Open-Source Software Report

Infodev has published a report (PDF) looking at its use for developing countries. From the executive summary:

– Interest in Open Source Software (OSS) is increasing globally.
– OSS is about choice.
– Government leaders have a key role to play.
– There is opportunity for local capacity development.
– OSS is but one part of an ICT strategy.

One of the sections refers to some interesting and useful OSS projects: Compiere (ERP), Koha.org (Library Management), Linux Terminal Server Project, MySQL and Wikipedia.

Bosworth on Web Services Browser

Tim Bray summarises Adam Bosworth’s speech at the XML conference:

The central point is one that Im very friendly to: that the Web is (obviously) a good model for networked information spaces, and that application architectures that present as an object model or API or query facility, trying to abstract away the Web, dont work. So while there will still be Web Services, they will be in the back-end, and an application will be expected to follow a link, for example from a product to its supplier to that suppliers other products, rather than imagining that theres a query facility that will make the link structure invisible. Specifically, hed like to see a SOAP cookie or equivalent to allow everything to run more statelessly.

As anyone who follows Adams recent writings knows, hes been thinking a lot about supporting intermittently-offline work. He revisited this, arguing that synchronization of offline and online data models is a big and important part of future architectures. Im less convinced on this; the amount of time in which Im awake but not (potentially) online is nearly zero; I travel more than the average person but less than a real road warrior like Adam. Hes correct that people increasingly will be using small-form-factor devices like PDAs and phones, but I think the trend is clear: anyone who wants to will be able to have a fast pipe thats always on.

These are topics Bosworth discusses in his blog.

I have my own thoughts on the point that Bosworth makes about assuming an intermittently connected world (which requires sync-ing of information) as opposed to an always-on world. I think the desire for this offline data model will make devices more expensive and complex. Rather, for emerging markets where affordabaility is important, mobile computing can be accomplished by having thin client cellphones. Yes, it will not give ubiquitous connectivity, but for all practical purposes, countries like India are now blanketed by wireless networks. Competition is ensuring that data is beocming an important focus for the cellcos, so expect higher speeds in the future.

PC-TV Clash

WSJ writes about TVs that are starting to do more of the PC functionality:

Even as traditional PC makers such as Dell Inc. and HP forge deeper into the consumer-electronics industry by offering flat-screen TVs and other gadgets, traditional gadget-makers such as Matsushita Electric Industrial and Sony Corp. are rushing to make their stereos or TVs do things that people normally needed a PC to do.

Of course, the smart gadgets are sometimes powered by old PC technology, or work together with PCs. Toshiba sells a digital-videodisc recorder that hooks up to a PC to search Internet TV-guide sites for programs to record. Microsoft is peddling a version of its Windows operating system geared to run consumer-electronics equipment.

Yet the consumer-electronics makers are also striking out on their own, developing software and semiconductors for their gadgets with little or no help from traditional PC-industry companies such as Microsoft or Intel.

Sony’s latest home-electronics device, a cross between a video-game machine and a DVD recorder called the PSX, already can pull up and play movies stored on its hard drive faster than most PCs can. The PSX runs on a chip Sony and Toshiba developed for Sony’s PlayStation 2.

India can Create Markets

Atanu Dey writes about one of India’s advantages, in response to an exchange we had on the need to create a large domestic market for affordable computing solutions:

The most significant positive factor in India’s favor is its size. It is what we economists call a “large economy”. Large economies have the luxury of changing parameters which define the market itself. In comparison to that, “small” economies have to take those parameters as given (or ‘exogenous’) or external to them or outside their control. In a way, you can consider a large economy to be have some sort of ‘monopoly power’. Monopolies have the power to change one parameter (price) at will which firms in competitive (or oligopolistic) markets don’t have — the latter are ‘price takers’ in that they cannot dictate prices and take whatever price they can get.

So India is large enough to be able to change ‘world prices’. Suppose you were to create a widget which is suited to Indian conditions. Assume that the cost of production of these widgets exhibit economies of scale — that is, fixed costs are extremely high and marginal costs are very low, and hence average costs continue to decline as the volume produced increases. In such a case, given India’s enormous population, the number of widgets required would be high, and thus the average cost will be appropriately low, and therefore the market clearing price for widgets will be low and quantities will be high.

Now replace ‘widgets’ in the above with whatever — “COMPUTING SOLUTION” for instance. Get the hardware that is appropriate for the Indian market developed and get the software developed for the same. Concentrate on the needs of India alone to begin with. Note that hardware and software meet the criteria of high fixed cost and low marginal cost. Marry the hardware and software to create the computing solution, price it just above average cost, and voila! YOU HAVE LIFT-OFF!!

Do we need to create the large domestic market? If by creating you mean bringing the solution to the market, then yes. However, all the ingredients exist. We just have to judiciously put them in them together using the right recipe. I suspect that we are more than up to that job.

Offshoring Benefits

Over the past few months, as the shift in jobs to lower-cost countries like India has accelerated, there as been some concern in countries like the US. The Economist writes that offshoring “promises huge benefits to consumers everywhere.”

