Bus. Std: Tomorrow’s World Encourages Upstarts

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In this series, we are discussing cold technologies which Pip Coburn has defined as those that have neutral revenue or even anti revenue attributes. Cold technologies are important in our context because even as they shrink the investment the users have to make, they help them catch-up or even leapfrog to a world that is faster, better, cheaper in terms of the digital infrastructure that we need to build out in India. In the previous two columns, we covered five such cold technologies: open-source software, software delivered as a service, voice-over-IP, Wi-Fi and network computers.

China Supply Chain

A recent cover story in the Business Week talked about The China Price. The article began: They are the three scariest words in U.S. industry. Cut your price at least 30% or lose your customers. Nearly every manufacturer is vulnerable — from furniture to networking gear. The result: A massive shift in economic power is under way. It added: Makers of apparel, footwear, electric appliances, and plastics products, which have been shutting U.S. factories for decades, know well the futility of trying to match the China price. It has been a big factor in the loss of 2.7 million manufacturing jobs since 2000.

Chinas presence looks like a colossus across the world of manufacturing. Using its low-cost labour and a large domestic market, Chinese manufacturers are achieving huge economies of scale, allowing retailers like Wal-Mart to sell microwave ovens at $28. The world textiles industry waits with bated breath to see what will happen in 2005 as global trade barriers come down. Chinas presence across global value chains has helped keep prices low. Now, increasingly, Chinese companies are seeking to compete more broadly. Recently, Chinas largest computer company was in talks with IBM to buy out its PC business. Going ahead, China seeks to compete with low wages and in high-tech.

India Services

What China has done in manufacturing, India is doing in services. Indias emergence in the software and business process outsourcing services value chain is helping companies cut their costs. A skilled and abundant workforce has been complemented by cheaper telecom costs to enable organisations create software engineering and helpdesk extensions in India. Costs are cut anywhere from 30-70% when companies outsource. Companies using India as a services base is now widespread. The quantum of work being outsourced to India is still small, leaving plenty of room for growth.

In a recent survey on outsourcing, The Economist wrote: Over the next ten years, Russia, China and particularly India will emerge as important hubs for producing services such as software engineering, insurance underwriting and market research. These services will be consumed at the other end of a fibre-optic cable in America, Japan and Europe. Just as Dell and Wal-Mart are obtaining manufactured goods from low-cost countries, companies such as Wipro, TCS and Infosys, for instance, are already providing IT services from low-cost India.

File Sharing Networks

Peer-to-peer file sharing networks promise to revolutionse content distribution. Even though Napster was forced to shut down, other P2P networks thrive. More than half the traffic on the Internet is now generated by P2P applications. What they are doing is offering distributed alternatives to the problem of disseminating not just software updates but also broadband content. This promises to spur even more rapidly the growth of multimedia content. As the Web grows beyond text and images to include audio and video, P2P networks can provide affordable alternatives to content distribution.

The Economist wrote recently about the most popular of these applications: The most active P2P system, accounting for an estimated 35% of all internet traffic according to CacheLogic, is called BitTorrent. It is an open-source software project that is free to use and enables very large files to be stored and retrieved efficiently at essentially no cost. Though it is used for pirated music, it comes into its own when distributing really large files such as movies, games and large pieces of software such as the Linux operating systemthings that would otherwise be very costly for companies or individuals to make available for download With systems such as BitTorrent, the more a file is in demand, the more available it becomes. Content automatically ends up being stored close to the users who request it, improving the performance of the system.


The Internet is also impacting the world of advertising. As search engines have become popular (once again), they have also pioneered a new model to increase the effectiveness of online advertising. The ability to measure responses and pay based on performance is providing unprecedented capabilities to advertisers in fine-tuning their message. Business Week wrote in a special report on the surge in online advertising in the US: The Net is winning over mainstream advertisers with its computational precision. It delivers hard, quantifiable results measured in clicks and sales — down to the penny. In the process, it’s turning advertising from an art into a science.

Going ahead, as the time spent online by users increases, online advertising will provide increasing competition to the traditional broadcast media. Dan Gillmor wrote in the San Jose Mercury News: Consider the new breed of advertiser in the online world. Google’s text ads, which pop up after someone searches using keywords, cost in most cases a small fraction of what it would cost to advertise in a local newspaper or broadcast outlet. In other words, Google and the other companies in this space are attracting ads from businesses — including businesses that are as small as one person in a home office — that in many cases never advertised before. The potential for this is larger than most people have recognized. In theory, the Net-based advertising market is almost unlimited — extending to any one person with any one thing to sell.

