This year in India, about 2 million computers will be sold. My estimate is that enterprises will buy about two-thirds of these. The aggregate installed base of computers in India is about 6-7 million. This is a tiny figure for a country which wants to play an important role in the world’s IT future. The cost of both hardware and software are inhibitors in the growth of computing in India. Unfortunately, India has little control on prices in both segments. The real losers in this are Indian enterprises for whom the cost of technology limits its adoption.
At the same time, the Internet is driving connectedness to new levels. Companies are realizing that the Internet can be a crucial ally in the elusive search for greater efficiencies. The thrust is not as much on revolutionary new business models but on seeing how the Internet can enhance existing ways of doing business.
The basic premise of the Internet is its ability to inexpensively connect customers, suppliers and employees, and enable collaboration. By automating processes, companies can reduce costs and make customers happier. But to make the Internet truly effective, it is necessary for access to computers to be available to more people within the enterprise.
Falling communication costs combined with the need to cut overhead costs and pressure to focus only in those areas where value addition is maximised is going to increase outsourcing, especially to lower-cost countries like India. Companies in India and the rest of Asia are thus no longer working in isolation. They are becoming part of supply chains.
While in other Asian countries the focus has been on outsourcing manufacturing to companies in the region, in India, the emerging focus area is on outsourcing services (software, support and other back-office functions). In both cases, the common thread is for companies to be connected to each other and to partners internationally.
For Indian enterprises, adopting technology and permeating it across the enterprise is going to become increasingly critical. Information is going to be an important aspect of business. Today, information – and hence decision-making – is highly concentrated in the hands of a few. But the spread of computing and communications can help diffuse this to the people on the front-line, who may better-placed to make decisions in fast-changing environments.
Even as the twin drivers of the Mobile Internet and Web Services promise to create a ubiquitous, utility-like and a much more business-oriented Internet II, the key question that needs to be addressed is: how can the penetration of technology in enterprises in countries like India be increased?
One possible answer lies in looking at two consumer devices which have achieved huge penetration in the past few years.
