Prakash Advani outlines the reasons for using Linux: Save tax payers money, National Security, Vendor (In)dependence, Foreign exchange savings and Encourage software development. He argues for government agencies to lead the way.
Fortune compares desktops with laptops and concludes that “as long as your usage pattern resembles the norm, the lowest-cost, highest-performance option for your company is a desktop.”
I feel the same way about desktops. That’s the thinking behind focusing on using desktops and not PDAs or other small devices as part of the effort to bring computing to the mass markets. People need the power of a computer. The only difference is that much of the world can, with intelligent use of software, use 3-4 year old desktops equally effectively, and bring down cost of ownership by 70-80%.
That is our thinking in the Thin Client-Thick Server, with second-hand PCs serving as the desktops.
11 of them, so far, dating back to 1995.
Alsop’s contrarian view on ASPs: “There are a couple of ASP-style companies now doing good business. Their secret is that they don’t rent services that are core to corporate IT; they don’t try to get companies to trust the heart of their computing to someone else. Instead, they have shown IT managers that they can do a terrific job running discrete applications. In such cases companies may well prefer to rent rather than license software….The two providers that I’m thinking of are Webex and Salesforce.com.”
Our approach with the Thick Server is that of an “distributed ASP” — an ASP on the LAN instead of the Web. This way, we get past the connectivity issues so prevalent in emerging markets and the “I-want-my-data-in-my-office” desire.
We are starting by focusing on the core IT infrastructure with the Thin Client-Thick Server approach. But our target segment is one that hasn’t been exposed much to computing. The discrete (and integrated) business applications will come over time.
You’re seeing less changes on the top, but obviously there are changes taking place underneath…[The browser] will have to have voice. But the most important thing is that the marketplace will change. Browsers will be available on other kinds of devices. People have been waiting for this for some time, and everyone agrees that it’s just a question of time. Mobile phones, for example, now have WAP (Wireless Application Protocol) browsers. Over time, we will see a full browser on mobile phones with more advanced screens and hardware. You will also see more set-top boxes and TVs using the Web (browser). Cars, too.
The browser will be there, but what’s needed is a kind-of Digital Dashboard on top of it. So, when I login, it automatically open the browser on my desktop with multiple tabs to my new read-write environment built with RSS Aggregators and Blogs. Going to sites using browsers is what we do now. In future, I think we will be using browsers more as an interface to navigate information that comes to us.
One company to watch and learn from is Intuit, It is exclusively focused on targeting small companies. This year, its been making acquisitions of other cos. targeted at small businesses, the latest one being Eclispe. [News.com story].
Here’s a little older story providing some background, also from News.com:
J.P. Morgan analyst Adam Holt said there’s still a lot of potential in selling products tailored for specific business segments, as the main competition for [Intuit’s] QuickBooks is smaller companies that make software and have only niche products. By coming up with its own approach and selectively acquiring companies such as American Fundware, a specialist in accounting software for nonprofits that Intuit agreed to acquire earlier this month, Intuit can offer customers the best of both worlds.
“It’s a highly fragmented marketplace,” Holt said. “You’ve got a lot of little solutions-providers targeted at individual vertical markets, but there isn’t anybody with Intuit’s brand name, balance sheet and installed base that’s rolling out vertical products. I think they’re really well-positioned to succeed there.”
Intuit is also working to use the strength of QuickBooks to sell other services, such as payroll processing.
We will also need one “killer platform” to build on. Can that be the Thin Client-Thick Server platform? Or the Digital Dashboard? Or Messaging?
Economist on Auctions: “For all their promise, many auctions have strangely disappointed. For online auctioneers, a problem is that customers face costs in time spent bidding, and the risk of losing the auction. Fixed prices can work better if they reduce time spent buying and the risk of not getting what you want. This may explain why few auction websites – eBay is the notable exception – have prospered.”
In a section entitled “Integrator-in-Chief”, the Economist writes:
It is a truism, of course, that if America does bad things or makes bad mistakes, others will criticise it, shun it or even oppose it. It is best, however, to think about this emerging issue of American power and leadership in three ways:
– America’s power relative to its rivals’ and to other alternatives, including its allies.
– America’s power relative to the challenges it faces around the world, and what it might achieve by using it.
– America’s power relative to its own willingness to use it, or to keep bearing the costs of maintaining and using it.
This survey will explore those topics, and the questions they raise. Its answers – be warned – will be optimistic, and will generally be favourable to the United States. Certainly, American leadership will produce mistakes. But without American leadership, worse things would happen. And if any other country were in the lead, there would be much greater cause for worry.
Re-read the above replacing America and US with Microsoft and country with company.
