s world and characters is amazingly inspirational. The first part of the book came to life on the big screen recently. But that is in no way a replacement for the book. The 1,000-page tome, which is actually three books, can be very intimidating at first. But as you start reading it, everything comes to life.

Such is Tolkien’s detailing that the “Middle-Earth” becomes reality. The joy of the book is that it allows each of us to create our own imaginary world, and get inhabit it with hobbits, wizards, dwarves and orcs. Besides the fantasy element in the book, it is also about how ordinary people can do extraordinary things – whatever the forces that may be ranged against.

A useful companion book (which I found recently) for the geography of the complex world Tolkien has created is “The Atlas of Middle-Earth” by Karen Fonstad. It consists of “hundreds of two-color maps and diagrams [which] survey the journeys of the principal characters day by day.”

Good To Great by Jim Collins
The first two sentences in this book by the co-author of “Built to Last” are: “Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great.”

Collins spent five years searching for the difference between good and great companies. The answers and, in fact, his theories on what makes the difference, may seem surprising at first. One of his theories is the “Hedgehog Concept”. Writes Collins:

Foxes pursue many ends at the same time and see the world in all its complexity. They are “scattered or diffused, moving on many levels”, never integrating their thinking into one overall concept or unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. It doesn’t matter how complex the world, a hedgehog reduces all challenges and dilemmas to simple – indeed almost simplistic – hedgehog ideas.

A Hedgehog concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles: what can you be the best in the world at (and equally important, what you cannot be the best in the world at), what drives your economic engine, and what you are deeply passionate about.

TECH TALK: Good Books: Good Books (Part 2)

The Alchemist by Paulo Coelho
Published in 1988, this magical fable about a shepherd’s journey in search of a great treasure talks about “listening to our hearts, learning to read the omens strewn along life’s path and above all following our dreams.” As I read it, I couldn’t help relating many incidents in my life to the book. There are connections between events, a reason why things happen and when they happen. If you like me believe that there is mission why we are all on earth for, and all the various things (good and bad) happen for a reason, this book is definitely for you. Here is an excerpt from what one of the characters in the book says:

[Destiny] is what you have always wanted to accomplish. Everyone, when they are young, knows what their destiny is. At that point in their lives, everything is clear and possible. They are not afraid to dream, and to yearn for everything they would like to see happen to them in their lives. But as time passes, a mysterious force begins to convince them that it will be impossible for them to realize their destinyIt’s a force which appears to be negative, but actually shows you how to realize your destiny. It prepares your spirit and your will; because there is one great truth on this planet: whoever you are, whatever it is that you do, when you are really want something, it’s because that desire originated in the soul of the universe. It’s your mission on earthTo realize one’s destiny is a person’s only real obligation. And when you want something, the universe conspires in helping you achieve it.

Will and Vision: How Latecomers Grow to Dominate Markets by Gerard Tellis and Peter Golder
The book’s premise is counter-intuitive. We have always been led to believe that “the early bird gets the worm”, that the first-mover advantage is one of the critical success factors.

This had become all the more so during the early Internet years. The book, through a detailed analysis of various industries and many examples, “debunks the myth of pioneering advantage and reveals the real drivers of enduring market leadership: Vision of the mass market, managerial persistence, relentless innovation, financial commitment, asset leverage” – a combination, as it were, of vision and will. Here’s an excerpt on the authors’ view on envisioning the mass market:

The mass market is something that marketers tend to shun, especially for mature products. Strategists stress the importance of segmentation and differentiation. [For managers, the mass market] is synonymous with cutthroat competition, low margins, and low profits.

The mass market bears an entirely different perspective for a new product introduced by a visionary. At the time a vision is first formulated, competitors either may not see any market or may focus on a niche.Why focus on the mass market? Such an orientation has three important benefits for a market entrant.

First, reaching out to the mass market requires one to target a price that would appeal to this market. Second, tapping the mass market allows for economies of scale that lead to low unit costs. Third, the large scale of operation that comes with serving the mass market can easily support a big research effect.

