Economist on Azim Premji

The Economist profiles the Wipro chief:

Wipro is one of the country’s biggest, fastest-growing and most valuable information technology firms. Since 2000, Mr Premji has tripled his firm’s profits, to $230m, and more than doubled sales, to $1.2 billion. On a good day in the stockmarket, the 84% of Wipro that Mr Premji owns is worth $13 billion. If any of this has gone to his head, however, Mr Premji hides it well. Modest and quietly spoken, he seems vaguely embarrassed by his status as India’s richest man. His conspicuous under-consumption says something about the status of his company, too. Financially, Wipro goes from strength to strength.

Mr Premji’s own good-works outlet is the Azim Premji Foundation, a not-for-profit organisation which spends $5m of Mr Premji’s money a year on improving India’s elementary education, concentrating at home in Karnataka. Dileep Ranjekar, the foundation’s chief executive, remembers that Mr Premji started thinking in 1998 about how to leave a legacy. They came up with a laundry list of three areas: health, nutrition and education. They chose education because it affected the other two on Mr Premji’s list as well. But $5m does not go far in a country in which more than 400m people cannot read or write. That, ultimately, indicates the real scale of the political challenge facing India’s booming IT industry. And it dwarfs the problems Mr Premji has had to face in America.

3G Lessons

WSJ writes about the lessons learnt in Asia:

Lesson No. 1: Phones need to be sleek and small.
Lesson No. 2: Target the youth market.
Lesson No. 3: Teaming up produces results.
Final lesson: Don’t make companies bid for new parts of the wireless spectrum to offer 3G.

In heavily networked Japan and South Korea, young people such as Ms. Suzuki don’t think twice about using their mobile phones to create short movies, watch the Webcam inside their home or download pop songs from the Internet. In South Korea, people can even watch live, streamed television on their phones — one operator offers eight channels — and use their phones to make bank transactions or buy movie tickets.

That is a sharp contrast to the U.S. and Europe, where advanced mobile services driven by high-speed Internet connections only now are getting off the ground. “You typically see [phone] innovation in Asia first, and then it makes its way over to North America,” says Perry LaForge, head of a Costa Mesa, Calif., telecommunications trade group called CDMA Development Group.

Consumers in the U.S. and Europe may never go wild for advanced “third generation,” or 3G, phone technology like the mobile-phone aficionados in South Korea and Japan. Still, industry executives say lessons can be learned from those nations that could speed the adoption of 3G technology in the West.

Exploding TV

Fred Wilson writes about a discussion on “about Video On Demand (VOD), TV delivered over phone lines (IP TV), Video on the Internet (Streaming), and Downloadable Video (Bit Torrent)”:

I believe we are going the way of downloaded TV over the long run. What should the content owners do about this? I think they should recognize that the ad sponsored content model can work in a downloaded world. They should cut ad avails into their programming, hard wire an IP address into those ad avails to pull an advertisment off of their servers, and then let the programming go wherever it will go. In an always on world, they’ll get the ad impressions they always got, and probably a lot more.

Who is going to build out the infrastructure for this new world of exploding TV? I am not sure, but I do hope they stop by our offices and tell us what they are doing. Because we want to invest in this trend.

[Via Fred] TV Harmony argues for Video-on-demand:

for a large percentage of the population, VOD, especially if it expands to becoming a centralized DVR, is likely going to be the easier solution.

the battle will ultimately be played out on HDTV. The cost of HDTV is getting lower each day, and more and more people are buying HDTV-ready sets. More and more content is being delivered in HDTV format, and it won’t take too much time before people demand HDTV streams as a viewing preference. HDTV content will ultimately have a “broadcast flag” making reproduction more difficult for people, and the size of the files will increase.

video’s relationship with people [is] different than the relationship people have with music. People listen to music over and over again, but in general, video is a single use commodity for the most part. This changes the calculus slightly in that the pain to download a video has to be less than the pain to download a music track, or it doesn’t seem worth it.

content providers have an excellent opportunity to create their own services before the suffer a napster-like meltdown.

Next Billion Conference

David Weinberger blogs about a conference “sponsored by VON and hosted by the Berkman Center, called ‘The CEO Forum on the Next Billion: Finding ways to move access to communication from 1 billion people on earth to 2 billion and beyond.'”