So, get ready for the world of tomorrow increasingly built around cold technologies. They will disrupt incumbents and offer opportunities to upstarts. This is the process of creative destruction that guarantees that the only constant in the world is change.

Bus. Std: VoIP, Wi-FI and Network Computers

My latest Business Standard column:

In this series, we are discussing cold technologies which Pip Coburn, a managing director and global technology strategist in the technology group of UBS Investment Research, defined as those that have neutral revenue or even anti revenue attributes. Cold technologies are important in our context because even as they shrink the investment that users have to make, they help them catch-up or even leapfrog to a world that is faster, better, cheaper in terms of the digital infrastructure that we need to build out in India. In the previous column, we covered two such cold technologies: open-source software and software delivered as a service.


Internet telephony is turning the world of telcos upside down. From being able to charge by distance and time (based on where the called party was and how long the conversation lasted), phone calls have become a fixed price commodity as they are shifting to the Internet. We have also seen this in India with phone calls to the US being advertised for under Rs 2 per minute as compared to nearly Rs 100 a few years ago. Software like Skype offers free person-to-person calling via computers.
The Wall Street Journal put the disruption in the US market in perspective: The Bells have lost some 28 million local phone lines since the end of 2000 — a drop of more than 18%. This is the first time since the Great Depression that phone companies have seen their lines decline. The Bells are now losing 4% of their residential lines a yearBehind the telephone earthquake is a giant force in business history: Just a few years after the Internet investment bubble spectacularly burst, the Web is now maturing and irrevocably transforming commerce. Today phone calls — just like music, photos, and video — can be turned into digital information and delivered much like e-mail over the Internet.


Mobile phone companies globally have paid tens of billions of dollars for licences for 3G. The world on offer: ubiquitous, high-speed Internet access. The problem: the future may arrive unscheduled! This is happening because of Wi-Fi (which uses unlicenced spectrum) and other next-generation data technologies.

Wi-Fi Networking News puts this in perspective: If users get hooked on Wi-Fi networks that are free to access, they may decide to go out of their way to find a free hotspot rather than pay for the cellular access which at least these days is far more expensive. However, its likely that a certain market segment will pay for the convenience of having the higher speed wireless data from the cellular operators in more locations.

Underlying this shift is what Kevin Werbach has called the radio revolution. The combination of unlicenced spectrum and adaptive mobile phones can dramatically change the way we think of spectrum and what we pay for it. Werbach wrote in the introduction of his report: The radio revolution is the single greatest communications policy issue of the coming decade, and perhaps the coming century. The economics of entire industries could be transformed. Every significant public policy challenge could be implicated: competition; innovation; investment; diversity of programming; job creation; equality of access; coverage for rural and underserved areas; and promotion of education, health care, local communities, public safety, and national security.

Network Computers

The twin challenges of affordability and manageability are making companies consider alternatives to Windows desktops. The use of thin clients in emerging markets can reduce upfront costs and also tackle the complexity challenge. From small- and medium-sized enterprises to education, network computers have the potential to tackle the issue of non-consumption that has hampered the buildout of the digital infrastructure in developing countries.

Even though the idea of thin clients and network computers has been around for a long time, it is only now that serious interest is emerging along with the first success stories. ZDNet wrote recently about Europcars shift: The car hire firm has saved on hardware and maintenance costs by migrating its 1,500 stations to thin clients running Linux, but Stefan Ostrowski, the CIO of Europcar, said that while migrating to Linux thin clients has saved them money, but it would not have been as cost effective for them to migrate fat clients to Linux. The effort to install or maintain Windows and Linux is the same, though you might save a bit on licence costs, said Ostrowski. You are not saving a lot by moving fat clients from Windows to Linux. But by converting fat clients to terminal servers we have reduced the total cost of ownership by 60 percent. The main advantage for Europcar in migrating to Linux terminals has been the ability to centrally manage the terminals in its 1,500 rental stations, which are spread across Europe. Ostrowski said this has dramatically reduced the cost of maintaining the systems and in particular the cost of implementing updates.

This series will continue in the next column.

Bus. Std: The Cheap Revolution

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In a world where affordability, value-for-money and reduction in total cost of ownership are increasingly becoming themes driving technology purchases, there is an emergence of what Pip Coburn of UBS Warburg has called cold technologies. Richard Karlgaard of Forbes has labelled it as the Cheap Revolution.

