Inside Google

Fast Company writes about Google and how it keeps growing:

It is a joint founded by geeks and run by geeks. It is a collection of 650 really smart people who are almost frighteningly single-minded. “These are people who think they are creating something that’s the best in the world,” says Peter Norvig, a Google engineering director. “And that product is changing people’s lives.”

At Google, building and then following the traffic makes perfect sense. It’s central to the company’s culture and its operating logic. Consider this: For the first 18 months of its existence, Google didn’t make a penny from its basic Web-search service. Only then did it make the transition from great technology to great technology with a critical mass of users.

And Google was able to package that traffic in ways that seem both ingenious and completely synchronous. The search service itself remained free. But Google has, for example, sold untold numbers of ads pegged to specific search keywords.

Advertisers don’t just pay a set rate, or even a cost per thousand viewers. They bid on the search term. The more an advertiser is willing to pay, the higher its ad will be positioned. But if the ad doesn’t get clicks, its rank will decline over time, regardless of how much has been bid. If an ad is persistently irrelevant, Google will remove it: It’s not working for the advertiser, it’s not serving users, and it’s taking up server capacity.

A recent article in Business Week on the search engines estimated Google’s revenues to be about USD 375 million, with EBIDTA of about USD 150 million. Quite remarkable, compared with Yahoo’s revenues of just over USD 1 billion.

IT Productivity

McKinsey Quarterly writes about how companies can maximise their gains from their IT spends:

The first is to identify the productivity levers offering the greatest opportunity for competitive differentiation: Targeting the few specific levers that could well create a competitive advantage produces results more reliably than striving for improvement everywhere. The most promising IT initiatives usually evolve along with related business processes and build on an organization’s operational strengths. When taking this route, companies should beware the siren song of IT success stories from other industries, because the levers that matter in one sector may be irrelevant in another.

The second priority is to master the sequence and timing of investments. Many technology-based advantages, particularly those that don’t involve fundamental business changes, have a limited life because they diffuse rapidly through the sector. Timing is therefore critical if IT investments are to generate returns. Companies that get it right develop a clear understanding of how IT-enabled competition is evolving in their sectors. Investing ahead of the pack makes sense if the technology is hard to mimic, continues to yield benefits even if imitated, or offers great near-term value. Otherwise, companies can often hold down their spending and boost their returns by diving in only after others have made investments–and mistakes.

Customer-driven IT

News.com has an interview with David Moschella who says: “The main point is that IT market leadership is migrating away from its traditional focus on hardware and software products, and toward IT services. It is these services that will prove most beneficial to those companies trying to use technology to create important new value for their customers and/or industry. Implicit in this is a greatly increased emphasis upon so-called vertical (industry-specific) markets and solutions.”

He adds: “It would appear that this cooperative model will also play an important role in many of today’s customer-driven frontiers. Think about the cooperation needed for successful business exchanges, interoperable health care, effective copyright protection, and all manner of emerging industry-specific metadata and standards. The strong de facto leadership that has determined so much of the IT industry’s past is becoming steadily less important, although it will never fade away altogether. Once again, new cooperative entities are emerging. The control of these entities will be one of the great opportunities of the next few years.”

Security and Convenience

TheStreet.com writes that the “killer apps for investors will probably be software that enhances security and permits seamless roaming between all types of wired and unwired networks.” It builds on the WiFi theme, provide some ideas for solving the connectivity issues in rural areas:

Several well-financed start-up companies have already begun to sell advanced wi-fi transmitters, amplifiers and antennas that allow just about anyone to become a freelance telecom carrier by broadcasting a single broadband signal across a wide area.

The pioneer in this field is Glenn Wilson, president and founder of M33 Access in northern Michigan. Frustrated that none of the telecom carriers would bring high-speed Internet connections to the depressed countryside surrounding his hometown of Rose City, Wilson figured out how to buy a hodgepodge of parts from Florida-based online retailer HyperLink Technologies and rig up the country’s first renegade high-speed wireless ISP.

He now operates the largest consecutive wireless broadband grid in the country — about 100 square miles — with no telecom carrier involved, by beaming the signal from one self-rigged 200-foot-tall tower to the next. He sells wireless broadband to farmers, homes, school districts and small-business owners for as little as $25 a month (if you have a child in school, he’ll cut the price to $15). In a few weeks, Wilson plans to be able to add voice-over-Internet to his list of services, which will allow him to offer virtually free local and long-distance service at 4 cents a minute.

“Our company is about bringing Michigan out of Hooterville,” he says, referring to the ’60s-era TV show “Green Acres” in which communications was handled by tin can. “We’re causing the regional Bells some problems. We have 6,000 customers and they love us — no one is going to move in and take them away.”

Wilson uses Cisco routers at his head end and Orinoco-brand wi-fi radios made by Proxim; he runs the whole thing on Intel-based servers. But the whole operation, which obliterates the need for million-dollar switches made by old-school manufacturers like Lucent Technologies and Ciena, isn’t going to make equipment investors rich. The stuff is just too cheap, not to mention easy to upgrade and maintain.

The Cheap Revolution

Rich Karlgaard, writing in Forbes, asks what’s common with Google, China, India and WiFi? He labels it the “Cheap Revolution”. This is akin to UBS Warburg’s discussion about “cold technologies” recently.

