Category: Bus. Std. (ICE World) Column

My latest column in Business Standard:

375 million. That is the number of Indians in the 6-19 age group. As they grow up and enter the workforce, they are bound together by one need education. And by all accounts, they arent getting enough of it. In an article, Business Week (Jan 31, 2005) called India a nation of dropouts. The facts bear out the stark reality. While 96% of India’s children enroll in primary school, by the age of 10 about 40% have dropped out, says the education department. Just over a third of high school students graduate.

Educating Indias young is a problem that needs immediate attention. Every year, we are closing the window to a better life for tens of millions of Indians. At the same time, it is not an easy problem to solve. India has a million schools. Most of them are in rural areas and government-run. Teachers and teaching leave much to be desired across most of them. Unless we come up with innovative, radical solutions quickly, we will be squandering Indias greatest asset.

If India has to continue and build upon its recent growth success, an educated workforce is critical. Business Week put it: Without a much deeper reservoir of educated youth, India may see its gains in software and manufacturing evaporate.

Across the space, India will need an educated and trained youth. We are not talking a few million here. 25 million new Indians are ready to join the schooling system every year. The magnitude of Indias education challenge is huge. We are past the point where conventional solutions can work. What we need is out-of-the-box thinking which can educate Indias millions with speed, quality and at affordable price points. This is where technology can play a role.

The challenge of education can be split into two components: teaching (and learning), and testing. Teaching itself has two elements: content creation (typically the preparatory work done by a teacher, aided by textbooks), and then its communication to students in a classroom environment. So, the education value chain can be thought of as comprising three elements: content creation (and/or aggregation), distribution (or communication), and testing. Let us consider each of these elements independently, starting with the content.

Writing on his blog at Deeshaa.org, my colleague, Atanu Dey, advocates a shift from the teacher-centric model to a learning-centric model. The learning-centric model recognizes these two basic truths: that the universe is connected, and that every student is unique. The model makes available to the student a very rich, deep, and connected set of content which the student navigates through a process which can only be called discovery. Although the basic material is accessible to students is common, the path that a specific student takes is unique to the student. Conceptually, the content is a fully-connected network which can be traversed in a potentially infinite set of ways. One can start from any one of a very large set of nodes, and then move from one node to another till entire structure has been visited.

For all of us, our memories of school and college have a special place for that extraordinary teacher who made a complex subject simple and a joy to learn. If we think deeply about it, what that special teacher taught was not merely the subject but more importantly how to learn. In a dynamic world of rapid change, the most important thing is to learn how to learn. This is what we have to do with the content that needs to created and aggregated.

The Web has a vast array of incredibly good content which can make learning a delight. But this content needs to be identified from among the average and even poor quality stuff that is out there. In addition, there are amazing teachers who can simplify even the most difficult of concepts. We should be able to make videos of their teaching so their power and reach is multiplied many times over.

So, the underlying principle for content creation and aggregation is of identifying the best and re-using it across the spectrum of schools. This will not be a cheap process, but considering the fact that the cost can be amortised over tens of millions of students each year for the foreseeable future, it will be a very small cost per student.

The next challenge is content distribution. This is where we can look at multiple approaches. The interactive content can be made available on computers at the school for local access, without the need to rely on real-time connectivity. Teaching videos can be broadcast (or narrowcast) over television via cable, satellite or the Internet. In fact, broadband can make possible IP-TV, which can then enable the distribution of content on-demand from central servers to schools. The quality content created can also be distributed over other media printed and electronic.

Testing is the third leg of the education system. Through the education process, it provides feedback to students, teachers, parents and administrators about the areas that need improvement. As part of a certification process, it provides a quality of assurance to prospective employers at the end of the value chain. As such, instruction needs to be separated from testing to prevent conflict of interest.

Education is the best investment we can make in building our tomorrow. As Atanu puts it: Education is the lynchpin which holds the entire economic machinery together. It is so fundamental and basic that without an educated population, there is no conceivable way for an economy to prosper. Show me any economy that has ever done well, and I will show you that at its foundation is an educated population. I grant you that for short periods of time due to special circumstances, an economy may flourish without an educated workforce, such as an economy buoyed by a natural resource such as oil. But it is a hollow sort of an economy and cannot survive in the long run.

It is not just money that is needed. A mix of disruptive thinking and new technologies are needed to deliver quality education to an increasingly aspirational India. This must be our promise and commitment to Generation Next.

PS: This is likely to be my last column for ICE World, since the section is undergoing a redesign.

My latest column in Business Standard:

I attended CommunicAsia in Singapore in mid-June. There was an excellent conference and a huge exhibition area. The focus of the conference was around the twin themes of mobility and broadband. What follows are some of my impressions about the emerging communications landscape and the implications for India.