Coburn wrote in a research note in early 2003: A cold technology issue is one that commands a major portion of the agenda while having neutral revenue or even anti revenue attributes. A hot technology has the potential to generate revs. So, in 1980, whether one was a fan of the PC or not, both would agree that if the PC took off the tech pie would expand. The PC was a hot technology. Linux is a cold technology. It will shrink the pie. Cold technologies often are issues that are not product related but gain a disproportionate share of the agenda. The migration of the food chain into China is a cold technology issue.

More recently, David Kirkpatrick wrote about technology in turmoil in Fortune: The technology business is in a state of turmoil that was unimaginable just a couple of years ago. Industry icons are under threat, market leaders are at risk, and the whole pantheon of tech greats seems to be under renovation…Microsoft and Sun face open source, Intel seems weakened, outsourcing threatens services playersthese are just a few of the recent shifts in the firmament.

Barrons wrote about technology spending in the US context: [None of the current trends] seems monumental enough to drive a big wave of tech spending in the next 12 months. Sure, companies are still ga-ga over open- source software like Linux, they are adopting voice over IP phone services, they are buying densely packed blade servers and they are spending generously on security software. They also are forking over large sums to meet the stringent audit and reporting demands of Sarbanes-Oxley. But the dollars involved in all of those simply aren’t enough to move the needle on tech spending, given the huge size of the overall technology business.

In the past, the technology industry built it, and the users kept coming wanting the next new thing. But this is no longer true. There is a shift in thinking in enterprises big and small the focus now is getting the maximum value from new investments. In developing countries like India, cold technologies are even more important. They will help the market expand beyond the top 10%.

So, which are these cold technologies? In this and two future columns, we will look at some of the cold technologies that are giving enterprises and consumers more bang for the buck from their investments.

Open-Source Software

The remarkable growth of Linux and open-source has provided alternatives across the software stack. The Apache web server, PostgreSQL and MySQL database software, JBoss application server, OpenOffice desktop productivity suite and Asterisk IP-Telephony solution are some examples of open-source applications which are taking money away from commercial applications by offering alternatives at significantly lower price points.

Forbes wrote recently in an article on no-frills software: The future will be dreadful for software vendors like IBM, Microsoft and Oracle. Customers will balk at ever-escalating prices for mainstream products and will opt whenever they can for bargain-basement software based on freely available code, such as MySQL or the Linux operating system. They’re using the mere threat of installing this open-source software to browbeat Oracle and Microsoft into coming back with better prices.

The International Herald Tribune wrote about the new wave in the software industry: As software vendors end a second year of single-digit growth, MySQL and other second-generation open-source companies are booming. Most are doubling sales annually and adding staff as they transform the industry by distributing basic, powerful software for free or at a small fraction of the market price For the second-generation companies, the key to making money in the open-source universe is simple: Give and ye shall receive.

Software as a Service

The emergence of companies like Salesforce.com (customer relationship management) and Ketera (spend management) which offer software as a service is challenging existing incumbents like Siebel and Ariba. The traditional software industry model has been to charge upfront for software, with additional charges for upgrades and maintenance. The new generation of application service providers now offers software delivered over the Internet for a monthly fee just like a utility company. Thus, while the old paradigm used to have a high initial fixed cost, the one is where there is no fixed cost but only a variable periodic cost.

Marc Benioff of Salesforce.com said in an interview with InfoWorld: This is about a new paradigm thats just lower cost and easier to use than the old paradigm. And traditionally in our industry, that can become a huge success Youve got to look at eBay and Amazon. These are the best solutions: written on big database servers with high-performance systems, high-performance hardware, massive amounts of storage, scalable app servers delivering pages under 500 milliseconds Selling things on eBay is a lot cheaper than setting it up on your store.

This series will continue in the next column.

Bus. Std: The Mobile Phone Revolution’s Lessons

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A few years ago, the installed base of mobile phones and computers in India were about the same. Now, even as mobile phones march on to a figure of 50 million, the total number of computers in India nudges 12 million. Mobile phones are growing by about 2 million a month, while computers need about 6 months to touch the same figure. So, what caused this divergence in growth? Will computing take-off in India? Are there learnings for the computing industry from the cellphone world?

