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Bus. Std: VoIP, Wi-FI and Network Computers

December 29th, 2004 · No Comments

My latest Business Standard column:

In this series, we are discussing cold technologies which Pip Coburn, a managing director and global technology strategist in the technology group of UBS Investment Research, defined as those that have neutral revenue or even anti revenue attributes. Cold technologies are important in our context because even as they shrink the investment that users have to make, they help them catch-up or even leapfrog to a world that is faster, better, cheaper in terms of the digital infrastructure that we need to build out in India. In the previous column, we covered two such cold technologies: open-source software and software delivered as a service.

Voice-over-IP

Internet telephony is turning the world of telcos upside down. From being able to charge by distance and time (based on where the called party was and how long the conversation lasted), phone calls have become a fixed price commodity as they are shifting to the Internet. We have also seen this in India with phone calls to the US being advertised for under Rs 2 per minute as compared to nearly Rs 100 a few years ago. Software like Skype offers free person-to-person calling via computers.
The Wall Street Journal put the disruption in the US market in perspective: The Bells have lost some 28 million local phone lines since the end of 2000 — a drop of more than 18%. This is the first time since the Great Depression that phone companies have seen their lines decline. The Bells are now losing 4% of their residential lines a yearBehind the telephone earthquake is a giant force in business history: Just a few years after the Internet investment bubble spectacularly burst, the Web is now maturing and irrevocably transforming commerce. Today phone calls — just like music, photos, and video — can be turned into digital information and delivered much like e-mail over the Internet.

Wi-Fi

Mobile phone companies globally have paid tens of billions of dollars for licences for 3G. The world on offer: ubiquitous, high-speed Internet access. The problem: the future may arrive unscheduled! This is happening because of Wi-Fi (which uses unlicenced spectrum) and other next-generation data technologies.

Wi-Fi Networking News puts this in perspective: If users get hooked on Wi-Fi networks that are free to access, they may decide to go out of their way to find a free hotspot rather than pay for the cellular access which at least these days is far more expensive. However, its likely that a certain market segment will pay for the convenience of having the higher speed wireless data from the cellular operators in more locations.

Underlying this shift is what Kevin Werbach has called the radio revolution. The combination of unlicenced spectrum and adaptive mobile phones can dramatically change the way we think of spectrum and what we pay for it. Werbach wrote in the introduction of his report: The radio revolution is the single greatest communications policy issue of the coming decade, and perhaps the coming century. The economics of entire industries could be transformed. Every significant public policy challenge could be implicated: competition; innovation; investment; diversity of programming; job creation; equality of access; coverage for rural and underserved areas; and promotion of education, health care, local communities, public safety, and national security.

Network Computers

The twin challenges of affordability and manageability are making companies consider alternatives to Windows desktops. The use of thin clients in emerging markets can reduce upfront costs and also tackle the complexity challenge. From small- and medium-sized enterprises to education, network computers have the potential to tackle the issue of non-consumption that has hampered the buildout of the digital infrastructure in developing countries.

Even though the idea of thin clients and network computers has been around for a long time, it is only now that serious interest is emerging along with the first success stories. ZDNet wrote recently about Europcars shift: The car hire firm has saved on hardware and maintenance costs by migrating its 1,500 stations to thin clients running Linux, but Stefan Ostrowski, the CIO of Europcar, said that while migrating to Linux thin clients has saved them money, but it would not have been as cost effective for them to migrate fat clients to Linux. The effort to install or maintain Windows and Linux is the same, though you might save a bit on licence costs, said Ostrowski. You are not saving a lot by moving fat clients from Windows to Linux. But by converting fat clients to terminal servers we have reduced the total cost of ownership by 60 percent. The main advantage for Europcar in migrating to Linux terminals has been the ability to centrally manage the terminals in its 1,500 rental stations, which are spread across Europe. Ostrowski said this has dramatically reduced the cost of maintaining the systems and in particular the cost of implementing updates.

This series will continue in the next column.

Tags: Bus. Std. (ICE World) Column

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