The scale and profits from tapping the mass market allow even a late entrant to surpass the technological lead and experience of a pioneer that focuses on a small segment of the market.

TECH TALK: Good Books: Good Books

Books have been a great source of inspiration and learning for me. A good book broadens thinking and has something new to teach us. The value of a book can be enhanced if, as we read. we stop and reflect on the points made by the author, and see how they can enrich to our view of the world. Books can help shape how we live in the present and envision the future.

A book may cost Rs 500-1,000 (USD 10-20) to buy but it costs a lot more to read. The knowledge and insights that a good book can provide are worth infinitely more. We need to allocate our time and attention, for which in today’s world there are many competitors. To read a book means making room for large chunks of time, which is increasingly harder to do as our life gets compartmentalised into micro-moments.

My best book-reading time has come when I am traveling, especially on long flights. Being strapped to a seat with very limited mobility and with no interruptions (especially from emails and cellphones) helps us forget our world and immerse ourselves into the world the author creates. This is important because to get the most out of a book, we have to let the author take us, quite literally, for a ride.

The Internet has certainly made the process of finding and buying books much easier, irrespective of where you are. Amazon’s reviews (especially those from readers) are very helpful. But for me, the best book recommendations still come from people I know – people who have invested the time and effort to read it.

The Internet helps in one more way. It helps you find out more about the author. Because when we read a book, we also get a peek into the author’s mind. Seeing how that thinking has evolved in the intervening years – especially in these times of rapid and exceptional change – is always an interesting exercise.

In the coming columns, I will share with me my thoughts on some good books and why I like them. I would also like to hear about your favourite books and why you like them.

TECH TALK: The Real Wireless Revolution: Wireless Community Networks

Wi-Fi’s benefits (use of open spectrum, high-speed, rapid deployment) make it an excellent candidate for building out mainstream data networks in emerging markets like India, where cost plays a very important role. Besides, Wi-Fi is an ideal technology framework for entrepreneurs – they can go in and set up wireless hubs in neighbourhoods to provide services. We need to think of Wi-Fi networks as core to building out a connected nation. The question is how to put it together to build a bottom-up community network providing low-cost, mass market connectivity.

The first step is for the governments to ensure that the open spectrum of 2.4 Ghz and 5.7 Ghz stays that way, and can be used freely for data communications without requiring any licences. This will provide the necessary impetus for entrepreneurs to come in and start building out the networks.

The second step is for vendors to make the Wi-Fi network cards and hubs widely available. They need to think in terms of Wi-Fi as becoming a mainstream technology, with volumes which could exceed those of the developed markets, where it is one of several competing technologies. For this, they should think long-term: get the hubs out there (the “razors”) first to seed the market for the Ethernet cards (“the blades”).

The third step is for various chains to start deploying Wi-Fi. Public Call Offices (PCOs), cybercafes and post offices are there in every neighbourhood. They can serve as the initial “hotspots”. Residential and office complexes can do the same. What this does is two things: it enables connectivity at much higher-speeds than what is available today, and creates the platform for Wi-Fi-enabled mobile devices.

The fourth step is for these networks to be connected together (like Boingo is doing in the US) to build out virtual wireless ISPs, enabling individuals to connect through a single login-password infrastructure. While mobility is not likely to be a key requirement in the beginning, making it easier for users to connect to wireless networks is important.

The fifth step is for the development of low-cost, mobile devices. These become the computers of tomorrow for the “bottom of the enterprise pyramid”. The end-user cost should be no more than USD 100 (Rs 5,000). While today’s cost of Wi-Fi chips does not make this possible, the cost is a function of the volumes. If emerging markets can put together a need for 10 million such units a year, prices can fall dramatically making Wi-Fi enabled low-cost, handheld computers the computer for the next billion people.

The final step in this roll-out would be for content developers and enterprises to start putting together applications which leverage the devices. One has to think of innovative ways in which millions of users can now interact together with high-speed devices. This is what 3G hopes to capitalise on. But 3G is a top-down, carrier-driven technology which will take time to roll-out, and will be much more expensive. By comparison, Wi-Fi is bottom-up and can become affordable for the masses very rapidly. It can help these nations leapfrog with a high-speed wireless infrastructure which can be an enabler for new applications and productivity enhancements. This is the real wireless revolution waiting to happen, and it will start in our neighbourhoods.

