Emergic: Rajesh Jain's Blog

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Emergic

May 9th, 2002 · No Comments

Emergic is at this stage a concept. It means combining emerging technologies to create solutions for emerging enterprises (SMEs) in emerging markets like India. Emergic is about taking the vision of “computing and communications for all” to the next 500 million users in the world — most of whom are in the world’s developing markets. They cannot pay for technology denominated in dollars. They need cheaper hardware, software and communications.

Some of the key ideas in Emergic are Thin Client-Thick Server, Digital Dashboard, Integrated eBusiness software, WiFi for Community Networks, Weblogs (BlogStreet and Emergic.Org) and SME Clusters.

Thin Client-Thick Server: Computer penetration in SMEs in countries like India is very low. The installed base of computers in India for example is about 6.5 million, of which about 3.5 million PCs were sold in the last 3 years. Software on the desktop is mostly pirated. The root of the problem lies in the cost of the PC. It is USD equivalent * Exchange Rate + some duty component. It needs to be priced according to PPP (Purchasing Power Parity) — roughly USD 100 for the desktop, and not USD 700 as it is currently. How can we make this happen? Use Second-hand PCs from the western world — these should be available at very low-cost. Keep the motherboard and the monitor, dump the hard disk and CD-ROM drives. Make the machines as thin clients. Use Linux on the Thick Server (any current desktop).

Digital Dashboard: Use Instant Outlining and Knowledge Blogs the first building block of a new, shared collaborative workspace on the Thin Clients. A simple reading and writing environment, integrated into the IM client and the Browser. Within the enterprise, this becomes the primary RTW (read-think-write) platform, and one which can be easily shared across employees. This is different from the “thick client” and P2P platforms in the developed markets — this is because we want to use the newest technologies but on 3-4 year-old PCs.

Integrated eBusiness Software: ERP+CRM+SCM+ERM+whatever else is needed within the enterprise. But, a fraction of the functionality of what the BigCos like SAP, Siebel, i2, Oracle, etc. provide at no more than USD 5 per person per month. All the apps are integrated together using Web Services. Its what Larry Ellison talks about — the ultimate enterprise software suite.

This is the SME Tech Utility. Think about it. All the computing one needs at USD 100 in the first year (for a 3-year period, with USD 10 per annum for maintenance in the next 2 years) and software for USD 60 per annum. Over a 3-year-period, the total cost of this “Tech Utility” is no more than USD 300 (or roughly USD 10 per month). Now, anyone earning more than USD 100 per month (Rs 5,000) can be given computing (hardware and software) on the desktop. As long as they can improve their productivity by 10%, the investment is recovered. This is where the next 500 million users are going to come from — they are the ones who have not been using computers so far because they cannot pay for it. They are at the bottom of the enterprise pyramid. This is the Emergic Opportunity that lies ahead of us.

WiFi can be used to build high-speed public access community networks. WiFi (802.11b) is being seen as the solution for wireless LANs. But in emerging markets, what is needed is low-cost, high-bandwidth connectivity to the network. Cable, DSL, etc. will take a long time to roll out. WiFi uses open, unlicences spectrum. Let entrepreneurs set up wireless access points and start offering the services in the neighbourhoods, taking bulk bandwidth from the ISPs.

Weblogs can become the SmallCo’s marketing tool. This is the approach we have chosen. We intend to tell you all our ideas, thinking and actions — what we are doing to implement this vision. Weblogs empower the amateurs in writing and the SmallCos in marketing. Weblogs are also a discontinuity in the world — for the first time, the Web is becoming two-way. Our efforts are in two directions: to keep you updated through this Weblog on what we do, and how we see technology and events from a non-developed-country perspective, and secondly, by launching shortly a Weblog directory and indexing engine. Google is great for the Web, but we need something smaller and different for the blogs. Watch out for BlogStreet!

SME Clusters is what will get formed as SMEs create their own blogs and community blogs. As the small people and companies of the world come together, it will have a magical effect — Emergence, where the whole will be much greater than the sum of the parts. SMEs can together make a big difference to the world of trade and commerce. The Internet has so bridged them only from a communications point of view. Imagine if they can, using software standards like Web Services and business standards like ebXML, combine their businesses together like Lego — what will the whole look like?

Think Hobbits and Middle-Earth, and then extrapolate to Middle-Enterprise.

