Emergic: Rajesh Jain's Blog

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TECH TALK: Technology’s Next Markets: The Home Market

October 25th, 2002 · No Comments

Tech Talk: So far, youve talked of thin clients with a thick server. That solution is good for clusters of people. What about the single user primarily, the home market?

Deviant Entrepreneur: The obvious solution for the home segment is the Linux Desktop. The newer breed of slimmer desktops are available for less than Rs 20,000 in India (or about USD 300 in the US). Linux need to be pre-installed on these computers. The challenge will be getting some of the educational software and games to run most of these are designed to run on the Windows platform. Considering that most home users still do not tend to buy legal software in emerging markets, a Linux PC may not offer significant benefits. For mass market adoption, the end-user prices have to less than Rs 8-10,000.

So, how do we make this happen? Consider the following: take the same TC-TS solution we had talked earlier, and let us see how to extend this to enterprises. The TC-TS solution needs a 100 Mbps LAN. This can be provided in some residential complexes. In that case, the thick server could in one of the homes, from where there is connectivity to the Internet. The last-mile connection today is Ethernet, and tomorrow, it can become wireless with WiFi (more on this a little later).

Alternately, the thin client could come with a hard disk or CD-ROM drive for the Linux OS to boot locally. Linux works well on even the older computers. In fact, the success of Linux in the embedded devices segment can be applied here. A simplified Linux kernel capable of running on older PCs can enable cheaper desktops to be made available for the home segment. Of course, there would be limitations for what can be done on this computer, but for first-time buyers, such a computer would work just fine.

What is needed is to (a) create a distribution system through a chain of computer stores (think of them like tech 7-11s) in neighbourhoods, wherein people can buy, upgrade and get support for their computers, and (b) a pricing model which makes computing a utility. This pricing model eliminates the notion of ownership of computers (the underlying asset in any case is not worth much) in favour of a monthly pricing model, based on the type of computer used and the services needed.

One point about support: in the case of the recycled computers, no real hardware support needs to be provided only replacement of the computer.

TT: What you are really talking of is creating an alternate ecosystem for the bottom of the pyramid.

DE: Exactly! The existing computer value chain has Intel and Microsoft at its core. The new value chain will have recycled computers and open-source software as its lynchpins.

Consider the following: when users in emerging markets buy computers today, most of the money goes out of the country. What if that most of that same money were to stay within the domestic ecosystem? In the alternative scenario that we have charted, most of that money stays within the country, thus enabling the creation of stronger local technology companies. It also provides the necessary incentive for the development of a domestic software and solutions business.

This is not a game that any single organisation can play it needs lots of smaller entities to come together and create a grassroots, emergent network, where the whole is greater than the sum of its parts.

Next Week: Technologys Next Markets (continued)

Tags: Tech Talk

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