TECH TALK: The Real Wireless Revolution: Wi-Fi (Part 2)

In the US, many groups have also set up free “underground” wireless networks. The will set up a network access point in their home or office, and make it available for access to anyone who has a Wi-Fi network card. From the network access point, there is typically a cable modem, DSL or other form of high-speed connectivity to the Internet. The access points cost about USD 130-150 (about Rs 7,000), while the 802.11 cards for the computers cost less than USD 100 (Rs 5,000). These costs are dropping further as demand increases. In addition, many universities also offer community wireless networks. Hotels, airports and other “hotspots” offer network access for a fee.

Today’s 802.11b networks are still for a short-range only. Besides, access is still not seamless and the technology is still evolving. But there are enough indications that Wi-Fi is emerging as a technology which offers immense promise, along with higher speeds in the years to come.

Writes Elisa Batista in Wired News:

So many companies are putting up wireless LANs that a recent report by investment research firm ARCchart found that WLAN providers could pose a risk to the success of next-generation (3G) wireless operators. The research firm said WLANs could eat up as much as 64 percent of 3G revenues in the next four years.

Although 3G would give mobile-device users access to the Internet at a speed of up to 2 Mbps — WLANs, such as the popular 802.11b (Wi-Fi) standard, boast speeds of at least 11 Mbps.

Meanwhile, as if there weren’t enough WLAN standards out there, network infrastructure providers Intersil (ISIL) and Cisco Systems (CSCO) said they would begin designing 802.11g products.

Unlike Wi-Fi and 802.11a WLANs — which run at speeds up to 54 Mbps but are not compatible with Wi-Fi (802.11b) products — 802.11g would offer wireless data at 54 Mbps and be compatible with 802.11b.

The Institute of Electrical and Electronics Engineers (IEEE)

has approved the specifications for 802.11g
but won’t make it an official standard until early next year.
The first 802.11g products aren’t expected to come to market until the middle of 2003, members of the industry say.

Writes Paul Boutin in Salon, providing a realistic picture of Wi-Fi in the US:

Wi-Fi Nation is on indefinite hold, at least until computer-carrying consumers can roam beyond the invisible tether of the base station at the office, or the AirPort in the family den. With tens of millions of customers ready to be wireless by next year, and the price of a Wi-Fi laptop dropping below $1,000, why isn’t ATT setting up antennae for us, instead of shutting down its Digital Broadband service?

The answer is less about technology than the shifting flows of capital in the 21st century. The wireless Internet won’t be rolled out telecom-style, like DSL or cable modems. In the wake of embarrassing failures to create top-down networks, it will be built from the ground up, by a patchwork quilt of players. Imagine the gradual knitting together of cellular roaming service in the ’90s, but with 10,000 antenna owners rather than 10 giant carriers. Rather than risking billions of investors’ dollars on a ubiquitous rollout, entrepreneurs will play for smaller stakes in more proven local or niche markets: When we come, they will build it.

Think of the Internet and the potpourri of networks and ISPs who are out there in the early days. Over time, these networks run by the smaller providers got consolidated and a seamless network emerged. In the US, Boingo Wireless is trying to build just such a virtual wireless ISP.

From an emerging point of view, the promise of 802.11 is in its capabilities to enable the creation of a high-bandwidth grassroots network. Today, in India, wide-area bandwidth is still limited to, for all practical purposes, to 64-128 Kbps (assuming one only wants to pay reasonable sums of money!) This is where 802.11 can come in and change the game dramatically.