The conference sessions were focused around the telecom scenario in Asia. They provided a fascinating glimpse of the region with different countries at different stages in the evolution of their communications and services infrastructure. The leaders are undoubtedly Japan and South Korea, while the two biggest opportunities are China and India. Taiwan and Singapore are racing ahead to deploy broadband, 3G and wireless LANs. Hong Kong has the best IP-TV service. An interesting fact: last year, nearly a million new mobile users were added every day. The world now has 1.8 billion mobile users.

Two words that were heard a lot at the conference were convergence and ecosystem. Convergence is finally becoming a reality as the next-generation networks with all-IP cores are making it possible to have triple play services (voice, data and video) flow over the same network. Convergence is also happening in terms of the fixed line and wireless worlds in both the networks and handsets. Convergence technology drivers include SIP (Session Initiation Protocol) and IMS (IP Multimedia System). There will be a time soon when our handsets will support WiFi and GSM/CDMA, such that in hotspots they would use WiFi to make and receive calls, while at other locations they would use the cellular networks.

Ecosystem is about the realization that there is no single company which has all the answers, and there is a web of relationships to deliver valuable services to consumers and enterprises. Operators control the networks (and the customer relationships), but they need a combination of cheaper access devices and compelling services to drive traffic and revenues. An ecosystem approach is about creating win-win scenarios for the entire value chain.

The three panel discussions identified the hot issues: content, 3G and VoIP. The biggest success stories in mobile value added services have been unexpected SMS, ringtones and increasingly, ringback tones. But there are still plenty of opportunities in the content space to deliver useful services to consumers on their always-on, always-available, always-connected, personal devices, and over broadband networks. Operators have begun 3G rollouts across the region but there is no clear business plan on how money will be made! WiMax looms as a possible threat or opportunity. VoIP is hot and happening it is clear that voice will just be another application on the IP network.

The vision for the future is simple, seamless and personal communications from wireline and wireless networks. Tomorrows world will be one where users will be able to communicate anytime, anywhere from the device of their choice. Users will be able to define their own experiences, and the network will become more intelligent to bring highly personalised services to users. All of this will bring about a significant lifestyle change for consumers and also enable the real-time enterprise.

The dream of this world of seamless mobility has been there for many years. But the work that has been happening in the background is now making it all possible. Parallel trends in digitisation are making a huge array of content available to us on any of the screens TV, PC or the mobile. The focal point is now shifting from the network to the user. What people really want is to be connected, informed, entertained and do so in their own way. Whether one is at home or work, commuting or in public places, the networks will connect us to friends, family, colleagues at work, and our business information.

As Peter Vesterbacka, founder of HP Mobile E-Services Bazaar, puts it: All people are mobile, even when they work. They have needs all the time, either private or professional. They need access to services and information all the time, wherever they are. The devices they will use to access these services can be wired or wireless the people are mobileMobility is a natural state of being, not a niche market. The Internet is a subset of the mobile market.

For us in India, we have a very good mobile infrastructure. What is needed is for the operators to alter their mindsets and open up their walled gardens to third-party content and applications developers much like the way NTT Docomo did with i-mode in Japan when they launched in 1999. More than voice and person-to-person SMS, future growth will come from an array of lifestyle and business services and for that the need is to build an ecosystem.

The broadband situation in India is nothing short of a disaster. Whereas countries like South Korea, Japan and Hong Kong talk of multi-megabit connectivity, we are stuck in the kilobit world. India needs cheap, reliable, high-speed, ubiquitous broadband access for homes and businesses. (Anyone who thinks 256 Kbps at Rs 350 per month with download caps is broadband should visit to one of our Asian counterparts.)

This will spur our content and software developers to innovate and build services for the domestic market and potentially extend them to others globally. South Korea did that very well and the result is not just companies like LG and Samsung, but also online gaming innovators like NCSoft. India has the creative talents in both story-telling (Bollywood) and software. The combination is what can help build out the next-generation killer services.

The scale of Indias developmental challenge needs big, bold decisions. Technology can play a small but critical part in this process. State-of-the-art mobile and broadband networks can help India address the challenges of education, health and governance. Removing obstacles to their buildout should be a national priority.

My latest column in Business Standard:

May saw plenty of action on the gaming console front with announcements by Sony, Microsoft and Nintendo about their new products due for launch in the coming months. Chinese online gaming leader Shanda also disclosed plans for its interactive entertainment box. The net result: video gaming is set to go mainstream, and the broader battle for control of the living room is well underway.

An article in the Wall Street Journal summarised the key selling points of each of the three new game consoles: Sony PlayStation 3: Ultrafast, powerful chips for movie-quality graphics and complex videogame environments. Will also be able to stream and download music and movies. Microsoft Xbox 360: Aims to be a hub for all kinds of digital media — movies, music and online content as well as games. Nintendo Revolution: Emphasis on innovative, networked game play and simpler, cheaper game development rather than power and graphics.

