My belief is that the likes of Intel, Microsoft, Sun, Oracle and Google are not the ones who will build and capitalise on this new platform. The company or the set of companies to build the network computer and the grid will emerge from the developing countries.
For the likes of Intel and Microsoft, the network computer is a disruptive innovation. Their existing customers in the developed markets are not asking for it. These companies, even though they have the greatest resources at their disposal, are unlikely to want to upset their gravy train of billions of dollars in profits from today’s users of computers each of whom is well ensconced in an upgrade cycle that delivers new hardware and software every few years.
Intel doesn’t really have an emerging market strategy. It offers its dollar-denominated chips to these markets with the belief that as the economies grow, adoption will increase. And so it has been happening. Growth is 30-40% in countries like India and China. The irony is that it could be many times that if the network computer were integrated with the rest of the ecosystem (grid, broadband, software and content).
Microsoft’s emerging market strategy seems to be low-cost, limited functionality, local language versions of Windows XP (called Starter Editions). This is a flawed approach, as I wrote recently on my weblog: Microsoft is caught between piracy, non-consumption and Linux in the developing markets. Rather than low-cost, reduced functionality Windows, it should look at reducing cost of the desktop computers (think thin clients) and running Windows off centralised platforms, with a pricing of $1 per month. Not just the limited versions, but the full-featured versions. But this requires Microsoft to think not like a monopoly but like a utility company. [Also see some of the comments from readers as part of this post.]
Google is the other option. It has the reach and the cash to bring such a strategy to market. But it will not focus on devices. It will continue to focus on software, and will probably opt for the browser as network computer approach. It will build out services on its computing platform and work on delivering them to desktops, cellphones and other devices via a Google-branded browser. Google is after all a media company, and is focused on increasing the space that it has to serve its ads. [One could argue that controlling the virtual desktop on the network computer would be the ultimate prize of them all.] What Google lacks, like Intel and Microsoft, is an understanding of emerging markets.
The opportunity then is for a new network of companies, each focused on key elements of the emerging computing ecosystem. This company has to be born in the emerging markets because these will be the first markets. Local context is important, and it is hard to get this when management is sitting a few timezones away. This is the opportunity for entrepreneurs in India. So far, we have been offering services on computers to global companies. The time has now come to offer computing as a service to our own brethren and their ilk across the developing countries, the middle and bottom of the global pyramid. Can we do it?