TECH TALK: The Real Wireless Revolution: Wi-Fi

Wi-Fi promises to enable a grassroots revolution in wireless communications, especially for data. Its already happening in the US, where in offices and homes, one can roam around a limited area free from wires and still access the Ethernet (and therefore, the Internet) at high-speeds. The Wireless LANs are only one part of how Wi-Fi can be used. The real promise lies in the ability to string together many such LANs and build a wide-area network, just like the Internet was built in its early days. The difference: this one needs no wires, giving end users complete freedom and mobility. Since it uses open spectrum, this also means the costs involved in building this out are very low. This becomes the “commons” answer to the expensive 2.5G and 3G wireless networks being built

The New York Times, in a recent article (March 3), called this the “Corner Internet”. Writes John Markoff:

Modeled closely on the original nature of the Internet, which grew by chaining together separate computer networks, the technology – known as wireless mesh routing – is being rapidly embraced in the United States as well as in the developing world, where it is viewed as a low-cost method for quickly building network infrastructure.

If the engineers are right, the popular and inexpensive Wi-Fi wireless
standard, also known as 802.11, could serve as the wedge for the
next-generation Internet, enabling a new wave of wireless portable
gadgets that ultimately blanket homes, schools and shopping malls with
Internet access.

Currently most 802.11 networks serve as individual beacons that provide wireless Internet connections to portable computers situated within 200 feet or so of an 802.11 transmitter.

What wireless mesh routing offers is the promise of a vastly more powerful collaboration driven by the same forces that originally built the Internet.

Such networks do have the critical advantage of economy of scale. In contrast to the cellular data networks, in which every customer is an added cost, in some respects in wireless mesh networks the more users who join the better the network performs.

In the jargon of Silicon Valley, wireless mesh routing is potentially a “disruptive technology,” a new technology that is likely to upset the existing order by using the same powerful economics of cost and scale that initially drove the growth of the commercial Internet.

This disruptive innovation is what can potentially change communications in many emerging markets of the world like India. What is an “alternate” technology in the developed markets of the world can become a “mainstream” technology in India and help create it leapfrog into the latest era of high-speed wireless data communications.

So, what is Wi-Fi and how can it build the next generation Internet? The Wi-Fi family of protocols refers to the IEEE 802.11 standards for wireless Ethernet communications. The most popular variant at this point is 802.11b, which works in the 2.4 Ghz band, and offers speeds of up to 11 Mbps. The second variant just emerging is 802.11a, which works in the 5 Ghz band and can go to up 54 Mbps. Considering that today’s Ethernets run at 10 Mbps and 100 Mbps, and the other work that is also happening in the Wi-Fi protocols for higher speeds, in the near future there will be little difference between wired and wireless LAN speeds.

TECH TALK: The Real Wireless Revolution: The Real Wireless Revolution

Cellphones are expected to keep doubling in India for the next few years as prices fall for both the handsets and the cost of telecom. So, the cost of talking is going to get cheaper and cheaper. For Indians used to paying Rs 40 a minute talking between Mumbai and Delhi during prime-time and nearly Rs 100 per minute for India-US calls, the dramatic fall in voice telephony prices has been too sudden, too rapid and not a day too soon! So, even as voice telephony through wired and wireless phones becomes even more ubiquitous across India across all segments of society, the per capita volumes are rising driven by falling prices, thanks to competition. The telecom revolution is finally arriving in India after many years of false starts.

For the most part, the voice revolution is being still driven by companies who have committed to paying (or already paid) large amounts of licence fees for either the right to become the alternative operator in a geographic area or for chunks of spectrum. While India has not yet auctioned off or allocated 3G licences yet, there is perhaps hope in the government that more money could yet be made.

Amidst all this, the data part of the communications business has not changed as dramatically. While speeds have no doubt increased, bandwidth costs remain high and so far have not fallen as dramatically. In fact, India is perhaps at least 5-6 years behind countries like the US when it comes to the availability of cost-effective bandwidth for businesses. Dial-up access to the Internet at 56 Kbps through a regular voice line is still the most popular form of connectivity.

This is where the stage can be set in India for a grassroots revolution. One, which can create an envelope of wireless data across much of the country, largely bypassing the telcos and cellcos, and patterned on the lines of the cable operators. This is about building, bottom-up, wireless community networks using unlicenced spectrum. This is not just about bridging the multi-year gap in the data communications availability and taking up a leadership position in the deployment of wireless networks. In less time than it took to build about the cable networks in India, it is possible to create a high-speed wireless network across much of India, without worrying about digging up roads and stringing wires across buildings. This revolution goes by the unlikely name of 802.11 (or Wi-Fi).