Another story in the Wall Street Journal captured the importance of the new generation of consoles: While the PlayStation 3 is seen as more powerful than the Xbox 360, both will have the speed to render complicated computer environments and permit complex game play, game company executives and experts said. As developers become familiar with the new machines, video games should make a dramatic transformation. You’re going to see a much bigger emphasis on physics giving games a much more responsive and interactive world, says Peter Hirschmann, vice president of product development at LucasArts. It’s about creating an authentic kind of world. The last transition to new consoles, about five years ago, brought the gaming world three-dimensional graphics. Experts say photo realism might be the best term to describe the change this time. But it is about more than just advanced graphics, says David Zucker, chief executive of Midway Games Inc. To me, it’s really about artificial intelligence creating environments that react the way they would in real life.

Over the years, the power available on the consoles and the ambitions of the console makers has grown dramatically. Both Sony and Microsoft look at their products as the entry point into the living room with hopes of becoming the multimedia hub and gateway for all entertainment delivery, creating significantly large revenue opportunities.

TIME magazine wrote in a cover story (May 23, 2005) about the Xbox: D.E.L digital entertainment lifestyle is shorthand for the notion that all media movies, music, games, cameras, phones, TVs are becoming digital media, and thats changing how we relate to them and how they relate to one another. Theyre merging into a single integrated, portable, customizable media gestaltAs music and movies become more and more digital, the entertainment business is transforming into a software business, and somebody has to build a master platform on which all the software runs, and the hardware through which it flows. In short, the Xbox 360 is Microsofts Trojan horse to get into peoples homes and be the hub for the emerging digital ecosystem.

This is also what Shanda in China hopes to capitalise on to become an interactive Disney. Forbes wrote recently in a cover story (May 23, 2005): Only 94 million of China’s 1.3 billion people were Internet users at the end of last year, but 330 million have TV sets. A huge chunk of Shanda users are nomads, logging in from Internet cafes.Later this year [Shanda] will unveil a new interactive entertainment box, dubbed the Shanda Station, that will allow TV viewers to go online, play Shanda’s games and buy music and, eventually, films. Developed in part with Intel, the product uses Microsoft software and connects to the Internet over high-speed DSLphone lines. Shanda is considering putting voice and video calling features inside the Shanda Station, which will be sold through electronics chain stores, plus Shanda’s own sales channelsA home audience will also give Shanda a better claim on China’s torrid advertising market.

The video games we are familiar with in India are the ones we play in entertainment arcades or on PCs. Game consoles have traditionally been absent from the Indian market for a simple reason: console companies lose money with every console they sell, and make money as the consumers buy the games. In piracy-ridden markets, the opportunity to sell games disappears leaving only losses from console sales.

Broadband and mobiles offer new models for gaming. Broadband makes possible online gaming, where players can buy pre-paid gaming cards and connect to servers on the Internet to play either by themselves or against others. (There are also many free Internet game sites.) Mobile gaming is also growing rapidly and has emerged as one of the sweet spots for operators and gaming companies for generating additional revenues. Coming soon: networked mobile gaming, where mobile phone users can play against each other.

With a youthful population, gaming has the potential to be a killer app for broadband in India. The low installed base of PCs and the non-availability of consoles in India creates an opportunity for an IP set-top-box, which provides not just a gateway to gaming, but also computing (and Internet access), telecom and television the triple play that the consumer electronics has been talking about for some time. The set-top-box should be able to connect to both a TV and a computer monitor. Such a box will probably need to sell for about Rs 5,000 ($110) and should leverage the Internet for offloading computing and storage. Services would be offered on a subscription basis to home users.

The game is afoot! Are we ready to hunt?

My latest column in Business Standard:

What are blogs and why are they becoming hot now? Why should you consider reading blogs or even doing your own? [This story is organised as a blog. So start reading the last entry first because blogs are published in reverse chronological fashion, with the newest entries at the top.]

Friday, May 13: Here are some blogging tips.

Blog daily. A good starting point is the BlogStreet list of the top 100 Indian blogs at http://india.blogstreet.com/top100.html. Blogging has to become part of the day’s routine. Things have to become habits – for both readers and writers.

Read widely. One may not understand everything, but over time, one gets the lay of the land. Maps start forming. Stories acquire a context. And over time, the linkages between developments start becoming apparent.

Think aloud. The one thing I decided when I started blogging is that I would write what I thought.

Start. Even when I feel I may not something to say, sitting in front of the computer changes everything. The words just come.

Thursday, May 12: How do you start blogging?

To get started, you can use any of the free blogging platforms available via Google (Blogger.com), Rediff, Sify or IndiaTimes. Once you are sure you want to do it, you could try a more advanced blogging platforms like TypePad (costs $5-15 per month). If you have your own server to host the blogging software, you could use WordPress (open-source) or MovableType (free for non-commercial use).

