An article on Zaplet in the San Jose Mercury News says: “Zaplet was supposed to be the new, new thing. Instead, the company’s plan to sell its software for collaborative e-mail to individuals and businesses has flopped….Zaplet is now throwing its resources into winning government contracts, hoping to tap into the $38 billion soon to be spent by the government on homeland security.”

Zaplet was a cool company when it started…it had a way to do “magic” via emails — opinion polls, live updates, collaborative apps, and much more. I even remember us trying to “reverse-engineer” what Zaplet was doing — we are after all in the messaging business. It was after all, a Vinod Khosla (Kleiner-funded) company.

The problem was that even though the demos could be neat and cool, the real applicability was still not clear. I still think email applications have a part to play in the future, though I’m (still) not too sure how they’d work and what they’d do. The combination of Email-IM-SMS may provide an answer.

Simputer and the Mass Market Internet

A story in the Financial Express Simputer’s A Year Old, But No One’s Celebrating: “The fate of the much-hyped Indian portable computing device, Simputer, is hanging fire as it awaits commercial acceptance over a year after its launch….Only around 200 Simputers have been sold so far and most of them are being used either in small pilot projects or in research activities.”

In 2000, I had looked at low-cost devices to help create a mass market in India. In fact, my first Tech Talk talked about the vision of using low-cost devices to provide Internet access to 100 million Indians.

The vision is right, the problem lies in how we implement it. The approach many Indian companies are taking is to look at reverse-engineering PDAs and reducing their Bill of Materials. I had treaded along a similar path. My realisations were that (a) it would be extremely difficult to bring the cost down for anything which is custom-created to less than USD 200-250 (Rs 10-12,000) initially (b) the process is very time-consuming and expensive because manufacturing is done typically in Taiwan (c) initial investments are large because one has to look at volumes of 5-10,000 units or more.

My opinion is that for a mass market device to succeed in India the price-point has to be Rs 5-6,000. By selling at double this, the current set of devices limit their market and will only find niche applications.

When I see multiple companies going down this path, I get the feeling that we are trying to focus on the invention rather than solving the need. Yes, there is a great joy in holding an Indian-made device running Indianised versions of Linux (in local languages) but at what cost?

Lets think like entrepreneurs rather than researchers. We need to build the computing base in India first. We need to play to our strengths — which lie less in hardware, and more in software. We need to bootstrap this process — without investing too much money or spending too much time.

This is the thinking that led me to abandon the custom-PDA/device option and focus on leveraging older computers as Thin Clients. These PCs (and I have one on my desk) work just fine for the limited set of applications that most people will ever need to do. The price point for a 3-year-old PC (including colour monitor) is Rs 6-7,000.

Even in India, we can easily generate a base of 1 million second-hand PCs. If we need more, import them from the US or get NRIs to donate them. Volumes are not a problem. And in no case will the price point go beyond USD 150. Focus on writing the software applications on this platform.

Blogging Communities

Matt Mower writes about Creating Communities From Thin Air:

What I have in mind is a program, I haven’t thought of a name so lets just call it blog connector (BC for short), that you can register your blog with. BC then indexes your blog and creates a list of key words that it thinks are relevant to the content on your site. You are then asked to prune, extend and rank the keywords.

Then BC takes a look through all the other blogs it has indexed looking for blogs whose keywords have similar rankings. It checks to see whether you are already linking to those blogs and if not it sends you a suggestion that you might want to check out that blog and/or link to it. It also applies the same criteria to the other blogs, optionally sending them similar information about your blog.

Matt, we are working on just such a thing with BlogStreet. The first part would be a directory and search engine. The second part of it would work on automatically identifying clusters of blogs (and bloggers). Probably hard to do with keywords only — it will need a mix of looking at the blogroll, links and the text in the blogs.

PS as TC?

I remember reading somewhere that Sony plans to drop the price of its original PlayStation to USD 49. If so, that would make it a good Thin Client candidate! Make the Enterprise Software as a video game, get low-cost TVs, and there’s a great alternate environment going in enterprises. Some work, and lots of play! Battling competition might then become killing off some off the enemy orcs on the screen…

Open Source Enterprise

In response to my post Emergic Update, Krishnan writes:

I am regular reader of your column in Tech Samachar. I came across your blog after reading your column last Friday. While I find your ideas truly original and blog very interesting to read, I am afraid I can’t understand the rationale behind sharing details of your progress with Emergic with the world. Isn’t this information your company’s “Intellectual Property” ? Don’t you feel sharing it with the world might hurt you more than it helps you in the long run?