Let us start by looking at the utility of the two devices. After all, the decisions to buy (or not buy) are made by consumers. Cellphones in India filled a latent need of person-to-person voice communications. More than mobility, it gave people a phone which they sorely lacked thanks to outdated and incumbent-protecting telecom policies over the past decades. Communications is a basic need of people. And for long, this was stifled some of us remember the long waiting periods for a phone connection. Into this environment came the mobile operators. With a willingness to make investments and using cutting-edge technologies, they were aided by a global telecom recession which made equipment available at much lower prices. All of this resulted in great value for money for consumers as prices fell to a couple of rupees a minute and cheap handsets from Chinese and Korean makers flooded the market, forcing others to compete on affordability. This created a positive feedback loop wherein it is the masses who have adopted mobile phones and continue to drive growth. Reliance Infocomm’s entry acted as the dynamo for even greater affordability by lowering further the price barrier for the consumer.

Contrast this with the computer industry. Even though the device has general-purpose applicability in many scenarios, Indian consumers are caught between non-consumption of the hardware and piracy of software. A computer still costs about Rs 15-20,000 for the hardware, with basic software adding another Rs 20-25,000 to the cost. Besides affordability, the other challenge with computers is manageability. Viruses, Spam and Spyware have made life difficult for end-users. Put it all together and the net result is that the consumption of computing is a fraction of that of mobile telephony.

I would like to believe that we are today with computing where we were with mobile phones five years ago. There is a large potential market, but a few things need to be done to jumpstart consumption. Just like cellphones, computers too have the potential to grow by a factor of 10 in the next five years. What is needed to make this happen?

There are two key ideas from cellphones that computers need to adopt. The first is the creation of a zero-management user device, and the second is that of a subscription-based utility-like payment model. The underlying enabler for both will in fact be the broadband industry that is coming alive in India.

Total cost of ownership of computers can run into Rs 1,500-2,000 a month if one counts the cost of hardware, software and support. One way to bring down the hardware cost dramatically is to simplify the device. Think about the ease of using cellphones. That same simplicity needs to come to computers. The access devices can be thought of us thin clients or network computers, with processing and storage happening on the server. What does this is eliminate all support costs at the user end and also makes possible the delivery of applications and content without worry of piracy by the owners of the rights.

The subscription model is what the telecom industry is very good at. Investments in infrastructure are made upfront, and users are asked to pay a small monthly fee for basic services, with additional payments for value-added services. The pre-paid model has done very well in extending mobile phone usage to a mass market, even as the front-loaded computing industry model has limited it to the upper classes. Imagine if computing were also available like a utility. This can reduce the entry barrier and create a positive feedback that can then get software developers and content providers creating solutions for an ever-growing user base.

To bring the solution to fruition will require the creation of wireless broadband networks. In India, the last mile connectivity to homes and businesses has been a challenge. As of now, the two options are the copper line laid by the telephone company and the cable connection which carries television. In the first case, the incumbents (BSNL and MTNL) control most of the wired telephone lines across India and so far their broadband rollouts have been slow. The decision by the government to not unbundle the local loop has eliminated prospects of competition on this front. In the second case, the quality of cable along with the investments needed for upgrades have limited cable to carrying one-way content.

What India needs is a leapfrog to next-generation networks that can deliver broadband over the air to users creating a high-speed ubiquitous and pervasive data network. This can then enable deployment of network computers like cellphones connected to a centralised grid of servers which provide the compelling services that users need and are willing to pay for. In fact, given the digitisation that is happening in both voice and television, the network computer could in future be the converged device capable of providing a hybrid set of services to users.

To create a base of 100 million computing devices across India, there is, therefore, a need for thinking disruptively. The current model in the world of computing has gotten us so far, but will not take us further to make the vision of a connected computer accessible to every home, family and employee and build the digital DNA of India. We need to look at the other successful industry that has transformed communications in India in the past five years. Welcome to the world of commPuting.

Bus. Std: Microsoft faces a Serious Challenge Again

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Over the previous two columns, we discussed the emerging technologies in the area of search. While these ideas are helping provide us with a better window to the information web, there are also changes (and challenges) afoot on the desktop front with the search also underway for a new interface to the world of content and applications. Even as Microsoft has dominated the desktop since the advent of personal computing over two decades ago, it faces its second serious challenge in the past decade.

The first challenge came in the form of Netscape and the web browser. During the early days of the commercial Internet around 1995-96, it was believed that the browser could become the de facto interface for everything. Sensing the threat, Microsoft responded by integrating Internet Explorer with the Windows operating system and effectively neutralising the Netscape threat. Over the past few years, there has been little innovation on the browser front as Explorer commanded a virtual monopoly on the desktop.

