The future is closer than we think. IBM recently launched Linux Virtual Services, which, according to the Wall Street Journal, will allow customers to run a wide variety of their own software applications on mainframes in the Armonk, New York, company’s data centers and pay rates based largely on the amount of computing power they use. Under the IBM plan, companies that have applications, such as a database, can move the applications to the new service. The applications would run in an IBM data center on an IBM zSeries mainframe running hundreds of virtual Linux servers at the same time. IBM says such virtual servers don’t interfere with each other and provide as much security as physically separate servers would.
Listen to Steve Nevey, a computer-aided engineering manager: “It’s like using my bank–I don’t want to know about finance or interest rates or investments. I just want to give someone my money and get a return. This is the same thing.” This couldnt be more true for the rest of the world which today hasnt even been exposed much to the power of technology.
Emerging Market Perspective
Let us look at the Tech Utility from the emerging market perspective. Technology needs to be move away from its dollar denominated pricing which limits adoption to becoming a mass market phenomenon, which is used by one and all. To enable this, it has to be priced such that it is affordable for the small and medium enterprises, who make up the weak links in the value chains of the larger companies. This can be achieved by leveraging the latest technologies that is why it becomes important to understand which are the 10X forces that are going to make a difference.
When farmers and fishermen use cellphones, they are unconcerned about how the technology works. They use it because it makes them more productive and efficient (and thus, more profitable). It enables them to leverage information like the weather or the latest prices, which used to be exploited by middlemen. Now, technology empowers them and is at a price point where the cost of the call is far lower than the money that they can make or save by making that call. The cellphone has become a utility in their lives. It is something they will not leave without.
Similarly, computers and the Internet have to become utilities in the lives of the people and the businesses in the emerging markets. That will make them appreciate the world outside, providing for connections and communications that previously were not available to them. The first step in this direction is to make available all the hardware and software they need for no more than USD 20 per month. After that, the entrepreneurial abilities of the end users will make them leverage these technologies in ways that we cannot now imagine. This is because they are leapfrogging much of the intervening incremental adoption of what happened in the West, where computers existed for more than a decade before the Internet enabled their easy and cost-effective inter-connections.
In these new markets, technology can spur the creation of innovative applications and uses very much unlike what we have seen so far in the developed markets. This is because the alternate path leads to nowhere. It is the reason why cybercafes tend to be much more popular in the developing countries. It is why the cellular networks in India are better than the US. It is why pre-paid cellphone cards account for nearly half the mobile phone market. It is why the real future of Linux and open source lies in these markets not just on the server, but on the desktop. It is why MMS (multimedia messaging service) is likely to take off in these markets, just like SMS. It is why community wireless networks will find their biggest users in these markets.
The alternatives simply do not exist, and there isnt time to go through the in-between steps. Either they embrace technology as a utility whole-heartedly and leapfrog to have a chance of improving the quality of life of their people, or or they fall further and further behind, and become inconsequential. The choice is clear.
Technologys impact in these untapped markets can be much greater and deeper.
Two different worlds, Two different approaches, One common dream. Technology as a Utility. It is an idea whose time has come.
Tech Talk: Envisioning A New India: The Tech Utility (January 28, 2002)
SME Tech Utility (February 26-March 2, 2002)
Tech Talk: Disruptive Technologies: The Tech Utility (August 31, 2002)
Next Week: Techs 10X Tsunamis (continued)