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TECH TALK: Disruptive Bridges: My First Computer: Economics (Part 2)

December 19th, 2002 · No Comments

So, we now have a thin client for Rs 150 per month and a thick server available to 10 users or more for Rs 150 per user per month. (There may be some additional costs for the network hub and cabling, which I have not considered here.) Add to this a per-user cost of software of Rs 100 per month, and a support and maintenance cost (paid to a channel partner who also does the marketing and installation) of Rs 100 month (including keeping a spare thin client for every 10, just in case any of the older thin clients stop working and we have a solution which costs Rs 500 per user per month.

From the enterprise point of view, another way to look at what is on offer here is a group of people need to pay Rs 5,000 per month to get a 10-user thin-client and thick server solution. This could be used by 10 users or a group of 25. In fact, I expect that as the benefits of computer literacy become clear to people, they may even contribute a part of the money from their salary there is no other way for them to get to use a computer for as little as Rs 20-25 a day.

Consider the alternatives: a single new computer even today costs Rs 25,000. Legal software to match what is available on the thin client MS-Windows and MS-Office will cost an additional Rs 25,000. Instead now, for less than 25% of the cost, the enterprise is able to get a computing solution. Or in other words, instead of buying one new computer, it can get four thin clients connected to a thick server, providing computing to three people who did not have access to computing earlier.

One of the key players in this value chain is the channel partner who also becomes the facilities manager for these enterprises. These figures by themselves may not seem large from the viewpoint of a service provider, but multiplied over 10 or more installations can provide a good financial base to offer its services and thus become a bridge for the last-mile. For supporting a 10-person organisation, the service provider gets Rs 18,000 a year.

What I have described here may seem like wishful thinking. Why would an enterprise want to give computers to the ones who dont have it as the argument goes, everyone who needs one already has it. Also, whod want to finance an old computer? What about the collection problems? How do we reach all these enterprises? The marketing costs would be just enormous. The questions are endless.

I dont have a whole lot of answers. The way I look it as that a connected computer for every employee needs to become part of the fabric of an enterprise, just like they are provided with a table and chair. This desire (or demand) needs to become a bottom-up one (by the beneficiaries the employees) and be driven top-down by the employers, who will also benefit through increased employee productivity. For the emerging markets and emerging enterprises, computing needs to be thought of not as a luxury, but as a competitive weapon which can give their people and their organisations an edge in the marketplace.

Tomorrow: Scaling Up


TECH TALK Disruptive Bridges+T

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