Now, Netscapes ghost is making a comeback. Loopholes in Internet Explorer raised security concerns and created an opportunity for Mozilla and its Firefox variant. As it turns out, Mozilla emerged from Netscapes decision to open-source its browser work in the late 1990s. There is increasing speculation that Google could be working on a browser built around Mozilla to create an alternate desktop platform and target Microsofts monopoly.

The New York Post wrote recently in a story that looked at some of the high-profile hires that Google had made: Google appears to be planning to launch its own Web browser and other software products to challenge Microsoft The broader concept Google is pursuing is similar to the network computer envisioned by Oracle chief Larry Ellison during a speech in 1995The idea is that companies or consumers could buy a machine that costs only about $200, or less, but that has very little hard drive space and almost no software. Instead, users would access a network through a browser and access all their programs and data there.

News.com added: Google has also been rumored to be working on a thin-client operating system that would compete with Microsoft in areas beyond search. Techies have even discussed the idea of Google becoming a file storage system.

A commentary on ZDNet provided additional perspective: [Googles] strengths are data management, Web applications, targeted advertising and brand, and its most pressing need is to lock users in. It may well be the world’s favorite search engine but if someone else comes along tomorrow with a better way, then we’ll switch overnight. We’re fickle that way. What Google must do is get itself on the desktop. The obvious Google-shaped hole is local searching, where Microsoft has a history of conspicuous failure. A browser plug-in that amalgamated general file management with knowledge of Outlook, multimedia data types and online searching would be tempting indeed. Add extra features such as integrated email, instant messaging, automated backup to a remote storage facility and so on, and it gets very interesting. That would need considerable browser smarts, but would extend the Google brand right into the heart of the unconquered desktop where it would stick like glue It would also remove one of the big barriers that stops people moving from Windows to open source. If all your important data has been painlessly stored on Google’s farm and there’s a neat, powerful Java browser-based management tool to retrieve it, you can skip from OS to OS without breaking into a sweat.

What all this adds up to is a different world of computing one that merges local computing and the Web seamlessly. This is a world of service-based computing. At the keynote address of DemoMobile 2004, Chris Shipley, the conference producer, said: Service-based computing delivers applications and data from a managed computing platform to a relatively simple end device the point of interaction with the data. Service-based computing puts the onus of managing the computing environment on the service provider, and liberates the end-user to engage with the information. Service-based computing will drive elegance into application and device design. Service-based computing not only enables, but requires, simplicity and reliability in end-point devices, no matter if they are a cell phone or a desktop PC. Indeed, service-based computing is bigger than todays mobile and wireless market. It is broadly encompassing of most enterprise, small business, individual, and convergent consumer computing. Service-based computing is the future model for nearly-all computing and communications.

As we peer into the crystal ball of tomorrow, the future starts becoming apparent: a variety of devices accessing centralised service-driven platforms. Think of the backend as a grid providing computing as a utility. The devices are thin devices delivering virtual desktops and encompassing not just the web browser, but also a capability to deliver rich client applications and rich media. This is a world that will be created first among the next users of computing in emerging markets like India.

Techs future is ready to be played out with us as the central participants. The communications revolution has delivered the worlds cheapest telephony services to India. Can we do something similar in the world of computing?

Bus. Std: Tomorrows Search Technologies

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Search has become a window to the world wide web of data. Todays search is simplistic: type a few words in a box, get back zillions of results, and click on one or more of the results to see if we get what we are looking for. Think of todays search as the DOS era: a good start, but not enough to unleash the real power of what can be. It took a decade to go from DOS to Windows. It has taken us almost as long to start imagining and working towards the next generation of search technologies. Here are some key ideas which will help define tomorrows search:

Integration between Desktop and Internet Search: One of the great inconsistencies of our computing world has been the disconnect between being able to search the web much more easily than our own desktop computer. This is beginning to change with the emergence of desktop search utilities like Copernic, Blinkx and Hotbots desktop search toolbar. What is still missing is seamless integration between our personal data (spread across emails, attachments, IM logs and documents) and the web.

Better Visualisation and Navigation Tools: Is a set of pages, each with 10-20 results, the best way to navigate the millions of search results that can show up? It is only now that ideas from information visualisation (for example, Groxis) are making their way for viewing of search results. By clustering results and providing visualisation techniques, it should be possible to provide rich interfaces for navigation.