An article on the legal issues surrounding the sale and licencing of software: “We’re just making a one-time royalty payment for a perpetual license to use this software. You see, each program in this box is distributed under a license agreement. According to that agreement, we’re not buying copies of the software, we’re just getting a license to use it, subject, of course, to various restrictions, including restrictions on resale.”
Glue, Gaia, and the services grid: : “Graham Glass, the wizard behind The Mind Electric, is ‘100% sure’ that grid computing is the future. To prepare for it he’s building Gaia, which in its first incarnation will be used to do simple, lightweight clustering and load-balancing of web services. Those services, initially, will be Java-based and written in TME’s SOAP toolkit.”
May be interesting to look at Gaia as we think about how to build a component framework for the enterprise applications using Web Services. We can think of the Thick Servers as forming a P2P network, a computing grid.
Let us work out the total computing costs for a 40-person enterprise. One Thick Server can support 40 Thin Clients. I have assumed that the cost of a Thin Client is USD 150 (instead of the USD 100 discussed above). We should look at the costs over a 3-year-periodthe assumption being that even the SMEs will upgrade their systems every 3 years (thus lagging in hardware by no more than 3 years). So, the total costs taken over a 3-year period are:
- Thin Client: USD 150 one-time, with USD 15 for support per annum. Also, assume there is 1 spare TC kept for every 10 TCs. Thus, the total cost over 36 months is USD 200 per user, or about USD 6 per user per month (pupm).
- Thick Server: A standard, new desktop can be used as a Thick Server, with the additional need for RAID (to mirror the data on the hard disks). Add to this support for backup. The Thick Server will cost about USD 1,200 with an additional 10% per annum for support. Thus, the total pupm cost becomes USD 1 (or a total of USD 1,440 over 36 months and 40 users).
- Internet Connectivity: Assuming USD 40 per month for Internet access gives a pupm cost of USD 1.
- Networking: Putting in place the LAN with the hubs/switches will cost the equivalent of USD 1 pupm.
- Training and Support: USD 1 pupm.
- Software: The base modules discussed earlier Enterprise Core and OS, with the Digital Dashboard and Visual Biz-ic should cost no more USD 5 pupm. (If enterprises want specialized components, then they would need to pay extra. This also creates the incentive for software developers to build on the base platform.)
Thus, the aggregate costs for an installation of 40 computers come to USD 6+1+1+1+1+5 = USD 15 pupm. Add to this the costs of marketing and margins for the channels and it should be economically viable to build a profitable business by selling the whole solution for USD 20 pupm. The economic model may be quite simplistic, but one which I think is definitely achievable. Thus, as a whole, the 40-person enterprise pays USD 9,600 (or Rs 5 lakhs) per annum for its entire computing and communications needs. Any company earning a profit of USD 50,000 (or Rs 25 lakhs) can definitely afford to invest 20% of its profits on technology to become a real-time enterprise.
Whats new here is not the technology, but the business model. It has taken the concept of a utility to its extreme, creating the ultimate SME Tech Utility with hardware, software and support being offered as services. Therein lies the trick. For example, if we were to sell the Thin Client for USD 150, there would be few buyers who wants to buy a second-hand computer? But by offering computing as a service (and the TC on a subscription basis as part of a larger solution), IT managers will no longer look under the hood. The analogy is with cars. When we buy cars, we want to make sure they are perfect. When we rent cars (or pay for the service of transportation), we are no longer so concerned as long as the car works and the rental company offers to cover all problems, if any. For SMEs, technology needs to become a utility this will lead to mass-scale adoption by a whole new generation of users.
This then is the overall vision for making technology a utility for SMEs in emerging markets. At its heart is enterprise software built out of inter-changeable components and to standards by a distributed network of factories in the form of the independent software vendors. The software itself is only part of the solution. What SMEs need is a whole solution. All the elements of the solution are actually available today. No new technology needs to be developed to deploy them. What is needed is innovative thinking in ensuring that the whole is truly greater than the sum of the parts.
As we think about how to create new solutions, it would be good to remember these words from Esther Dyson:
In the world we live in, mathematicians and investors have become ever better at calculating risks, assessing outcomes, laying out possible scenarios. But real economic progress comes from taking challenges, not risks, and building something fantastic despite the odds, because you know you’re smarter and more dedicated and more persistent, and you can gather and lead a better team, than any rational calculation would indicate. That’s how new businesses get built, new markets get opened, new value gets created.
And real political, social and ethical progress, likewise, comes not just from negotiating a carefully calibrated “win-win” balance-of-power compromise, matching move for move, but from taking the lead, challenging the other guy to follow, showing the way forward. We make progress by stretching the imagination and doing things we won’t regret. When you cannot predict consequences, then you need to consider your conscience and do what’s right.
We need not calculation, but courage!