Bus. Std: New Markets for Future Technologies

My latest column in Business Standard (ICE World):

As we look ahead to 2005, the rapidly converging areas of computing, communications and consumer electronics are creating an unprecedented set of opportunities and threats. My belief which has got reinforced over the past year is that it will be the emerging markets like India will define future technologies in the. While the top 10% of these markets are just like their counterparts in developed markets (the top of the pyramid), there is a big chasm which separates the top from the middle.

It is this chasm which presents an opportunity for entrepreneurs and established companies. This middle of the pyramid needs homegrown solutions which are not just priced differently but also may need different business models. This market segment is not just about making things faster, better and cheaper (not all of which are necessarily possible simultaneously) but also about focusing on the utility and value that the device or service provides and building specific solutions to address those needs.

Think about the planned Rs 1 lakh car from the Tatas. It is not just about taking the Indica and trying to cut costs dramatically. To build the car, the Tatas will have to fundamentally rethink every aspect of the car and the corresponding value chains. They did a similar exercise when they came up with the Tata IndiOne hotel in Bangalore to offer a room for business travellers at less than a thousand rupees. Disruptive thinking is the need of the hour.

Entrepreneurs in India have a great opportunity. As Indias consumer class burgeons, there is an opportunity to not just provide solutions to them but also propagate these solutions to other emerging markets globally. India serves as a laboratory to try out innovations and a large, first market.

For the bottom of the pyramid thinkers, the middle is what comes first. The way to the bottom is via the middle. Just as the top globally is almost similar, the middle across emerging markets is very similar. And that is the market that needs to be addressed first. India may have 700 million people in rural areas, but it also has 300 million in urban and semi-urban areas. These potential customers comprise a huge target market of families across 45 million households, 40 million employees across 3 million small- and medium-sized enterprises, and 100 million students across schools and colleges. They are the ones on the edge. The right solutions can help provide new windows of opportunities for them. This is the first market for Indian entrepreneurs.

Besides thinking about the markets outside the top 10%, there are three other guiding principles which I apply to my thinking and writing as we seek out opportunities across these markets: services, subscriptions and ecosystems.

For the next markets, it is important to think of the services that the solutions provide. The target customers have limited resources. So they need to be convinced of the value that the solution provides. For example, instead of talking about computer hardware specifications, this market needs to know what they can do with a computer. That old marketing adage of customers needing a quarter-inch hole rather than a quarter-inch drill is perhaps most apt to describe the marketing approach that is needed for this segment.

The middle segment is also more likely to adopt a monthly subscription-based model than one which requires a large upfront investment. Reliance Infocomm recognised this fact when they launched their mobile service and converted the handset capital expenditure into operating expenditure. This is partly about EMI (equated monthly installments) and partly about offering flexibility of upgrades in a technology world that is rapidly evolving.

Finally, the solution provided needs to address the entire backend ecosystem, rather than just the silo that it is operating in. For example, to target computers to this segment, it is necessary to think about the connectivity and services (applications and content) that will be provided because that is the value chain the computing device is a part of. At times, it will become necessary to reinvent all of the elements of the ecosystem to provide a whole solution that is not just cheaper but also more desirable and manageable than the current offering.

We are at a fascinating point of time. Even as new technologies converge (and diverge) providing us with an amazing array of options and opportunities, we are also part of one of the fastest growing economies in the world. We can build not just the India of our dreams but also create the next Intel, Microsoft, Cisco, Nokia or Google for the middle of the pyramid across emerging markets out of India. As Alan Kay said, The best way to predict the future is to invent it. And that is what Future Tech is about.

Future Techs first column was published on December 17, 2003. There have been 27 columns so far. (All columns are available at http://www.emergic.org/futuretech.) The goal of Future Tech during its first year has been to provide insights into future directions in technology, especially from the perspective of emerging markets like India.

An anniversary is always a good time to look back at what has been and introspect about the future. In the next three columns, I have compiled my best ideas over the past columns. After that, it will be back to predicting the future by working towards inventing it!

The Next Platform

Rafe Needleman writes:

For years I have been hearing startups pitch the idea of the “information furnace” – the computing appliance that consumers would install in their home the way other utility appliances are installed – in the basement, out of sight and mind.

Until recently there was really no need for such an appliance in the vast majority of households; desktop and laptop computers supplied all the processing, communication, and storage that most people needed. But with the growth in digital content that consumers are now storing (photos, music, and video files, not to mention e-mail archives), and the growth in broadband-connected, multi-PC homes, the era of the home server “appliance” may finally be dawning. In fact, we may soon start to see people “place-shift” their content using small servers and the Internet, the same way “time-shifting” was enabled by VCRs and videotapes.

Here are my thoughts on what I think of as the next platform:

It will be a multimedia-enabled thin client with server-based computing (via LAN-Grids and Operator-Grids) over Broadband, and available to users as a service (say, $15 per user per month – for device, server platform, broadband connectivity, remote management, and support).

It has a DSP in the thin client to do video and VoIP. The desktop thin client will also be complemented with a mobile thin client (a cellphone). All data is stored on the server, so users don’t have to think of “my computer” because they have ubiquitous access to “my data.”

The view on the client is adjustable depending on the device — big display at home/office, and small display with the mobile phone. In addition, the thin clients will have some local memory and processing power to support “occasioanlly connected computing.”

Mediaah is Back!

