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TECH TALK: The Next Billion: Distribution

September 12th, 2003 · No Comments

One of the important challenges the industry will face is reaching its users the individuals in the homes, and the SMEs everywhere. They are two different segments, and we will address them separately.

Homes

For the home segment, the connectivity is a critical component of the solution because the desktop (virtual PC) needs the server to be useful, just as the TV needs to cable operators satellite dishes and head-ends to be able to show anything on the screen. There are various possible providers who can become technology operators the telco, the cable operator or the gas company. Each of them has a pipe going into the customers home, and has a billing relationship. Alternately, independent internet service providers can also provide the service.

The connectivity between the home and the operator will be a high-speed network over Ethernet, fibre or wireless. The servers will be at the operator premises, connected over a multi-megabit connection to the various homes in the neighbourhood. The end-device (our virtual PC) is very much like the phone maintenance-free. It either works or doesnt. If it does not work, it needs to be replaced. The user can do nothing which will require a customer visit (which is expensive) to fix problems. A centralised call centre can handle application-related and service-level queries.

SMEs

Much of the distribution chain for reaching small- and medium-enterprises already exists in the form of the assemblers (the white box sellers) who aggregate the various components that go into making a thick desktop today. The assemblers already know the SME customers well, acting as their de facto IT managers and advisors. However, the business of the assemblers has been squeezed in recent times, as technology has become more of a commodity. While prices have not changed much, margins have come down.

The new server-centric computing architecture promises to re-invigorate their business by making IT a critical and affordable part of the enterprise DNA. By advocating the concept of a computer on every desktop and elaborating on the advantages of using computers, the assemblers can now address todays non-consumers the 80-90% of the SME that does not use computers.

The assembler can ally with local training institutions to not only provide the end-user training on how to maximise the business benefits from computing and the Internet, but also create demonstration centres (showcases) where prospective buyers can see, touch and feel the technology prior to purchase. Training institutions are present in every neighbourhood across emerging markets their business has been affected by the slowdown in technology. This new approach creates additional business opportunities by leveraging their existing infrastructure to service the new markets that are being created.

Summary

We have seen this week how an affordable computing solutions can create a price point, which is a third of todays price point. This will help open up technologys invisible market the billion buyers across SMEs and homes in the worlds emerging markets. Next week, we will delve deeper into the innovations that are required as part of creating the next-generation computing and information architecture.

Next Week: The Next Billion (continued)


TECH TALK The Next Billion+T

Tags: Tech Talk

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