An RSS Aggregator would be a good tool to complement the blogging platform. It offers an alternative to going to various blogs. Instead, it aggregates the output of various blogs (keeping track of when the blogs are updated) and shows you all the fresh items in a browser or a special client. Bloglines and Rojo are web-based aggregators. NewsGator is an Outlook-based aggregator.

There are plenty of services becoming available for bloggers and readers. Our Blogstreet ranks top blogs along with their neighbours (other related blogs), and has a set of useful RSS utilities. Three other RSS-based search and notification services that you may find useful are Feedster, Technorati and PubSub.

Wednesday, May 11: Why blog?

Let me talk about my experience. Recently, I completed three years of blogging at http://www.emergic.org, which mainly discusses emerging technologies, enterprises and markets (though I do have the occasional personal post). I take items that I think are interesting, abstract a part of the text from the original story and link to it from the blog. This has a dual purpose: it helps me find interesting items easily later, and I serve as a human filter (or aggregator) for a small part of the content web. At times, I will add a small commentary to the post, adding my unique perspective on what Ive read.

For me, the blog has become an ideas refinery. I learn a lot from reading what others write. Much like the open-source software community shares and gives back, the blog is my way of contributing back into the ideas community in my own small way by not just taking the time (a precious resource for all of us) to link and write, but also by discussing the ideas that I am thinking about. The blog is a mirror of my mind. The comments I receive from many of the readers (and other bloggers) helps in real-time refining and getting the best out from a community smarter than any single individual.

One of the by-products of blogging has been the new friends that Ive made and people Ive met. The blog is a non-linear way to make connections we can only meet so many people you can meet in person, but via the blog we can build an exponentially increasing network. For me, the blog and its readers are the social network.

Tuesday, May 10: What are blogs?

Blogs (also called web logs) are journals, personal diaries. They have postings at varying intervals, usually by a single individual, in the form of text, images, and other data forms, arranged in reverse chronological order and accessible with a Web browser.

In the early days of the Internet, setting up individual home pages was seen as a big deal. But these pages were hard to update once created. Blogs are all about updates. Publishing for individuals on the web has become easy and one of the by-products of that is the emergence of millions of personal pages talking about everything from what their authors did during the day or running commentaries on specialised topics. Blogs are the opposite of mainstream media. If media as we know it is about a few publishing for many, blogs are about many publishing for few.

Monday, May 9: Blogs are hot.

Business Week had this to say in its cover story entitled Blogs will change your Business in the May 2 issue: [Blogs] represent power. Look at it this way: In the age of mass media, publications like ours print the news. Sources try to get quoted, but the decision is ours. Ditto with letters to the editor. Now instead of just speaking through us, they can blog. And if they master the ins and outs of this new art — like how to get other bloggers to link to them — they reach a huge audience. This is just the beginning. Many of the same folks who developed blogs are busy adding features so that bloggers can start up music and video channels and team up on editorial projects. The divide between the publishers and the public is collapsing. This turns mass media upside down. It creates media of the masses.

My latest column in Business Standard:

Application Service Providers (ASPs) are set to make a comeback in an avatar that is also being termed on-demand software or software-as-a-service (SaaS). Business Week wrote recently: Companies like Salesforce.com, NetSuite, and newly public RightNow Technologies are reinventing the way customers buy software. They’re all making basic corporate software to manage finances or a sales team, run a business or run a call center — not new stuff, and in many cases, with fewer features than existing products. But the innovation is in the business model. These companies deliver software over the Internet – a Web service, if you will — and companies pay as they go with monthly fees. That means less costly integration, no hiring an in-house administrator, and no big up-front contracts. It’s a considerably cheaper and easier approach that gives these software-as-a-service companies an entre into the last wide-open sector of software customers: Small and midsize companies.

KB Chandrasekhar of Jamcracker wrote recently on ASPNews.com about what is different this time around: Today, with improved on-demand delivery and management solutions, software providers have gained significant efficiencies-of-scale in delivering SaaS, which in turn helps make for some very attractive price points. On the demand side, companies have faced severe economic challenges over the last five years, forcing CIOs to do more with less, and to focus on bringing more discernable value to their companies.

SMEEMs ((small- and medium-sized enterprises in emerging markets) are the last frontier for technology companies. They have only used IT sparingly so far. They are also the engines of growth for their countries. As emerging markets develop, these enterprises will grow and need to leverage IT and best practices to ensure they are not the weak links in the real-time value chains of the large enterprises. Technology companies seeking growth will do well to look at SMEEMs and use the service model to deliver software to these enterprises.

The opportunity for both SMEEMs and the ASPs is thus significant. This is because of the lack of legacy infrastructure enterprises have simply not invested adequately in IT over the past decade because of issues like affordability (dollar-denominated pricing), desirability (lack of relevant applications) and manageability (not enough skills to manage technology). Now, with the ASP model, all of this can change. As businesses realise that they have to automate for growth, software vendors have an opportunity to fulfill this market need. A number of factors will enable this shift.