The main advantage of shifting business operations to India and similar low-cost countries comes from a combination of lower wages and the improvement in the quality and price of international telecommunications. A report by HSBC says that the cost of a one-minute telephone call from India to America and Britain has fallen by more than 80% since January 2001. With high-grade jobs, the saving on wages is not as high as with lower-grade ones. NASSCOM, India’s National Association of Software and Service Companies, reckons that an IT professional with three to five years’ programming experience earns $96,000 in Britain, $75,000 in America and $26,000 in India. At the other end of the scale, low-grade call-centre jobs that in Britain earn a salary of $20,000 earn less than one-tenth of that in India.

But the benefits of offshoring are not confined to lower costs. An article in the latest issue of the McKinsey Quarterly says that many companies that move their back-office functions offshore miss huge opportunities to reap efficiencies beyond those that come from using cheaper labour. Companies are merely replicating what they do at home, where labour is expensive and capital is relatively cheap, in countries in which the reverse is true. For one thing, offshoring allows companies to work round-the-clock shifts, ferrying data back and forth from one place to another as the sun sets. For another, it allows them to rethink the way they solve IT problems. American Express, for example, paid local programmers in India $5,000 to write some software that it needed. To have bought a software package that could do the same job would, the company estimates, have cost it several million dollars.

For the future, offshoring promises to diminish the effects of the demographic crunch in countries where the ratio of the working population to the total is set to fall. HSBC reckons that America would require an extra 8.6m workers to maintain the ratio at its 2000 level for 20 years. Countries that are reluctant to allow in immigrant workers to do their unfilled jobs now have the option of sending some of those jobs out to the workers, before they even think of emigrating.

Jane Linder of Accenture’s Institute for Strategic Change says that the majority of those who pass on traditional back-office functions to others find, in the end, that substituting a single supplier for many employees allows them greater control and discipline over their operations. At the same time, it frees them to think more clearly about strategy. And the boost to efficiency means lower prices and better services for customers everywhere. That, surely, is not something to fear.

Offshoring combined with business process transforming promises increased productivity for companies. Business has started doing the first part. What will come next is a rethink on how things get done, especially using new technologies built around web services and service-oriented architectures.

VNC and RSS

I think two innovative technologies which will play a key role in the future are vnc and RSS. vnc makes possible thin-client computing, while RSS makes possible the publish-subscribe web. They both allow us to rethink computing and information.

vnc is the magical element which will make for affordable computing. It enables software to be run on servers, and the screens to be displayed on remote devices. The commercial world has Citrix. Think of vnc as an open-source equivalent. vnc still needs about 512 Kbps connectivity between the client and server for acceptable response-time for the user. Hopefully, innovations can bring that down to 64-128 Kbps, making it also possible to use it over wireless connections on smartphones. vnc will thus ensure a centralised information base, accessible from multiple devices (cellphones, PDAs, thin clients).

RSS is a syndication format, allowing information consumers to specify what streams they would like to subscribe to and just receive that content. It is at the heart of the blogging revolution. In the coming months, it will get extended to enterprise events and other areas. Basically, RSS makes information flows manageable. RSS is what has allowed me to amplify the information I access by 10x – in the same time.

Taken together, vnc and RSS will help us reinvent computing for the emerging markets. Will discuss this in greater detail in my year-end Tech Talk series.

TECH TALK: My Mental Model: requires Ecosystems(Part 2)

Debraj Ray writes in his book Development Economics on co-ordination failure:

Pervasive complementarities (the fact that a single individual takes some action increases the incentives for others to take the same or similar action) might lead to a situation where an economy is stuck in a low-level equilibrium trap, while at the same time there is another, better equilibrium, if only all agents could appropriately co-ordinate their actions to reach itAccording to this view, economic underdevelopment is the outcome of a massive co-ordination failure, in which several investments do not occur simply because other complementary investments are not made, and these latter investments are not forthcoming simply because the former are missing!

Adds Chakravorti: Getting an innovation to market requires two thresholds that the innovation must cross on its path to impact. The first occurs at the status quo, the situation that the innovation is attempting to improve; the second is that the new outcome that the innovation seeks to create, where a significant portion of its adopters are made better off. These thresholds share a characteristic that fundamentally captures the way choices are made in an interconnected environment. This is the notion of equilibrium.

The SME technology market as also the rural market suffers from a co-ordination failure. Organisations see the segments on their own and conclude that since no one else is present (or no other services exist), it is not worth their while to enter the segment. Individually and independently, they are all correct. The result is a low-equilibrium situation, one that is not beneficial to anyone, but one which is nevertheless an equilibrium. Life goes on year after year, with a low and slow pace of change.

How does one change the situation? Writes Bhaskar Chakravorti: [A way] into the market is to bring about a multiplier effect by assembling an alternative network. To accomplish this, an innovator devises a business model that is, a value sharing scheme that helps co-ordinate the incentives of players in three interlinking categories: those who enable and add to the benefits of the innovation, those who can distribute it to users, and those who actually benefit by adopting it. The first two categories of players are on the supply side of the network to be created; the last is on the demand side. The purpose, of course, is to synchronize the choices of these players in a mutually reinforcing way.

In other words, all of the problems need to be tackled simultaneously. This requires the creation of alternate ecosystem of entities (or a single co-ordinating entity, as we shall see shortly), each of which moves in tandem with the other, to move the system to a higher equilibrium. This is exactly what both the SME and rural markets need.

Next Week: My Mental Model (continued)

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