Writes Karlgaard about WiFi: “France Telecom lost $23 billion in 2002. How? Like many other European state-owned telecoms, it had foolishly forked over billions for 3G wireless spectrum a few years ago. Whoops. Now comes dirt-cheap Wi-Fi and a host of other off-the-rack wireless wonders. It’s like the scruffy PC versus the minicomputer all over again.”

TECH TALK: Transforming Rural India: Gyandoot

Gyandoot was launched in November 1999 as an intranet in Dhar district of Madhya Pradesh connecting rural cybercafes catering to the everyday needs of the masses. It has been since extended to other districts in MP. It was awarded the Stockholm Challenge IT Award 2000 in the “Public Service and Democracy” category. Said the citation: “Project Gyandoot is a unique government to citizen Intranet project implemented in a tribal district (Dhar) in Central India, with numerous benefits to the region, including a people-based self-reliant sustainable strategy. Gyandoot is recognised as a breakthrough in e-government, demonstrating a paradigm shift which gives marginalised tribal citizens their first ever chance to access knowledge, with minimum investment.”

The Gyandoot website lists the services that are available:

Commodity/ Mandi Marketing Information System
Income Certificate
Domicile Certificate
Caste Certificate
Landholder’s passbook of land rights and loans Rural Hindi e-mail
Public Grievance Redressal
Forms of Various Government Schemes
Below Poverty Line Family List
Employment news
Rural matrimonial
Rural Market
Rural News Paper
Advisory module
E-education
Driving License
Khasra (Land Record) Nakal Avedan
Varmi Compost Khad Booking

A World Bank summary on the project explains the context and the approach:

The Dhar district in central India has a population of 1.7 million; 60% live below the poverty line. The goal of the Gyandoot project has been to establish community-owned, technologically innovative and sustainable information kiosks in a poverty-stricken, tribal dominated rural area of Madhya Pradesh. During the design phase of the project, meetings were held with villagers to gather their input. Among the concerns highlighted by villagers was the absence of information about prevailing agriculture produce auction centre rates. Consequently, farmers were unable to get the best price for their agricultural produce. Copies of land records also were difficult to obtain. A villager had to go out in search of the patwari (village functionary who maintains all land records), who often was difficult to get hold of as his duties include extensive travel. To file complaints or submit applications, people had to go to district headquarters (which could be 100 miles away), resulting in a loss of wages/earnings.

The Gyandoot project was launched on January 1, 2000 with the installation of a low cost rural Intranet covering 20 village information kiosks in five Blocks of the district. Later, 11 more kiosks were set up. Villages that function as Block headquarters or hold the weekly markets in tribal areas or are located on major roads (e.g., bus stops) were chosen for establishing the kiosks. Seven centers are located in towns (urban areas), 8 in large villages with a population of 5,000-6,000, another 7 in medium sized villages with a population of 1,000-4,000, and the rest are in small villages with population less than 500. Each kiosk caters to about 25 to 30 villages. The entire network of 31 kiosks covers 311 Panchayats (village committees), over 600 villages and a population of around half a million (nearly 50% of the entire district).

Kiosks have been established in the village Panchayat buildings. Information kiosks have dial-up connectivity through local exchanges on optical fibre or UHF links. The server hub is a Remote Access Server housed in the computer room in the District Panchayat.

User fees are charged at the kiosks for the services provided. Local rural youth act as entrepreneurs, running these information kiosks along commercial lines.

Rajesh Rajora was the Dhar district collector who initiated the Gyandoot project. His presentation in a TICAD workshop in July 2002 discusses Gyandoot and other ICT case studies from India. TIME magazine had a story on the project (June 4, 2001 issue).

A report by the Centre for Electric Governance at the Indian Institute of Ahmedabad discusses the project based on a filed study conducted in May 2002. Its conclusions:

As an experiment, the Gyandoot project can be considered path breaking. It attempted to use the ICT in improving the delivery of government services to the rural community. At the time of conceptualization, it was a unique idea, not tried by many in the world. The project was launched during the period when the entire world looked at the web-enabled solutions as a new opportunity of reaching customers directly and improving customer relations.

It is very clear that the power supply, connectivity, and backend support (with new value propositions) are the essential pre-requisites to benefit from such technological advancements. Several such projects in the enterprise sector have failed, resulting in the dot com burst simply because they could not provide cost effective, sustainable solutions with improved value to the customers.

In achieving its intended objects, however, Gyandoot cannot be considered a success. In spite of being in existence for more than two years, the usage of the system has remained far below acceptable levels. The current status of the project illustrates that ICT alone cannot improve the service delivery to rural poor. Significant re-engineering of backend processes and introduction of services that directly contribute to the poverty alleviation are needed to make such initiatives sustainable.

The study team would conclude this report by stating that Gyandoot should address the main objective of servicing the rural citizens through improvements of the back-end processes and involvement of dedicated government officials. Current ICT solutions are too costly for the level of usage being experienced. The challenge for the management of the Gyandoot system lies in enhancing the services to make the system cost effective, while benefiting the rural poor, without worsening the digital divide.

A discussion paper by Naveen Prakash has additional information.

Tomorrow: Bhoomi, eSeva and Information Village

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