First, there is a growing recognition in the IT companies that the next untapped frontier for growth is in the emerging markets. As these countries develop and build their physical infrastructure, the digital infrastructure and information pipelines also need to be put in place. This is where time needs to be compressed and scale needs to achieved rapidly. Making business process portals which cater to the next enterprises is the fastest way to reach out in an environment where the alternate distribution channels are not fully formed.

Second, the growing availability of reliable and affordable broadband connections in emerging markets means that the Internet is now becoming an extension of the local network. People have become comfortable with using the Internet in their lives as consumers. Even in India, broadband connectivity is becoming available across the country through the phone companies and cable operators.

Third, the dramatic growth in mobile phones has shown people the value of instant and always-available connectivity. Mobiles have hastened the pace of business people can call or SMS each other. In many ways, mobiles are becoming the computers of the East. But the mobiles have limitations and need to be complemented by desktop computers along with applications and services. The need for multi-device access will drive the shift from desktop-based and LAN-based computing to centralised computing platforms.

Fourth, in the avatar as consumers, people have already started trusting their data to centralised services. Email service providers like Yahoo and Microsofts Hotmail are used by hundreds of millions of users. Various ecommerce providers have our credit card information. ASPs like Salesforce.com have also demonstrated that even businesses are willing to host sensitive customer data on central servers outside the firewall.

Finally, there are a number of technologies like web services and Ajax (Asynchronous Javascript and XML, also called remote scripting) which can serve as the foundation to create applications that are modular and integrated at the backend, and have rich user interface not traditionally associated with web-based programs. These may be old technologies, but they are being applied in new and innovative ways by companies who dont have a legacy to protect and sustain.

By providing the right set of integrated, hosted solutions with a utility-like pricing model, the ASPs can provide three clear benefits to SMEEMs. First, since software is delivered over the Web, there is no need for anything more than a computer connected to the Internet within the enterprise complemented by the mobile phone. Second, a wide variety of integrated applications can ensure that multiple functions can be automated rapidly. This addresses the desirability issue. Third, monthly payment options allows the SMEEMs to link payments to business outcomes, thus addressing not just the affordability issue but also the ability to measure return on investment (RoI). As Ray Lane puts it in an article on Sandhill.com: I define software as a service as tying supplier revenue to a business outcome: the supplier sees the clients end result, measures its success, and receives revenue based on the results achieved.

For the business, the key benefits are: there is no need to invest in any IT infrastructure, payments are made monthly and can be tied to business outcomes, and it is possible to get an integrated solution which automates key business processes. Software companies who so far have only limited success in selling software to businesses – need to learn from the Chinese gaming companies: shift to an online model to eliminate piracy and increase reach. Going the ASP route is going to be the only option for ISVs seeking to build a large and profitable business.

I believe that from the perspective of emerging markets, the ASP model of software-as-a-service is a disruptive innovation. The competition, for the most part, is non-consumption, as SMEEMs use only limited software for their business. ASPs can change that. The Age of ASPs and software-as-a-service is upon us.

My latest column in Business Standard:

About 5-6 years ago, Application Service Providers (ASPs) were one of the hottest categories in software. They would transform the way software would be delivered, and create a win-win situation for customers and software vendors. That dream did not pan out. ASPs were lumped in the basket of Internet failures along with online pet food stores and b2b exchanges.

Unlike the others, though, ASPs are now making a comeback and for good reasons. I believe that the ASP business is where Search was in 1999 when Google strode on the scene ripe for new entrants to come in and change the rules of the game. But first, let us take a walk down memory lane to understand the promise of ASPs and then analyse what went wrong in the first wave.

ASPs offer applications over the Internet using their own servers to customers, who pay a regular fee for the use. For companies, there is no need to own either the application or the underlying infrastructure. For service providers, it helps them aggregate a large number of customers providing economies of scale. Using the Internet as the distribution medium, ASPs can reach out to customer globally.

Wikipedia outlines the advantages: software integration issues are eliminated from the client site; software costs for the application are spread over a number of clients; and, vendors can build more application experience than the in-house staff. It also mentions the disadvantages: the client must generally accept the application as provided since ASPs can only afford a customised solution for the largest clients; the client may rely on the provider to provide a critical business function, thus limiting their ability to handle that function to that of the provider; continuing consolidation of ASP providers may cause changes in the type or level of service available.

ASPs promised a world where software would be delivered over the Internet, customers would have to pay a monthly service charge rather than a large upfront payment, and vendors would have great scale in offering the services to business globally much like Yahoo, Google and MSN have done for consumers in every country of the world.

On paper, the ASP idea looked like a great win-win for everyone. So, what went wrong?