Real-time Search: The current model involve search engines crawling web pages every so often and including them in their search results. This means that at times it can be several days before new updates on a page can show up in search engine results. There are two ways to address this problem: websites can notify search engines via a ping when they are updated (much like weblogs do to sites like weblogs.com), and search engines can dynamically query specific databases via web services APIs to deliver results (much like Googles own API offers). A third approach has emerged with narrowly focused RSS- and XML-based search engines like Feedster, Technorati and PubSub.com.

Searchstreams Analysis: What searchstreams offer, according to John Battelle of Searchblog, is the ability to capture and record your search history as well as the things you looked at, all in one package. Battelle, who is also writing a book on search, explains further: What I really wish for, both to tell the story of my search, and to annotate my book, is the ability to take that searchstream and turn it into an object – a narrative thread of sorts, something I can hold and keep and refer to, a prop to aid in the telling and retelling of how I came to my answer. Tracks in the dust, so to speak, so others can follow and make their own, or follow mine and see (and question!) how I came to my conclusions. Imagine, I thought to myself, if instead of footnotes and citations, I could append searchstreams… Next-generation infoware tools like Furl (recently acquired by Looksmart) and del.icio.us are already working to enable some of this. Searchstream analysis could also be used to add context and personalisation to search. Searchstreams also offer a foundation to construct Vannevar Bushs vision of the Memex.

Multimedia Search: Our world of data has grown to beyond search. Even though there is image search available on search engines, it is restricted to the text and keywords associated with the images. What is needed is the ability to look inside sound files, images and videos and allow search based on the content. This becomes especially important in the context of the growing ease of generating and publishing multimedia content via cellphones.

Mobile Devices: Talking of cellphones, it is going to become increasingly important to support a quality search experience on these devices. The current search results are best shown on a web browser. Yet, in countries like India, the number of mobile devices computers. So, the focus for search needs to be on providing accurate results in the form of microcontent that can be sent and displayed on mobile devices. Not only does this mean a different format, but it could also mean providing location-based information.

Local Search: Much of our life is spent in neighbourhoods. It is quite hard to find local information in the vicinity of where we live and work. It is estimated that a quarter of the searches performed on search engines have a local flavour to them. Being able to integrate the results with maps, directions and other neighbourhood-specific information can make search engines much more relevant. This is where search engines like Yahoo and Google will compete head-on with classifieds and yellow pages.

Vertical Search: Chris Sherman wrote on SearchEngineWatch that searchers are becoming more sophisticated, and are learning that general purpose search engines are not always the best choice for every type of search. Because these search engines have a narrower focus and limited domain, they can offer specialized utilities for a richer experience. An example of vertical search engines is GlobalSpec, which focuses on the engineering industry.

The state of Search is very much like the way the scientific world was in the seventeenth century until Issac Newton came along and helped lay the foundation for the world ahead with his theories and inventions. A similar revolution is needed in the world of Search. Can we in India play a role, just as we did in some of the mathematical discoveries many centuries ago?

Bus. Std: Searching the Net — New Technologies

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One of the defining battles in the mid-1990s was between Netscape and Microsoft over control of the desktop. Netscape threatened Microsofts Windows lock with its web browser. Microsoft fought back with a vengeance and finally won, as a marginalized Netscape was bought by AOL. Now, there is another battle thats shaping up which could be equally defining for the future of computing.

This time, the attacker is Google. Over the past few years, Google has become the search engine of choice. As its dominance has soared, so have its ambitions. Over the past couple years, Google has extended itself beyond search to other areas organically and via acquisitions. In recent times, the wheel has come a full circle with speculation rife that Google may be planning to launch its own browser.

There are two parts to the story as we see unfolding as Google, Yahoo and Microsoft, along with a host of others, work to define tomorrows interface to the information web. The two parallel threads consist of building better search engines and creating richer interfaces. The search engines are the backend to solve the information overload problem, while the interfaces are the doorways to the world of content and applications.

We will first discuss advances in search technologies. Later, we will look at how we will access this emerging world of service-based computing.

The problem of search is one of plenty. There is a lot of data on the web that needs to be converted into useful information. Search is one the solutions to the proliferation of data that has taken place with the growth of the Internet. As John Battelle of Searchblog put it recently: Search is our response to the extraordinary info-abundance in which we’re all awash.