David writes about a talk given by Tom Evslin of Evslin Consulting:

Tom says that wifi is the next VoIP, an industry/infrastructure ready to take off.

He’s worried about the lobbies arrayed against VoIP. He recommends the VON Coalition as a counter-lobby. He also thinks that, although he’s generally a free market guy, some regulation may be required to ensure that “the last mile monopolies aren’t used to stop the provision of services.” Maybe, he says.

He says that the movement of support jobs to India is a huge success made possible by the low cost of communications. A middle class is growing in India. But not in sub-Saharan Africa. He describes instances where communication has transformed poor villages in Bangladesh. The same model worked in Uganda. [Here’s the model as described in the Grameen Foundational Annual report: “Today there are over 25,000 village phone operators in Bangladesh. Phone Ladies earn extra income for themselves (an average of $71 per month, more than twice the average Bangladeshis monthly income), while allowing others in the village to conduct business or keep in touch with friends and relatives from a distance.”]

He says he thinks he knows how the industry is going to go. “Think of a box,” he says. It has to be self-powered. It’s satelllite linked to geostationary satellites. The box has wifi or wimax coming out of it. “This box, dropped almost anywhere in the world, creates a cloud of IP connectivity over a couple of square miles, depending on the geography.” This, he thinks, is a better solution than the phone ladies reselling the existing cellular network. And, besides, people need more than voice. They’ll need all sorts of IP connectivity. At first, people will use the cloud with cheap wifi phones, but eventually computers will get there. “Even if the box doesn’t make engineering sense, and it makes anticorruption sense because it doesn’t need to connect to a monopoly.” He talks about the need for microcredit and maybe subsidies, but, as much as possible, these boxes and the provision of services over these boxes (which need not be the same) should have a local stake with local gain in order to encourage development.

Judith Meskill adds:

Ethan ZuckermanGlobal Internet, actually and truly globalhow do you build the on-ramp to making this a reality. There is no charitable way to go out and provide this access to the world, must be for profit. Low cost way to start global dialoguebringing IP dialtone to the rest of the world. VoIP becomes WHY broadband comes into play. The reason people are putting up the money is high quality IP connectivity.

[via Anish Sankhalia] David Isenberg writes on his take-aways:

1) Tom Evslin has the right idea — a stand-alone connectivity box, the analog of a village phone. I am consistently impressed with Tom’s grounded insights and his entrepreneurial humanitarianism.
2) I was delighted to meet Ory Okolloh, a Berkman student, a Kenyan, an articulate questioner with an infectious smile and a worthwhile blog. Ory’s excellent perspective on Next Billion day is here. I was also pleased to meet Richard Whitt, author of “A Horizontal Leap Forward” which puts forth model legislation for the next telecom act, notable because the proposed law is structured much like Internet architecture.
3) I was gratified that the two people who I think know the most about connecting the under-developed world were there. Monique Maddy had the best idea for a village phone that I’ve ever heard of — when the population is illiterate, you must have voice, and when teledensities are so low that the probability of having a face to face conversation is approximately zero — and she actually implemented such phones until conflicting goals of her two types of investors (VCs and NGOs) came to a head. And Iqbal Quadir, who founded Grameen Phone, which implemented the village phone idea in Bangladesh and, in a year when B2B and B2C were flying around coined the term B3B for the bottom three billion, the planet’s poorest humans. I felt privileged to be in the room with these two.
4) The person with the biggest chance of helping bring most of the next billion on line said almost nothing. Jeffery Paine President of UTStarCom, which sells mostly in China, sat quietly and left early. I was disappointed. Nobody else was there who represented China. The next billion online will almost certainly be 50% (or more) Chinese — why’d we miss this opportunity?

Joel Spolsky Interview

Excerpts from the Microsoft Watch interview:

I think Google is orthogonal to Microsoft. Microsoft will be chasing their tail lights. I wouldn’t say Google is really a challenge to Microsoft. Or maybe they are. Maybe Google is to Microsoft what Microsoft is to IBM. In the 1990s, Microsoft’s nemesis was IBM. IBM was a boring, established company. (But then the PC revolution happened, and Microsoft sailed past IBM in that space.) Google is saying the Internet is the computer it’s the Internet computer in the sky. And Microsoft’s not getting it.