An October 2002 article in Baseline summarised what went wrong with the business model of Application Service Providers (ASPs): The idea was that the customers, then primarily dot-coms, would be freed of purchasing and maintaining software and could use their dollars elsewhere, perhaps to bolster their marketing budgets and build their brands. And the rent would provide ASPs with a steady source of incomeBut two things went wrong. First, there were few companies that thought renting was a good idea. Most wanted to own an asset as important as software, and they were not about to turn over anything that controls their critical business processes to an outsider. Second, the Internet stock-market crash wiped out most of the customers.

John Hagels book Out of the Box (published in 2002) has an extensive discussion on ASPs, what the early companies did wrong, and how it can be done right. He writes: ASPs in many respects presented a false start in the efforts to break out of the enterprise straitjacket. In particular, few of them adopted Web services architectures as their technology platform. Instead, they attempted to build businesses on the Internet using traditional technology architectures. This proved a significant flaw in the early ASP model.

Hagel then discusses the reality of the first wave of ASPs:

Product Complexity and Lack of Flexibility: Traditional enterprise applications were designed to meet the complex needs of a large enterprise. Small- and medium-sized enterprises rarely needed the full complex functionality embedded in these applications. As a result, the applications proved unwieldy in smaller enterprises they were slower and more complicated than necessary. [Also,] applications designed using conventional technology architectures presented major challenges when businesses tried to customize them or connect them with their existing applications.

Product Performance Concerns: Within the firewall, CIOs had much better control over performance. Outside the firewall, they worried about both technical and corporate performance.

Vendor Performance Concerns: ASPs were new start-ups, with a very limited track record. CIOs found that ASPs had very limited operating history to provide reassurance that their management processes had been tested successfully in high-volume, mission-critical environments.

Challenging Vendor Economics: Customer concerns about ASP performance and the lack of compelling product benefits contributed to much higher customer acquisition costs than anticipated. Sales cycles were also longer than anticipated. [As a result,] ASPs found themselves caught in a potentially life-threatening economic bind.

Hagels key point: The Internet is not simply a new distribution channel. It often requires a fundamentally new set of products and technologies if a business is to exploit its full potentialWeb services architectures are the key to unlocking the full business potential of the Internet.

That is the starting point for rethinking ASPs. But theres a lot more to ASPs than web services. We also need to rethink the markets they address. As I will explain in the next column, the big opportunity for ASPs is the long tail of enterprises in the worlds developing countries what I call the SMEEMs (small- and medium-sized enterprises in emerging markets). They have been largely unaffected by the Internet other than email usage and in some cases, a minor web presence. The software they use for their business remains almost identical to what they used five or more years ago. [In India, this is limited to mostly pirated copies of Microsofts Windows and Office, and Tally for accounting.] They are the weak links in the information value chain and the next big opportunity for software vendors.

My latest column in Business Standard:

George Gilder, a technology evangelist and author of the book Telecosm: The World After Bandwidth Abundance, coined the word teleputer many years ago. He thinks of it as a handheld device that’s a fully functioning personal computer, digital video camera, telephone, MP3 player and video player…Epitomized by the multipurpose cell phone handset or personal digital assistant, the teleputer is optimized for ubiquitous connectivity…[It] will be as portable as a watch and as personal as your wallet. It takes pictures or videos and projects them onto a wall or screen or onto your retina and transmits them to any other digital device or storage facility.

While the complete functionality of the teleputer as described by Gilder is still some time away, there is little doubt about the direction we are headed in. This is very important from the point of view of users in the emerging markets. For many, it is the mobile phone, rather than the computer, which will provide the first glimpse of the Internet and Web.

This is what Jonathan Schwartz of Sun said after his visit to 3GSM: The majority of the world will first experience the internet through their mobile phones. We sometimes forget that 10 times as many people bought handsets last year as PC’s. Round numbers, there were a BILLION wireless devices sold last year, and around 100 million PC’s. To that end, the odds are much higher you’ll watch broadcast broadband content on your phone than on your PC – and now that Nokia (and their peers) are the world’s largest camera manufacturers (just think about that for a moment), the odds are far higher you’ll even create broadband content on your handset…Another interesting meeting was with the CEO of Oberthur, who predicts we’ll see 1 GigaBYTE SIM cards by years end – that’s right, a Gig on an interchangeable SIM card. For extra credit, what happens when a significant portion of that memory is executable? That’s a mighty small computer.

Mobile Phones are also being hailed as the key for development. The Economist wrote recently (March 10 issue): Plenty of evidence suggests that the mobile phone is the technology with the greatest impact on development. A new paper finds that mobile phones raise long-term growth rates, that their impact is twice as big in developing nations as in developed ones, and that an extra ten phones per 100 people in a typical developing country increases GDP growth by 0.6 percentage pointsAnd when it comes to mobile phones, there is no need for intervention or funding from the UN: even the world’s poorest people are already rushing to embrace mobile phones, because their economic benefits are so apparent. Mobile phones do not rely on a permanent electricity supply and can be used by people who cannot read or write.