Googles PageRank technology helped it separate the wheat from the chaff. In a recent article on Googles history, the Economist (Technology Quarterly, Sep 16, 2004) explained how the algorithm works: PageRank works by analysing the structure of the web itself. Each of its billions of pages can link to other pages, and can also, in turn, be linked to. [Googles founders] Mr Brin and Mr Page reasoned that if a page was linked to many other pages, it was likely to be important. Furthermore, if the pages that linked to a page were important, then that page was even more likely to be important. There is, of course, an inherent circularity to this formulathe importance of one page depends on the importance of pages that link to it, the importance of which depends in turn on the importance of pages that link to them. But using some mathematical tricks, this circularity can be resolved, and each page can be given a score that reflects its importance.

The search of today can be considered in the C-prompt era, and needs an upgrade. So, what will be the Windows of the search era? In an interview with ACM Ubiquity, Ramesh Jain, professor of computer science at Georgia Institute of Technology, explains what needs to be done: Current search engines like Google do not give me a steering wheel for searching the Internet. The search engines get faster and faster, but they’re not giving me any control mechanism. The only control mechanism, which is also a stateless control mechanism, asks the searcher to put in keywords, and if I put in keywords I get this huge monstrous list. I have no idea how to refine this list. The only way is to come up with a completely new keyword list. I also don’t know what to do with the 8 million results that Google threw at me. So when I am trying to come up with those keywords, I don’t know really where I am. That means I cannot control that list very easily because I don’t have a holistic picture of that list. That’s very important. When I get these results, how do I get some kind of holistic representation of what these results are, how they are distributed among different dimensionsTwo common dimensions that I find very useful in many general applications are time and space. If I can be shown how the items are distributed in time and space, I can start controlling what I want to see over this time period or what I want to see in that space.

One glimpse of search innovation comes from Amazon with its A9 search engine, which is built around Googles search results, and also integrates Amazons own book search results. John Battelle explained A9s approach in a column for Business2.0: A9 has broken search into its two most basic parts. Recovery is everywhere you’ve been before (and might want to go again); discovery is all that you may wish to find but have yet to encounter. A9 attacks recovery through its original Search History feature and its integrated toolbar, which tracks every site you visit. But new to this version of the site is a feature A9 calls Discover, which finds sites you might be interested in based on your click stream and — here’s the neat part — the click streams of othersA9 is more of a Web information management interface, with search as its principal navigational tool. [It is] betting that over time, Web users will come to recognize, then demand, that their search service not only find sites based on queries but also remember where they have been and what they have clicked on.

A few years ago, it seemed the search game was over. Results were inaccurate and portals were the thing to do. Googles cutting-edge technology of linking resurrected an industry. Yet, the innovation in search is far from over. The game has just begun. In the next column, we will look at some key ideas which will define tomorrows search.

Bus. Std: Has Innovation shifted from Silicon Valley to India?

My latest column in Business Standard:

During a recent visit to the US, I spent a week in the Silicon Valley. The Silicon Valley is a hub of innovation. The freshest of ideas and work continues to happen there. In part, it is due to the ecosystem that is already in place the serial entrepreneurs who are on their second, third or even fourth venture, the angels who provide not just the seed capital but also the mentoring, the venture capitalists, the university backdrop (especially Stanford and Berkeley), and above all, the culture of risk. It is this mix that makes Silicon Valley unmatched globally.

The week that I spent in the Silicon Valley was my longest in four years. I did about 35 meetings during this period mix of friends, interesting technology companies, and entrepreneurs. As I look back on my meetings, there is one impression that I find hard to shake off the world’s innovation capital (in technology) is in a holding pattern waiting for the next new thing. Inventing the future, not waiting for it to happen, is something people in the Valley are used to doing.

There almost seems to be a hiatus as venture capitalists and entrepreneurs wonder what is the next big wave. Will it be next-generation search engines? Or web services? Or broadband wireless technologies like WiMax? Or all-in-one personal communicators? Or something different like biotech or nanotech? Whatever it is, it does not seem obvious in the Valley.

Out here in India, we have no such qualms. Outsourcing is In and Hot. Anything and everything that needs people and can be delivered over a wire can now be done from India. A recent Economist business lead story discussed the outsourcing of the IT departments in US companies as part of infrastructure management services. We are delighted about the fact that soon, Bangalore will employ more engineers than the Silicon Valley.

So, has the tide of innovation and entrepreneurship shifted from the Silicon Valley to the Indus Valley?