But one of the mistakes Google is making is applications like Gmail are great on the Google platform. But if Google was really paying attention, they’d say we have to have outside developers writing applications for Google. There should be 27 different e-mail systems using the Google infrastructure. And then they can become Microsoft. It will be interesting to see if Google will wake up and open themselves to developers. The (current) Google API is incredibly narrow and not open.

I don’t see a lot of innovation (with the core Office product). And what I do see is a lot of churning – like new XML file formats. It’s like cars. The newer models look a little bit different. You might want the newer one for the fashion. There’s a lot of great stuff in Office that people still haven’t discovered. But they don’t want to learn it. They just want to get their jobs done.

TECH TALK: Massputers, Redux: Ballmer Talk

Microsofts CEO Steve Ballmer spoke at a conference organised by Gartner last week. News.com has more on what he had to say:

“The biggest problem we have right now is that people who should be paying for software aren’t,” Ballmer told an audience of technology executives at an industry conference here sponsored by market researcher Gartner.

One way to stem piracy is to offer consumers in emerging countries a low-cost PC, Ballmer said. “There has to be…a $100 computer to go down-market in some of these countries. We have to engineer (PCs) to be lighter and cheaper,” he said.

People in poorer countries have one low-cost computing option, Ballmer said. “They have a leased-PC concept: the Internet cafe. Pay-by-the-drink computer use–that has a very important place in the market. (Microsoft) has five times as many Hotmail users in India and China than there are PCs because of this,” he said.

Ballmer said piracy of Microsoft’s Windows and Office software in emerging markets has become a major concern for the software giant, especially among business users who can afford to pay for software.

“PCs are not selling to the lower end of the population in China and India. People buying machines there are relatively affluent. So…should the prices be lower? Not really. Until government and situational factors reduce piracy…those people…don’t pay,” Ballmer said.

But lower prices have become part of Microsoft’s strategy for gaining market share in developing nations. In recent months, the software maker has announced plans to introduce low-cost “starter editions” of Windows XP into countries including India, Russia and Thailand. These versions will be bundled only with entry-level PCs and will not be available for retail sale.

The Microsoft CEO bristled at the suggestion that Linux is gaining in popularity as a client operating system at the expense of Windows. “There’s no appreciable amount of Linux on client systems anywhere in the world,” he said.

So, Steve Ballmer wants a $100 PC, probably on a pay-per-use model. Hopefully, in his unstated view, this will make hardware cheaper and entice more people to pay for software (that they currently pirate), especially Microsofts software. Before I provide my views later in this series, here is what a commentary on ZDNet UK said:

Once again with the grace of a lithe gymnast rather than a rotund middle-aged executive, Ballmer has managed to skip around the big, fat elephant squatting in front of his nose and find another excuse for why the inhabitants of poorer countries are opting not to pay his company’s licence fees.

Microsoft has made some stabs towards shifting the licensing pachyderm recently but only after considerable external pressure. A cut-down, cheaper version of Windows XP, the so-called Starter Edition, is now available in Russia, India, Thailand, Malaysia and Indonesia — all hotbeds of pirated software. But crucially, Starter Edition is only bundled with entry-level PCs and not as a standalone product — which isn’t much good for anyone with a functional existing machine with no plans or resources to upgrade their hardware. What are their options, Steve?

Ballmer’s missed another point. Anyone can build a $100 machine right now, just not one that will run Windows. Linux, however, can be shoehorned into anything. Its cost of licensing means that you can spend every last cent on hardware, and $100 these days buys you bits just as good as $4,000 spent 20 years ago when the PC first broke cover.

So if Microsoft is serious about encouraging computing in the developing world — and we have no reason to believe otherwise — it has to come up with more convincing arguments than this. It has to support the most cost-effective way of bootstrapping IT on the other side of the digital divide, and that means active promotion of free and open-source software. It can cash in when the billions of people it thus helps become richer — and able to move up to the more expensive, (but oh so superior, right, Steve?) Windows alternative.

Tomorrow: AMDs $185 computer