TECH TALK: The Real Wireless Revolution: Communications: 10 years of Change

Look back at the changes in the last 10 years in our communications of both voice and data. In India, in the early 1990s, voice communications was still largely over a telephone line and data communications was largely through dial-up modems at 9.6 / 14.4 Kbps. The wired telephone service was operated only by the government-controlled telephone companies, while the Internet was not yet available for commercial access. One had to wait for a reasonable length of time (weeks to months) to get a telephone line at work or home. In the early 1990s, on the television front, the cable revolution had just begun as various private operators, spurred by on the desire for connectivity to BBC and CNN after the Gulf War, created their own territories across India, largely unsupervised by the government.

What a change has happened in the past 10 years! Voice telecom services has many operators across India, with a choice of both wired and wireless. The cost of long-distance in India (STD) has fallen by over 50% in the past few months. International dialing (ISD) costs are also likely to fall rapidly, as competitors enter the segment from April 1.

Data communications also has options – ADSL, fixed wireless, ISDN, dial-up, cable modem, even though the speeds still remain low (64-128 Kbps) for reasonably priced services. Internet access is available across much of India. Cable operators have connected tens of millions of homes across India, and the channels have multiplied. As it turns out, Indians pay perhaps the least amount of money in the world for cable TV – about Rs 250-300 (USD 5-6) per month for 50-75 channels).

On the financial front, control of India’s international telecom operator, VSNL, has just been handed over to the Tata group through a disinvestments of 26% of equity by the Indian government. Earlier in the year, Bharti Telecom successfully launched one of India’s largest IPOs, raising nearly USD 200 million to create a company valued at about USD 2 billion.

From a technology standpoint, one of the changes which has been happening worldwide in the wired and wireless worlds is the following: that which used to be wired earlier is now becoming wireless, and that what was wireless is becoming wired. This change is also impacting India. Voice communications is shifting from wired lines to cellular. Television broadcasting is shifting from free-to-air broadcasts and satellite to cable networks.

The most dramatic actions perhaps has been on the wireless front. Cellular phones are doubling annually in India and now have an installed base of about 6 million. Text messaging usage is rocketing upwards across the country. The cellular phone companies are also rolling out 2.5G (GPRS) in India, to offer always-on wireless data services. High-speed data connectivity is being offered to corporates and cybercafes across India by companies like Satyam Infoway via fixed wireless.

The real wireless revolution in India, however, is still to come.

TECH TALK: An Indian in China: Bridging India and China

Most of India has always viewed China as a competitor, and not as a market. Perhaps this adversarial relationship goes back to the war we fought and the Indian territory that China still occupies. India’s twin obsessions of politics and Pakistan have put India much behind China in the game that China has understood very well: tomorrow’s battlefield lies in economics, not politics. India had begun well in 1991, but somewhere along the line, we went slow as China powered ahead.

Yet, tomorrow will bring its own set of opportunities. That is how India needs to see China: as a new market which Indian entrepreneurs need to look at as they expand beyond India’s boundaries. If the past decade was about looking West (to US and Europe), the next decade will be about looking East (to China and the other countries in the region).

India may have missed the manufacturing bus to China, but it can build a services base. These beginnings have already been made. Today, just as China is being discussed globally for manufacturing, India is very much on the agenda for outsourcing software and services. This is one of the core strengths around which India needs to become part of the global supply chain. Just as Chinese companies seek to flood the Indian market with their low-priced products, India can make China a part of the Indian services orbit by leveraging its strengths in English, execution and relationships built with the global companies. China’s uniformity has worked well as it has become the workshop of the world; India needs to make its diversity work as it seeks to become the back-office to the world.