Middle Enterprise

Middle-Enterprise is the world which exists between the consumer/Soho market and the BigCo enterprise market. There are 6 billion consumers and 10,000 Big Companies. Between them are 25 million Small and Medium Enterprises (SMEs), what we call Middle-Enterprise.

It is a world which is hard to reach, it is a world which has for long been neglected. And yet, this is where most of the worlds economy is driven from. Middle-Enterprise is todays Middle-Earth. A lot of the Middle-Enterprise comprises the corporate poor of the world, the bottom of the corporate enterprise pyramid. This is what has been largely left untouched, especially in the emerging markets of the world, with all the technology revolution of the past 10-20 years. In this world, for many, it is like time has stood still. This is the next battlefield. This is the Final Frontier.

Target Market: the SMEs of the world, especially in Emerging Markets
Holy Grail: make SMEs Intelligent, Real-Time Enterprises
Objective: Reduced Cost of Computing and Communications in the Enterprise
How: SME Clusters, aggregations of SMEs; building a fellowship, a coalition
Solution: SME Tech Utility, Emergic
Economic Driver: Profit per SME Cluster
Trojan Horse: Building an SME Distribution System

The scope of what we want to do is awesome: first, we are trying to combine hardware, software and communications to create a new enterprise technology architecture for SMEs; second, we are combining technology with content to attract SMEs; third, as SMEs come together, they will aggregate into SME Clusters, which become micromarkets; fourth, we will help SMEs grow by providing an infrastructure for microcredit and putting them in touch with other SMEs, creating a virtuous positive cycle to attract new SMEs. Growth is the only survival technique for SMEs. This is what Emergic will enable.

In Jim Collins book Good to Great, in the chapter on The Hedgehog concept, he asks three questions which I have answered here:

What can we the best at? Aggregation of technologies, concepts, SMEs. Have the worlds best clusterings. And from these clusters build emergent behaviour. This means we are not inventing new things. Assimilation, imbibing new things as they come and applying them into our framework. Good at copycat, imitation, low-cost. Also, leveraging the Internet as a medium for distribution and aggregation. We should be the best at using the Internet it runs in our blood since 1994. Its what I spend most of my day at! Better use of existing tech, better integration than anyone else.

What drives our economic engine? Profit per SME is one way to think of it. Obvious. Wont cause us to think out of the box. It will cause us to milk each SME which will be counter-productive and self-defeating. Better is Profit per SME Cluster, per SME micromarket. This changes the game. First, it makes us look at aggregations/clusters/groups as we should. Need to market indirectly. Second, makes us think of all the kinds of groupings by industry, profession, social, affiliation, association. Keep on thinking how best to segment SMEs. Think of each cluster as a Walgreens convenience store and work on maximizing profit per store. Yahoo eGroups has the micro-classifications but they havent taken it to the next level. Need to build an emergent/self-organising layer. In fact, we can even think of SME Clusters being present in the BigCos think of clusters as decision-making units.

What are we passionate about? The Underdogs, bottom, the ordinary, the average. The forgotten masses, people and cos. like us in countries, markets, areas no one really cares about. The Ants individually little, but collectively great. Bldg a new India. Leverage new tech and the Internet. Leapfrog over the BigCos and the Developed Markets.

A Personal View

Emergic is a venture on a large scale (in terms of how many things we have to sync together). For us to succeed, we have to get lots of the details right. The 3 cornerstones of this will be built around:

Aggregation / Integration — of various technologies: we are not necessarily going to create new things, but we have to integrate existing things (content, tech) better than anyone else. In Samachar, we aggregated content; now, its going to with technologies. There is no way sitting in Bombay we can invent the next new thing. Innovation has to come from the way we put these things together.

Clustering — leverage the micromarkets and communities which exist by providing them a platform to interact; create SME clusters in a self-organising manner so its scalable. The economic driver (a notion from Jim Collin’s Good to Great) to maximise: profit per SME Cluster.

Understand the Internet better than others — this is what I think is a strength of mine. It is what helped in 1994 (for IndiaWorld) and this is what will help me now. Just the time spent and knowledge of what is possible and not possible in the “virtual” world. If we can leverage this, it also means we can achieve economies of scale without spending a lot of money. We have to push the envelope in what can be done with the new Web, the two-Way Web and the new WWW — Web Services, Weblogs and WiFi.

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