The Economist has got one-third of the story right. There are two more points to be considered:

Multimedia-enabled thin clients: Think of them as phones with bigger input/output capabilities and options to connect multiple peripherals. These thin clients will have the same internal specs as the phones.

Grid Services: There is a need for centralised applications and data storage. Because of the wireless connection, a cellphone can connect to the network. All the heavyweight lifting is done on servers.

Thin clients and mobile phones will complement each other what is needed between them is seamless mobility. This is where the “virtual desktop” comes in — one can start reading a book on a mobile phone, and continue reading it on ones thin client, and then perhaps back on the phone. All of this is possible if the state (what the user is doing) is stored on the server.

This is how commPuting (communications and computing) in emerging markets will look like in the future. Both the multimedia-enabled thin clients and tomorrows mobile phones are examples of teleputers. They have the potential to transform life and work. This is a world where each of us will have a personal device and networks will be ubiquitous. Bringing this world to life is where the next set of opportunities lie.

What is inside todays desktop computer will move to the server and what is inside a cell phone will power tomorrows network computer. The networks will be IP-based. Voice will become yet another service over these digital networks. The mobile phone will be our constant companion, and will be complemented by the availability of network computers with large screens.

Services will occupy centre-stage. From commPuting to computainment to communicontent, it will be a world that will converge at the back-end (server-side) but will diverge at the front-end (multiple devices). While there will be no convergence across these screens, the convergence will happen at the back-end with respect to the data store. We will have different views to the same set of data across these devices along with seamless mobility. Welcome to the age of teleputers and service-based computing.

My latest column in Business Standard:

The innovation and growth on the mobile phones front is astonishing. The top-end phones available now have the processing power and storage available in desktop computers from just 4-5 years ago. Little wonder then that 2004 saw 674 million phones being bought, and estimates for 2005 stand at 730 million.

The mobile phone is rapidly becoming the uber-device the one device that seems to have it all and becomes even more indispensable than it is now. Mobile phones have already started functioning as more than just communications devices. Mobiles serve as watches and alarm clocks. Even with the limited free games that come with basic phones, they are already good for time-pass. They can also function as calculators.

In unfamiliar neighbourhoods, they tell us where we are. The address book and contacts list on phones is our social interface. Without the phone, many of us would be quite lost in connecting with other people! The calendar function on the mobile phones can help us track our lives. Phones can also function as radios. For some, the mobile phone also becomes a notepad send an SMS to oneself and make it a reminder service. Owners also have tended to customise phones with their own ringtones, themes and wallpapers.

This is just for starters. Consider what some of the more advanced mobile phones are also doing:

Digital Camera: Point-and-click! Phones capture pictures and let us save them for posterity or transfer them to others and computers.

Audio Recorder: Mobile phones can be used to record conversations, or even brief notes to oneself.

Video Recorder: Phones are becoming video cameras also some of the newest cellphones can record an hour or more of video.

Multimedia Messaging: Everything recorded can be shared with others by using MMS.

Email Client: The phone can be used to connect to any POP or IMAP server and allow receiving and sending email. While most phones may not have the ease-of-use that a Blackberry has with email, contacts and calendar, the fact that it is on the phone itself and there is no need for a separate device can be a big help (along with the lower total cost of ownership).

Web Client: Phones can also browse websites via a WAP and/or HTML browser. Most websites may not look great on the small screen, but it is still possible to connect to any website.

Gaming Platform: Mobile games have become big business in the past couple years, as people seek entertainment in the free time that they have on the device that they always carry with them.

Documents Viewer: It is increasingly possible to view documents on the cellphone in the popular MS-Office file formats.

Computer Adjunct: For many, the cellphone has replaced the PDA as the complement to the computer. With a remote desktop application, it also becomes possible to make the mobile phone a window to ones computer.

Music Player: The next big thing in 2005 is reckoned to be the combining of music capabilities on the mobile phone. While phones can play MP3s, it will soon also be possible to have music streamed from the Internet. Motorola is expected to introduce a phone this year that marries the mobile with Apples iPod.

TV: In India, some operators have been promoting many TV channels on the cellphone over next-generation networks like EDGE.

Wallet: The phone can also be used to pay for purchases like a credit or debit card. There is already a billing relationship that exists between the subscriber and the operator, and that can be used to make payments to merchants.

Bar-code readers: Phones will also be able to read barcodes and that can have very interesting applications in commerce.

Ramesh Jain, professor at University of California, Irivine, wrote on his weblog: Mobile phones are becoming very powerful and are likely to become a dominant device for CCC (communication, computing and content).

So, the phones of tomorrow will be remote controls for our life. They will come with bigger, better keyboards and displays even though there are practical limitations on how big a device we will carry. Networks are becoming faster, too. And the device that was once a replacement for the fixed-line phone will occupy an even greater role in our lives. Countries like Japan and South Korea already lead the way in having multi-purpose mobile phones. China is following and India is not far behind.