Indian companies need to understand China better. They need to start setting up offices there – not just for liaison or for “demonstrating a China strategy”, but for full-fledged business. It will mean learning the Chinese language and understanding the local culture. The two countries may seem similar and there is always a desire to seek comfort in what is alike between the two countries and its people. But the reality of the past 50 years cannot be overlooked – China’s communism and India’s democracy are realities which need to be remembered as one considers the markets and attitudes of the people.

A good example of an Indian company which has expanded into China is contests2win (c2w), which helps companies in their brand building efforts with consumers through contests and games. c2w started off as a child of the dotcom era in India. But it has not only built a large following in India, but also last year expanded into China. It is using the headstart China has in its Internet base (5-6 times that of India) to build an early lead into new, emerging markets and technologies. Other Indian companies who have already built a presence in China include Aptech and NIIT on the IT education front.

China is a competitor, but it is also an opportunity and a very big at that for Indian companies, if we are prepared to look at it that way. Walk through the Shanghai Museum and see how a first century AD export from India has made a deep mark across China. That export: the teachings of Buddha. Now, two thousand years later, India needs to learn and do the same. Our software, services, and even our films can be good starting points. US, Europe and Japan may offer the comfort of past successes, but there are fortunes to be yet made targeting the “bottom of the enterprise pyramid.” No pyramid base can be bigger that the combined markets of India and China.

TECH TALK: An Indian in China: Challenges for China

China’s unprecedented growth may have wrought an economic miracle but the challenges do not go away. A recent Internet poll by the People’s Daily identified Corruption and the WTO (World Trade Organisation) entry as two of the key challenges. Even as China tries to catch up and overtake others, one needs to remember that its size – a population of 1.3 billion – makes that a daunting task.

There are in fact two Chinas – one is the urban, rapidly modernising mass of 400 million, while the other is the agriculture-based rural China with 900 million people. What we see and hear about is the new, urban China. No doubt that is glitzy and awesome. But the sheer size of even China’s countryside makes it important to consider their future. Wrote James Kyge in The Financial Times (October 8, 2001):

Trade and foreign account for over 40% of China’s GDP, so a significant decline in both next year could jeopordise the country’s rapid growth, revive arguments that the renminbi currency may need to be devalued and spur the government to increase its planned fiscal stimulus. If the pain becomes intense, the focus of the investor community could swivel from the growth story to converge in the fragile underpinnings of China’s economic takeoffThe gap between the rich and poor is now among the highest in the world. The growth in the urban economy is robust but the countryside is bogged down in debts and inefficient farming practices. It is in this context, several economists say, that makes China’s entry into the WTO a source of concern.

This is because the WTO will open up China’s markets, especially the agricultural sector, to foreign competition. This may lead to the closure and displacement of several millions of people, who will now need to be given alternative employment.

Wrote Dexter Roberts and Mark Clifford in a recent Business Week cover story:

Much of China’s growth has been generated by tens of thousands of new private and quasi-private enterprises that can’t, or won’t, be tightly controlled from the top. [China’s new leaders] must continue the delicate process of dismantling thousands of useless state enterprises and finding work for millions of displaced workers. And of course, now that China is a member of the WTO, [the leadership] will be forced to abide by its structures – some of which will be deeply painful to society.

To achieve a transition to a market economy while addressing the deep imbalances between rich and poor, fostering a common purpose to unify 1.3 billion people and 55 ethnic minorities, and satisfying its commitments to external authorities such as the WTO will be daunting.

There is also a social aspect to what’s happening in China. I was speaking to a friend in Shanghai who has been in China for the past 6 months. He pointed out something very interesting. Due to the single-child policy followed by the Chinese government for the past two decades, there is now a full generation of Chinese who have known no siblings. Family is just parents and grandparents, no brother or sister. One of the strengths in India has the network of family relationships. In tough times, there is always family to fall back upon. In China, however, this is not there for the most part now for the youth. For the first time in the world’s history, an entire society of single children gets ready to face and cope with the future. How this will play out, especially if the times get tough, is anybody’s guess.

