Recently, I visited Phoenix Mills in Mumbai. The transition in this place is symbolic of the New India. Its what many cities like Beijing, Shanghai, Bangkok and others must have gone through in the past decade. We are seeing it for the first time in Mumbai.
Phoenix Mills is along a stretch of road that was until 15 years or so ago home to the various textile mills. It had slums lining the roads. It was a place one only went to by accident.
Today, this area in Central Mumbai has become the icon of all that’s new. The various mills (Phoenix, Morarjee, Kamala, etc.) have now become home to ad agencies, finance companies, publishing companies, law firms, telecom companies (and even us).
A part of Phoenix Mills now has a bowling alley, McDonald’s, Big Bazaar (India’s version of a hypermart), Planet M (a music store), something called Switch, Barista (the Indian answer to Starbucks), and Funkie Orbits. Stand in the area called “High Street Phoenix” and one could be at a mall just about anywhere in HK or Singapore.
This is the change happening across India. The old is giving way to the new. There is an energy, an optimism in the air. I cannot but contrast this with the news I get from and about the US (tech slowdown, layoffs, sniper shootings). I for one, am confident that the coming decade will belong to the world’s emerging markets, especially India and China. India’s government pulls us back, but its people, and especially its entrepreneurs, propel us forward.
From an interview with Steve Ballmer: “If businesses think there’s a return and they’re interesting, and the users think they’re interesting, they’ll absolutely spend some money. The fact of the matter is, if you take someone whom you pay $40,000 a year or more, and you say, I’ve got to spend a few thousand dollars a year to make that person 30% more productive, it’s not a hard payback equation. Relative to the number of hours you work, if you can get a little bit more productive because information technology is helping you every hour, that’s a pretty good value. This isn’t just a value proposition from Microsoft. This is what the whole IT industry has as its opportunity. ”
This is at the heart of why tech is reaching a stagnation point. Tech companies are assuming they need to provide value to the workers earnings USD 40K per annum, so they can charge hundreds of dollars per person. That market is quite nearly saturated with technology and competition.
The next market is not at USD 40K price-points, but at USD 4K salary levels. How do you convince companies to buy hundreds of dollars worth of software and hardware for an employee whose annual salary may be USD 4K? The return on investment is now not so obvious.
What technology companies need to do to target these next markets is to dramatically rethink what they are providing and the pricing of their products. Computing needs to be sold at 10% of what it is today. To do this requires disruptive thinking and the desire to look for new markets.