Consider some of the recent announcements at Cebit.

A Slashdot reader wrote: Samsung [is] showing off a new cell phone which runs on Microsoft’s Windows Mobile operating system which features a built-in hard drive. The SGH-I300 will offer 3GB of storage which allows you to store up to 1,000 songs on it for playback through the music player. The 3GB hard drive is similar to the type of hard drive that is found in Apple’s Mini iPod. These 1-inch drives with very low power requirements, are ideal for cell phones and other mobile devices.

News.com wrote about two of the announcements at Cebit: Motorola is demonstrating its 3G Motorola V1150 phone in Hannover. The sleek phone will come with an integrated 2-megapixel camera, two-way video calling and a new Motorola ticker technology called Screen3 that streams news and entertainment from Motorola…Sony Ericsson is showing off the W800 phone, the first Walkman- branded cell phone. The handset comes with a digital-audio player, FM radio tuner and 2-megapixel camera. The W800 will have 38MB of free memory for music and images.

Mobile phones are morphing to the point where voice is just incidental. They are becoming, what George Gilder has called, teleputers.

My latest Business Standard column:

As I mentioned in my previous column, Future Tech celebrated its first anniversary recently. Here we take a look at some of the key ideas discussed over the past year. All columns are available online (www.emergic.org/futuretech).

The central theme in most of my columns has been leveraging emerging technologies to build a digital infrastructure in India. By focusing on the needs of users in India, start-ups and established companies can build the next generation commPuting platform, which integrates computing and communications.

In tomorrows world, what is inside todays desktop will move to the server and what is inside a cellphone will power the computer. Broadband networks will be internet protocol (IP)-based. Voice will become yet another service over these digital networks.

It will be a world that will converge at the back-end (data stored in the network cloud) but will diverge at the front-end (multiple devices). The mobile phone will be our constant companion and will be complemented by the availability of multimedia-enabled network computers with large screens. Services will occupy centrestage.

We have the opportunity to build the next technology platforms that will form the foundation of our digital lives. The communications platform needs to be built on IP and be always on.

The computing platform needs to focus on affordability so that a connected computer is accessible to every family in urban and rural India, and every employee in corporate India. The information platform needs to become real time, event driven and multimedia-oriented. This technology platform will be built on the new and next internet always on, ubiquitous, high speed, on demand, personalised and not free.

This new internet will make possible path-breaking applications and services. From voice-over-IP which will allow phone calls anywhere in the country for a flat fee, to video-on-demand which can provide education and entertainment to users when they want it, from software as a service for businesses to automate all their processes to multi-player gaming platforms which will transform leisure time, the new internet will create new opportunities as well as threaten conventional business models.

It will force players in the computing, consumer electronics and entertainment industries to enter each others territories.

As we look ahead and seek to create the next platform, it is useful to look at the rear view mirror. Every 12 years or so, the world of computing sees major breakthroughs. Think of this as the computing equivalent of the Kumbh Mela.

The last major breakthrough was during 1992-1994 when the launch of Microsoft Windows 3.1, Intels Pentium processor, SAPs R/3 and the web browser Mosaic heralded an unprecedented period of all-round growth until the slowdown early this decade. The next computing Kumbh Mela should be just around the corner.

What will it be? My answer: the next big thing in computing will be about building a platform which makes the two most important creations of the past the computer and the internet available to users at a fraction of todays prices.

What emerging markets like India need is the equivalent of a tech utility which makes available commPuting as a utility to the masses.

A centralised platform that makes available computing as a service and accessible via thin clients over a high-speed broadband infrastructure, neighbourhood computing centres that provide access on a pay-per-use basis, a community-centric content platform which makes available local information and helps small businesses connect with one another, and investments in education and healthcare to make sure they reach rural people these are the tech utilitys elements.

India needs a Rs 5,000 network computer, Indian language desktop applications, industry information and process maps (for small and medium-sized enterprises, or SMEs, to automate their business), fixed-price broadband bundles and locally relevant information and services.

There are two key ideas from the telecom industry that the computer industry needs to adopt. The first is the creation of a zero-management user device. The second is a subscription-based utility-like payment model.

The underlying enabler for both will be the broadband industry that is coming alive in India. India needs to leapfrog to next-generation networks that can deliver broadband over the air to users, creating a high-speed, ubiquitous and pervasive data network.

We can make tomorrows world a reality. India has an opportunity once again to do things right. What is needed is a generation of entrepreneurs who think outside the box to create technology platforms and solutions for tomorrows world.

The challenge for entrepreneurs is to think about creating solutions for the twin engines of future growth rural India and SMEs. Indian entrepreneurs have the opportunity to shape history but only if we begin to start looking at the market within.

Rather than trying to only focus on providing services to the rest of the world, we need to start producing hard and soft goods for Indians to use and leverage. Can the next black swan in the technology space come from India?

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!