TECH TALK: An Indian in China: The China Miracle

Take a look at some of China’s economic figures. GDP rose in 2001 by 7.3% to USD 1.15 trillion. (Compare with India’s GDP in 2000 was USD 479 billion). Per capita GDP in China is USD 900, double that of India. China’s exports in 2001 rose 6.8% to USD 266 billion, running a USD 22 billion trade surplus. (India’s trade balance runs negative at USD 15 billion, with exports of USD 45 billion in 2000). China’s reserves stand at nearly USD 200 billion, four times that of India. Foreign direct investment (FDI) in China has been climbing and now exceeds USD 40 billion annually. In India, FDI is about USD 2.5 billion a year.

When growth slowed last year (falling to just under 7% in the last quarter of 2001), the government quickly announced measures to push consumer spending by cutting interest rates, increasing salaries of civil servants and pensions for retirees, and extending and adding holidays to boost tourism. This is on top of the continued spending on infrastructure.

The China miracle is now becoming a juggernaut. The powerful combination of a huge domestic market willing to spend money and FDI as foreign companies have shifted manufacturing in large numbers to China both to cater to the local market and for exports has helped China grow rapidly in the last decade. There is little that China cannot (or does not) manufacture. Low wages, abundant capital, liberal labour laws and the growing pool of qualified engineering talent have propelled the shift in manufacturing to China. Writes Bill Powell in Fortune (March 4, 2002) on the implications:

China’s emergence as a reliable, stable producer of high-value, technologically sophisticated products will rewrite the economics of a wide range of manufacturing industries, not just those that are labor intensive (such as toys and textiles)For a global company, it simply means “that you have to have a major manufacturing presence in China, because of your competition isn’t there yet, they soon will be”, says Beijing-based Gordon Orr, China country manager of McKinsey.

The ability to make nearly anything in China with high quality and a (very) reasonable cost, then sell it to customers both near and far, is having a big impact well beyond corporate boardrooms. China’s emergence as the workshop of the world is, in turn, driving a profound shift in global investment flows – one whose effect is felt most dramatically by China’s neighbours in East Asia.

This “China shock” is put in perspective by George Wherfritz and Mahlon Meyer of Newsweek (February 18, 2002):

Ever since Japan’s own “economic miracle” of the 1960s and 1970s, Asia’s emerging economies have been pictured as “geese flying in formation.” Tokyo used investment and technology transfers to coax neighboring economies to follow in its wake. So-called tiger economies like those of South Korea and Taiwan inherited Japan’s sunset industries – first light manufacturing, and later steel, petrochemicals and shipbuilding. In turn, they handed obsolete technologies and labour intensive industries down the line to Indonesia, Malaysia and the Philippines. The pattern held until China, in the mid-1990s, broke from the flock. Inundated by a flood of foreign capital, much of it non-Japanese in origin, China has since mastered a range of technologies simultaneously – creating sweatshops in Shenzhen, efficient high-tech manufacturing around Shanghai and a budding RD industry around Beijing, all coexisting at once. Countries that thought they could patiently export their way up the technology ladder will now find China waiting for them at every step of the way.

The Middle Kingdom has now taken centre stage.

TECH TALK: An Indian in China: Heart and Head

Shanghai’s new construction surges ahead non-stop. This is what the Shanghai Daily’s lead story said: “This year, the city will double its expenditure on urban construction compared with the 2000 level.An estimated USD 6.31 billion will be spent on 76 projects this year, including new railway lines and expressways and the final stages of an effort to clean up the Suzhou Creek.”

All this happens even as we in Mumbai struggle to build a single Worli-Bandra sea link to ease traffic congestion. The essential difference can be seen in the efforts to build a road on top of the existing Peddar Road in Mumbai. There were howls of protests from local residents, including Lata Mangeshkar, who petitioned that the pollution because of the second road would affect her voice. The plan is now on hold, or perhaps scrapped. That’s the essential difference between Shanghai and Mumbai, between China and India. One nation decides and does, the other seeks public opinion and dithers.