Good questions. Why am I putting out the ideas and the progress in public? Should this not be proprietary and confidential? Will this hurt us or help us? My take on this is:

– Ideas are plenty. What differentiates is the execution and the sequencing. The Emergic ideas, while being original in part, are also built upon various things that I am seeing others do. I believe that no one has put them together like we are trying to do. I have spent the better part of the past year thinking through these ideas. That is much harder to replicate. Theres a lot more to the thinking then what appears on the blog. The blog is like an iceberg: theres enough visible, but theres a lot underneath the surface also.

– For small companies like us, it is important to use our knowledge in the development of the mass market. We need to be able to attract like-minded people and form clusters of people and companies. To succeed, we need clout and influence disproportionate to our small size. The web and the blog is perhaps the most cost-effective way of doing so. By being open and transparent to what we are doing, I hope to attract partners and prospective customers over time.

– Updating our progress on Emergic is, to me, akin to putting up our software in the open-source. Yes, anyone else can also take the ideas and concepts and customize them in their own way. But, it also means getting more to build on a similar platform. It means harnessing the minds of many. This, according to me, is our only chance of success in the ambitious tasks that we have set ourselves to do. We need to become thought and action leaders. I am confident that we are on the right track with Emergic. I am willing to let the blog create a record a public record of our success or failure. Only time will tell whether this was the right decision or not.

– I like to think of what we are doing as open-source enterprise. I think in the coming years more and more entrepreneurs will want to write about what they are doing. It helps them build a network of virtual friends who may have gone through or are experiencing challenges similar to the ones they are. As an individual, there may only a few things that I can do. But as a collective, theres so much more that we can accomplish. Think of it as Emergence where the whole is much smarter than the sum of the parts.

TECH TALK: Rethinking Enterprise Software: Trend 1: New Markets

The next action arena in enterprise software is going to the small and medium enterprises (SMEs) segment. SMEs typically lag the big companies in technology adoption by 3-5 years. The Internet is enabling companies to interact much more closely across the value chain, and SMEs are now the weak link in the chains of the bigger companies.

The SME opportunity is significant because this has the potential to be a huge mass market for enterprise software. Leave aside the 10,000 big companies of the world, and there are about 25 million SMEs. Their spending power can rival or even exceed what the big companies have spent in the past few years. But to target these enterprises, it will be important to rethink on how software is delivered to them. Few companies have sold successfully to SMEs.

The nature of SMEs differs across markets; what may be considered as a medium-sized business in India is perhaps a small business in the US. What SMEs do have in common is the need for cost-effective enterprise software solutions which help them move ahead into the eBusiness era. SMEs need a whole solution which provides them an integrated information and transaction system across the enterprise. SMEs do not have the time, inclination or expertise to patch together various specialised vertical applications. So, while the bigger companies are more likely to go for best-of-breed applications, SMEs are going to prefer software suites.

The notion of software as a service is best applicable to this market segment: they can pay for software (and perhaps other technology requirements) on a monthly basis, like they would pay for the other utility services they use (electricity and telecom). So, in theory, ASPs should have done well targeting SMEs no up-front payments, no upgrade hassles, no need to hire specialists. But even the best known of the ASPs ( has only succeeded in garnering just over 4,000 customers in its 3 years of existence. This is because they may be focusing on the wrong markets the real opportunity lies in the emerging markets of the world. SMEs in these markets have far fewer choices and a much greater need to automate or risk being left behind.

But to target these SMEs, an ASP solution by itself is unlikely to work. It needs to be complemented by software which can run as a service on the local network within the enterprise. This eliminates two problems that have plagued ASPs Internet connectivity issues and the reluctance for SMEs to have their company data residing elsewhere. So, one approach to tackling the SME enterprise software market is to create a distributed computing environment, with the software available on local networks on a server (think of this as a LAN ASP) and data being replicated across locations to provide a near real-time computing environment.

If we look at India and at the software usage among SMEs, the opportunity becomes evident. Most SMEs have built their software platforms using a mix of email, MS-Office (predominantly pirated) and an accounting application like Tally. To this are added custom applications developed by local software companies on a need basis. The market is very fragmented. Besides Tally in Accounting, no other company has established dominance in any of the segments. The international enterprise software companies have not succeeded in penetrating beyond the bigger companies because of the high costs of their applications and customisations not many in India can afford dollar-denominated pricing.

The SME market segment is there it needs disruptive thinking in terms of how the software needs to be developed, packaged and distributed. One source of help is coming from the growth in standards both for software and for business processes.

Tomorrow: Standardisation