TECH TALK: Rethinking Enterprise Software: Whole Solution for USD 20 a month (Part 2)

There are three possible alternatives to bring down the cost of computers to USD 100-150, and thus target a mass market of users in the small and medium enterprises in emerging markets.

The first is to look at PDAs. The problem here is that we are changing what people are used to thinking of as a computer. A small screen and keyboard may look cute but it is not something that can be used for an entire day. For most employees, there is no need for mobility or portability in their computing device they are going to be working at their desk for the most part of the day.

An interesting comment by the CEO of Danger which has launched a platform for wireless devices offers a hint to the solution: When cell phones first came out, part of the reason they became so popular was because they were inexpensive and they worked the same way that your desk phone does. You have access to all the same content that you have for your desk phone. And there really hasn’t been a low-cost handheld device that offers that same kind of experience with what we’re used to on a desktop machine.

Replace cellphone by computer in what Dangers CEO says. The best way to provide the desktop experience is to provide a desktop itself. This brings us to the second possible solution.

We could try to create a new architecture for PCs from scratch to bring the bill of materials down to USD 100. The RD costs for this effort along with the time taken would be significant, even prohibitive. Even the most recent introduction of a computer by Wal-mart (from MicroTel, and running Lindows) is USD 299 (excluding monitor). There is no way I see how new (desktop) computers can be sold profitably at USD 100-150. The game of the future should be focused on software and marketing, rather than re-inventing the hardware. This brings us to the third solution.

We can look at providing second-hand computers to the masses in the enterprises. The developed world with its near-saturation adoption of computers is now disposing 3-4-year-old PCs by the millions. In fact, the US itself will see 45 million computers being disposed off in the next three years as corporates upgrade to newer desktops. In fact, in many countries the older PCs pose a recycling problem. These computers can be made available to the emerging markets. This is, according to me, the only way to get full-fledged PCs for USD 100. These PCs are targeted at a new set of users in the SMEs in emerging markets. For them, they offer the first taste of computing.

The computer has been the single most transformational invention of the past quarter century what we are doing now is making it available to the next set of 500 million users. This is the way to bridge the digital divide which exists between SMEs and the bigger companies, and between the emerging markets and the developed markets.

Whats different about these computers? The second-hand (used) computers should be stripped of the hard disk and CD-ROM drives. They need to be thought of as Thin Clients. What is different about them is the Software. They dont run MS-Windows on the desktop, but Linux. Think of them as Linux-based Thin Clients.

It is this third solution that meets Christensens two tests: of focusing on new markets, and disrupting competitors rather than customers. The new markets which are our target are the new users in the enterprises at the bottom of the pyramid. Customers are not being asked to change any habits they still get a desktop, albeit one that is a few years old.

Tomorrow: Whole Solution (continued)

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.