Or so it may seem. India’s democratic underpinnings can be a source of pain at times like these. Action is required to move ahead rapidly.But ask any Indian and not a single one will want to sacrifice the freedom that exists at every level of our society and culture. Rather than being critical of where we are and what we are doing, we need to look at the brighter side of things. Mumbai has seen 50-odd flyovers constructed in the past few years. India is having a spate of expressways being built as part of the Golden Quadrilateral Project. Look at the malls sprouting up in the metros and the second-tier cities in India. Software Services and Business Process Outsourcing will continue India’s ascendance in the IT-enabled services segment. The challenge for us lies in using India’s strengths to build the new India. (See: Envisioning a New India)

As Manjeet Kripalani wrote it in her BusinessWeek.com article:

I think of my native city of Bombay, Shanghai’s counterpart in India. It’s old, it’s grubby and crumbling — but it’s also cosmopolitan, pulsating, and vibrant. The chaos is creative. That’s where the software miracle comes from. Bombay, I think, has heart and soul.

And then I realized something: I felt little heart and soul in Shanghai. Shanghai was all head, and the head works. The soul may be there, but to a first-time visitor the glitter and consumerism dominate.

India needs a forward-looking attitude like China’s — the vision of the future that shows, through the construction of great cities and efficient factories, what heights the Middle Kingdom can reach. And China needs people like India’s — willing to sleep without electricity at night in houses without running water in sole exchange for the right to criticize their government and exercise their vote.

Maybe someday, in both countries, the two great strengths of Asia — heart and head — will meet.

It is not heart versus head. It is about heart and head. The world needs both. It is up to the entrepreneurs in the two countries to build the bridges.

TECH TALK: An Indian in China: First Impressions

Last week, I spent two days in Shanghai. I wanted to get a glimpse of China – a nation whose people and companies are causing sleepless nights for many. A recent issue of Fortune (March 4, 2002) talks about China becoming the “workshop of the world” and the ensuing “China shock” for Japan and many of the other East Asian countries. An article in Newsweek a few weeks ago (February 18, 2002) talked about how “across Asia, the emergence of China as an economic powerhouse has generated fear, loathing – and a dawning realization that the region’s fortunes are now inextricably tied to those of the People’s Republic.”

The immediate cause was a wonderful article on BusinessWeek.com by its India report, Manjeet Kripalani on her first visit to Shanghai. She described Shanghai and China thus:

From the bridge over the boulevard Bund, Shanghai rises on either side of the Huangpu River like a glittering, beautifully plumed bird on the wing. Before me lies a breathtaking vista: the globe-shaped conference center across the river, the restored colonial buildings, shining glass and granite towers in the distance. Think of New York and Paris and Singapore all rolled into one — but far more stunning. This is my first visit to China, and this will be my lasting impression — a nation that’s literally taking flight. One cannot see this without thinking that maybe the 21st century really does belong to China.

So, instead of flying to the US via the oft explored Singapore and Hong Kong, I opted for Shanghai.

Shanghai is a mix of the historic, the recent past and the futuristic. It has been a beacon for international trade for many centuries (“Paris of the Orient”) and has maintained its international flavour, ever since the foreigners gatecrashed into Shanghai in 1842. The local government has poured money into infrastructure and it shows. At one time, it was the largest construction site in the world (a quarter to half the world’s cranes were reportedly deployed in Shanghai in the past decade). Skyscrapers, multi-tiered roads and expressways, an efficient metro system, tourist attractions like the Bund, Shanghai Museum, Nanjing Pedestrian Walk – they are all there.

What is amazing though is what has happened on the east of the Huangpu river. Here, a city has been created from scratch. It is breath-taking. The mix of glass and steel rises above the expansive pavements and roads. The Pudong New Area still has a fresh feel to it. The Jinmao Tower, which also houses the Grand Hyatt, offers spectacular views of the surroundings.

Shanghai is the engine powering China ahead. It has been undoubtedly dressed up for the external world to see and experience the New China. Shanghai’s look-and-feel makes me dream of what Mumbai could have been.

Ironically, even as I was walking the streets of Shanghai awestruck by an “eastern” emerging market miracle, India was burning – struck by a budget that didn’t go far enough and a communalism hatred that had reared its deadly head once again.