Month: February 2003

TECH TALK: The Rs 5,000 PC Ecosystem: 10 Ideas to Tap Invisible Markets (Part 2)

Continuing with the ideas outlined by Vijay Mahajan, Marcos V. Pratini De Moraes and Jerry Wind in their paper (Marketing Management, Winter 2000) on The Invisible Global Markets in the context of building our Rs 5,000 PC (5KPC) ecosystem:

6. Recognise that low income doesnt mean low quality expectations: When we talk of the 5KPC, we are not asking users to compromise in features, applications or performance. We are giving them a full-fledged computer with state-of-the-art performance and an easy-to-use GUI. In fact, in terms of convenience and the applications that are available, these users, much like their cellphone brethren in the emerging markets, have an opportunity to leapfrog existing users in the developed nations because of their lack of legacy.

7. Use demand pooling to reach critical mass: This is where the concept of telecentres comes in. Just like STD PCOs provide telecom access to a neighbourhood obviating the need for individual ownership, the telecentres can become the computing and communications centres to provide access to individuals and enterprises in the area. Cybercafes have done much the same in India so far by offering Internet access for as little as Rs 20 (40 cents) an hour. But what has been missed out is the access to computing and applications. The telecentres can become the instant business office for SMEs and allow them to test-drive applications before they decide to invest in computing on their own.

8. Bring your own infrastructure: Connectivity and bandwidth has been a bugbear for much of the worlds emerging markets. WiFi is the way to bring about the broadband communications revolution in these markets. As WiFi technology improves and its costs fall, they create the infrastructure to make possible the 5KPCs which can now be lit up in the presence of a network. This infrastructure leverages the newest developments in wireless technologies. Because it uses open spectrum and is built-out in a distributed manner (customer-owned networks), the costs are lower as compared to 3G networks.

9. Rethink the entire marketing and business strategy: Creative and innovative solutions will be needed to tap into these new markets. One example is to consider a rental business model, based on utility pricing. For example, the hardware, software and communications could be provided for as little as Rs 500 per month, creating a 3-year total cost of ownership of Rs 18,000, which should be enough to allow the entire value-chain to offer the services profitably. Another idea we have discussed earlier is the use of older computers and accessories, discarded by countries like US and Japan.

10. Bridge the digital divide: This is exactly what the 5KPC ecosystem, along with its concomitant ideas of the thick-server, open-source software and WiFi make possible. They make computing affordable, thus making it possible to take it to the technology have-nots, across the digital divide. The digital divide can be bridged by disruptive innovations. For example, we can think of building an SME Barter network cash is for them an incredibly valuable resource. College students can become the next big open-source developer community. The new markets and opportunities are only limited by our imagination.

With this background behind us, let us now look at each of the seven markets that we have mentioned schools, colleges, government, bank branches, SMEs, homes and telecentres. We will see how the 5KPC ecosystem can bring about dramatic changes in each of these areas in order to make the vision of a connected computer accessible to every employee and family a reality.

Tomorrow: Schools

Continue reading TECH TALK: The Rs 5,000 PC Ecosystem: 10 Ideas to Tap Invisible Markets (Part 2)

Space

Much of my childhood was spent being fascinated by Space. I remember writing essays and dreaming about “Space – the Final Frontier”. I would sit and listen to the space shuttle take-offs and landings live on radio in the 1980s. And, then as I grew up, Space took a back seat in my imagination. Today, Space is back in the news. Sadly.

The Columbia accident is reminiscent of the Challenger one 17 years ago. The images keep getting broadcast again and again on TV. These accidents have a unique way of focussing attention on mankind’s desire for explorations and the attendant risks. But, that should in no way stop us from the voyages of discovery. Space remains the next, the final frontier. As Dan Gillmor writes: “Space is humanity’s destiny, if it has one. We are an exploring, expansionist race. We must go on.”

The Global Job Shift

Outsourcing work to lower cost nations continues. Manufacturing to China, software services to India and now other business process-oriented jobs to countries. Business Week captures this trend in a recent cover story.

It’s globalization’s next wave–and one of the biggest trends reshaping the global economy. The first wave started two decades ago with the exodus of jobs making shoes, cheap electronics, and toys to developing countries. After that, simple service work, like processing credit-card receipts, and mind-numbing digital toil, like writing software code, began fleeing high-cost countries.

Now, all kinds of knowledge work can be done almost anywhere. “You will see an explosion of work going overseas,” says Forrester Research Inc. analyst John C. McCarthy. He goes so far as to predict at least 3.3 million white-collar jobs and $136 billion in wages will shift from the U.S. to low-cost countries by 2015. Europe is joining the trend, too. British banks like HSBC Securities Inc. (HBC ) have huge back offices in China and India; French companies are using call centers in Mauritius; and German multinationals from Siemens (SI ) to roller-bearings maker INA-Schaeffler are hiring in Russia, the Baltics, and Eastern Europe.

The driving forces are digitization, the Internet, and high-speed data networks that girdle the globe. These days, tasks such as drawing up detailed architectural blueprints, slicing and dicing a company’s financial disclosures, or designing a revolutionary microprocessor can easily be performed overseas.

From anecdotal evidence (speaking to friends), there is a clear shift apparent. A new formula: 1 person in the US = 3 in India. The outsourcing has been hastened by the slowdown in much of the developed world, as companies seek to wring out all the costs they can.

Power over Ethernet

Rafe Needleman writes about an interesting idea:

A few companies, like PowerDsine, make components that allow power to be sent over Ethernet data cables. Applications include wireless access points, Web security cameras, and Internet phones — devices for which putting in a power line can add greatly to the cost and hassle of installation.

The PowerDsine specification calls for 48 volts of direct current (DC) at about 13 watts, which falls below the Underwriters Laboratories safety cutoff and therefore doesn’t require you to call in an electrician to string network cables. Also, the power isn’t actually sent down the wire until the device signals that it can accept it.

This is not, however, a revolutionary concept. On the world’s first network cables — telegraph wires — power and data were one and the same. For a century this was also true for telephone lines. Ethernet and serial cables were designed without a power component, because when the standards were being written, the computing devices that were to be connected required more juice than the cables could safely carry.

The whole idea behind PowerDsine highlights the anachronistic nature of electrical power today. While it’s easier to work with high-voltage alternating current when you’re transmitting energy over long distances, most modern electronic devices use direct current at low voltages, and most of the AC-to-DC power converters for these devices are very inefficient, not to mention a pain in the neck. But with the power demands of new computing products dropping (especially for network equipment and peripherals), it makes sense again to consider running the power through the data wires. In fact, when it comes to modern cabling specifications — specifically USB and FireWire — the data cables do carry power.

On a slightly different note, a friend, Prakash Vaidya, made the suggestion that computer departments need provide a 48 V supply for equipment, just like they do in telco central offices. I think such an idea would make sense for emerging markets, where getting reliable supply at 230 V is a big challenge.