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TECH TALK: Technology’s Next Markets: Early Adopters

October 24th, 2002 · No Comments

Tech Talk: Who will be the early adopters of this solution?

Deviant Entrepreneur: There are two types of markets for the open-source-based thin client-thick server (TC-TS) computing solution. The first is what I call as a sustaining technology market, and the second is a disruptive technology market.

As a sustaining technology, the TC-TS solution is an incremental technology for mainstream markets, whose attraction is primarily that of (a) cost reduction (b) virus protection (c) use of existing hardware, and (d) simplifying management by centralising it on the server.

As a sustaining technology, there are three conditions under which the TC-TS solution will be adopted by existing computing users. First, it becomes a replacement for the Microsoft Windows-Office desktops, necessitated by the need to switch to legal software. Second, it is driven by a desire to extend computing to more people in the organisation. Here, the motivation is to make the people:computer ratio as close to 1:1 as possible. Third, new hires can be given a thin client desktop, thus cutting down on the infrastructure cost for expanding staff. This can apply to new offices or branches where computing has yet to make its presence felt.

In the replacement scenario, one will run into strong user resistance they are likely to have been using the Windows platform for a long time (either legally or illegally with pirated software), and will be highly opposed to moving to what they consider as an inferior, second-grade platform.

Two factors can aid the transition in this segment: a push from the top management because the cost savings can be very significant, and the creation of innovative applications (an example is the Digital Dashboard) which can help improve productivity for thin client users.

The second type of market is where TC-TS is treated as a disruptive innovation here, it is used to open up new markets which previously could not afford computing because of its high cost. This is akin to the mass market of consumers who cannot afford to pay Rs 200 (USD 4) for a pizza but will pay Rs 20. This is the Invisible Market because it does not exist as of today. This is where disruptive innovations make their entry.

Consider educational institutions keen to set up computer labs. Now, for the price of 3 new fat desktops, 10-12 of the thin clients (with a thick server) can be provided. The same computer lab concept can be extended for setting up community centers in rural areas. This is the way to now bridge the digital divide. Providing a TC-TS solution in segments like schools and colleges also empowers users to create applications for the local markets, which can further drive adoption. TC-TS becomes the foundation for enabling computer literacy everywhere, and opening up new worlds for people whove never experienced computing.

This is the base that emerging markets need to create. Computers can automate routine tasks (imagine the impact in government workflow) and help make people more efficient and productive in whatever they are doing. It also creates an electronic flow of information via email and documents. This is the grassroots revolution that can help emerging markets tip.

We have seen this with cellphones in countries like China and India (and in fact, much of East Asia). Cellphones have connected people who were living in islands, providing them with new opportunities for conducting commerce. Computers have the power to do the same. They are the tsunami which the people at the bottom of the pyramid in the emerging markets need to leapfrog.

Tomorrow: The Home Market

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