Pradyuman Maheshwari is back with his “Mediaah” blog. His latest Monday memo discusses citizen media:

To better appreciate blogpower, lets hypothetically consider I am a student and have nothing better to do in my summer vacations. I decide to set up a blog on Delhi, and with the help of collegemates and friends in and around the metrop, I get read to cover all types of happenings. The response is lukewarm initially, but a friend of mine was at the scene of a crime at, say, Connaught Place, and he used his cameraphone to click pictures and flashed the news to me on phone within seconds. I used a contact to reach out to television channels and newspapers telling them that I have live footage of the camera, and by the next morning, my site becomes the most popular thing around town!

What Ive stated is a piece of fiction, but to those of us who are in the business of news are well-aware that the above is eminently doable.

However, its not that all of this cannot be accomplished by traditional media. Use the power of the medium to your advantage. Grow a blog yourself, and develop a citizens-aggregated news offering. First on the website, with an incentive that if the news is really good, it will find its way in print/ television. Encourage the use of webcams, digicams and cameraphones and let people file their stories to you round the clock.

VM-enabled Polycore Computing

Jon Udell points to an article in The Register by Azul’s Shahin Khan: “A major shift is coming. Over the next few years, your ordinary applications will be able to tap into systems with, say, 7,000 CPUs, 50 tera bytes of memory, and 20 peta bytes of storage. In 2005, Azul Systems will ship compute pools with as many as 1,200 CPUs per a single standard rack (1.2 kilo cores! – I like the sound of that!) What would change about application design if you could do this? Well, think back to what applications were like when you had just 128K of memory in your PC and a 512KB hard drive. The difference between the capabilities and flexibility of applications in those days and now is the level of improvement that we are talking about.”

Windows XP Starter Edition

Paul Thurrott has some good words for Win XP SE: “Speaking with [the Group Product Manager for Windows XP Starter Edition Mike] Wickstrand, Wickstrand, and to a lesser extent actually using the system, provided me with a much clearer perspective about Windows XP Starter Edition, which is not the crippled dog that critics have described it as. Indeed, Wickstrand’s story about the XP Starter Edition team and its dedication to actually meeting the needs of real users in disadvantaged parts of the world is quite inspiring. Far from its reported destitution, XP Starter Edition is, in fact, a triumph of cooperative product design, one that simultaneously meets the needs of users, governments, PC makers, and Microsoft itself. In my book, that’s a win-win. As for the future of XP Starter Edition, I guess we’ll have to wait and see how the pilot program performs. But from this point in time, with the pilot program just two-fifths of the way through a multi-month rollout, Windows XP Starter Edition looks like it has a bright future. It’s just too bad that the ivory tower critics can’t see beyond their own insular worlds to understand that truth.”

TECH TALK: Microsoft, Bandwidth and Centralised Computing: Comments (Part 2)

Todd Knarr: I think theres two counter-arguments. The first is games. Games are driven by incredibly data-intensive graphics. Even modern broadband connections have a hard time handling the data-flow needed to generate high frame rates in detailed 3D-rendered games, especially considering the bandwidth-usage caps ISPs impose to prevent overly-heavy use of the connection. Secondly, local control. The current P2P-vs-RIAA war is a case in point. Users want X, but its not in the content providers interests to allow X. The upcoming generation of users arent going to want to turn control over to entities whove already proven willing to cut off the very things that generation of users wants out of their computers. I think those two things are going to be, as always, the things that block movement of the PC out of the hands of the user.

John: The comments so far make clear that there are two distinct factions. One side is the staunch personal-computer group. They want full autonomous control over their own machines; Power to the People! (As Steve Jobs was fond of saying, back in the 80s). The other camp, which I believe is far larger, is the information-appliance crowd. To them the computer is much like their automobile. These users have no interest in how it works, but simply wish to use it as a tool, and are actually happy to let others maintain it.

Myne: Main problems with Terminal based computing are local storage, security, reliability, bandwidth, memory and processing power the time of mainframe terminal computing has long passed. It still has some useful niches but no amount of bandwidth can compete with local computing.

W3bbo : the remaining issue is NOT bandwidth, but rather Latency. And theres no way that a terminal services, Citrix, or VNC client is going to match the reaction time of a local machine. Period.

/ \/ /\ /\/ : What is suggested is remote administration – not remote applications. Picture this, on your home PC (not a thin client), you will have an OS running from the HD with all local programs. Only difference is that you will not have root/Administrator privileges on it.

Hgit: No one has mentioned the ace in the hole that the big Telcos are going to offer. That is a java card that will hold/control your session. Think of it your dad gets ADSL installed, the rep comes to his house with a book sized terminal client or LCD monitor (no moving parts, no noise) plugs him in and presto everything he needs. But he is also supplied with a java card that he can carry around – whenever he visits someone with an ADSL thin client setup he can insert his java card and his desktop session magically reappears. This type of setup is easy and cheap for the Telcos and is being testing as we speak.

Andy: Everyone wants to personalize what they own. Some people prefer sports cars, some people prefer luxury cars. A mass thin client approach just doesnt fit with that. Having cookie cutter applications for every single person isnt going to work.

Snake: Computers have lost their spark as a source of glitter in the technological world. This is why, overall, computer sales and technological advancement has been (relatively) flat for the past number of years. Computers are starting to be recognized for what they TRULY are – tools Ten years ago a computer was seen as the solution to many issues – now, it is a tool to help the user reach a solution, if it can. Linux will, for the foreseeable future, never supply that transparent solution that the average user is looking for. This is what has kept Microsoft on top.

Tomorrow: Comments (continued)

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