In most enterprises in emerging markets, software is either pirated, custom-created or just not used. The cost of packaged software is a key bottleneck in widespread adoption. Software is priced in the equivalent of US dollars, and that puts in out of the reach of most enterprises whose earnings are tied to the local currencies. The result has been widespread piracy of desktop applications and some server applications. For other needs, companies tend to write their own applications which can become difficult to maintain over time, or, simply use people and paper to do the work which software could have done more effectively. What can be done to make (legal) software more widespread among enterprises in emerging markets?
The analogy is there in what the Indian pharmaceutical industry has done in the past 10-15 years. It has brought down the price of many life-saving drugs through local processes for the mass market. The open Indian patent regime definitely helped. Now, these same pharma companies are going from being copycats to creating copyrights, from imitation to innovation.
What enterprises needs is “copycat” software to begin with for the various enterprise functions, but a dramatically lower price points. Just as hardware needs to follow the 30-30 rule (30% functionality at 30% the price), software needs to follow the 10-10 rule: 10 times the software, at 10% of the price (relative what is currently available).
Here are some ideas for software targeted at the world’s emerging markets:
Run off the LAN: Instead of trying to work on an ASP model, the software should be distributed through the Internet to run on servers on the LAN. The ASP model is good for countries where bandwidth is reliable and available. In most emerging markets, bandwidth is still very expensive and offers, at best, intermittent connectivity. By running the software off a LAN server, the performance bottlenecks are eliminated at the cost of an increase in complexity of data replication and synchronisation.
Think Near Real-Time: The price for perfection is very high. So, instead of thinking “real-time”, one should think of “Near Real-Time” solutions. Instead of getting the status as it is right now, one may get status which is a few hours or a day old. This is good enough for most enterprises, compared to the delays that they live with now. Eliminating the need for a real-time solution can reduce communications and systems costs dramatically.
Integration: Since most enterprises currently have only a handful of applications, it now becomes possible to think on an “integrated e-business suite”. This helps the enterprises bypass the need for expensive application integration, and more importantly, presents a single, consistent view of the data. It is possible to build integrated software applications since they are being crafted bottom-up, component by component.
Embrace Standards: This is an opportunity for emerging markets to lead the developed markets – by using standards for both software services (XML, SOAP, WSDL and UDDI), and for business processes (ebXML, RosettaNet, BizTalk). While some of these are still being created, organizations from the emerging markets should participate in the standards bodies and push for adoption across their industries. There is little legacy to worry about, and this can speed up deployment.
Leverage Open Source: Along with standards, Emerging Markets needs to embrace Open Source, wherever possible. A crucial piece (and thus, a good starting point) in the enterprise technology infrastructure puzzle is the desktop. Emerging markets should bypass the Microsoft platform in favour of Linux. (See an earlier Tech Talk on The Indianised Linux Desktop. The decision is justified by the sheer magnitude of the cost savings huge – about USD 400 per desktop. This is money which can be used to deploy additional computers across the enterprise.
Software today is the Oxygen for businesses. Taken together with innovations in hardware, it needs to imagined innovatively to make technology a utility for enterprises in emerging markets.