Far from it. A growth in jobs in and around urban Indian centres does not equate to the coming of age of India as an IT Superpower. There’s a lot more to be done if we have to at the forefront of invention and innovation. We definitely have an opportunity to lead in the next generation of computing and communications technologies, but for that we need to see beyond writing software, managing back offices and networks for international companies. India needs to build an ecosystem of innovation and entrepreneurship to build upon its success in services to occupy centrestage in the world of technology in the years to come.

First, we need entrepreneurs willing to take risk. As it turns out, there aren’t enough of them. Taking risk also means embracing failure. We had a boomlet in dotcom entrepreneurs a few years ago, but that bubble burst quite quickly as the realisation dawned that this was not going to be get-rich-quick phenomenon. Entrepreneurship is not just about making money, it is about inventing tomorrow. And for that to happen, many have to fail for one to succeed.

Second, we need early-stage venture capital and mentoring for the start-ups. Even as plenty of growth capital is available in India, there is very little finance available for entrepreneurs with passion and ideas. Part of the problem in India is that the VC funds have borrowed business models from the West, set up large funds, which in turn require chunky investments. So, even as it is possible for companies to get $5-7 million growth capital, it is nearly impossible to get a fifth or tenth of that amount for technology start-ups.

Third, entrepreneurs with the initial capital will need mentoring. India has a limited history of technology entrepreneurship and as such the bench strength is not deep. Start-ups face all kind of challenges in their early days as they seek to reduce the risk of failure. Advice from experienced entrepreneurs and business people is what they need to make sure they do not make silly mistakes.

Fourth, we need talent willing to join start-ups. This means that people have to look beyond the fat, rising pay packets and be able to share the risk (and reward) of the entrepreneurs in building up the new business. As salaries in the IT industry have risen and lifestyles have grown, it is easy for complacency to creep in. Instead of continuing the climb after reaching the top, we want to take rest! This continued hunger for growth and risk is what will create the success stories that will start the positive feedback loop of entrepreneurship.

Finally, there is a need to focus on the middle of the pyramid market. Between the two extremes of trying to create solutions for global markets from India (highly unlikely it will succeed because of the distance from the target customers) and the bottom of the pyramid (always a very large enticing opportunity), there is a middle in urban and semi-urban India which needs innovative solutions at different price points. As India develops, this is an increasingly promising target segment. Once it can be made to work with this segment, the solution can be extended horizontally to other emerging markets, and vertically to the bottom of the pyramid.

India has an opportunity to replicate the success of Silicon Valley by building its own Innovation Valley. Entrepreneurs seeking to venture out on this road with mountains beyond mountains would do well to remember these words of Dan Bricklin:

In big business, when you need to cross a river, you simply design a bridge, build it, and march right across. But in a small venture, you must climb the rocks. You don’t know where each step will take you, but you do know the general direction you are moving in. If you make a mistake, you get wet. If your calculations are wrong, you have to inch your way back to safety and find a different route. And, as you jump from rock to slippery rock, you have to like the feeling.

BUS. Std: The Net Will Change

My latest column in Business Standard:

The Internet as we know it is about 10 years old. It has had its share of ups and downs during this period. As we look ahead, the Internet that we currently use is going to be fundamentally transformed by an assortment of new technologies and business models. These will have far-reaching implications for us in India in both our personal and professional lives.

The Internet’s impact has been rather limited in India in its first decade. Yes, we have about 8-10 million Internet connections and 20+ million users. But there are more who use cellphones. Applications and services on the Internet have also been surprisingly slow to develop, hobbled by lack of imagination, venture capital and business models. The connectivity situation (low speed, high cost, and intermittently reliable) has not helped.

As we look ahead, a number of developments offer promise of an Internet platform which could be as good as the best in the world. We have yet another opportunity to leapfrog. (Considering that we don’t normally do things when they should be done, attempting to leapfrog is always a good option!) A positive feedback cycle can be created by low-cost access devices, affordable broadband connections, relevant applications and value-enhancing services. There is a need for co-ordinated action across multiple industries to realise this future.

So, what does the New and Next Internet portend? What are its characteristics?

Always-on: We are moving in India from a pay-per-use pricing model to a flat rate subscription model (in some cases, with download limits). But the instant availability of the Internet connection will fundamentally change the way we use the Internet everything now becomes a few clicks and a few seconds away.

Ubiquitous: As data networks envelop us, the Internet will become pervasive. Already, the presence of cellular networks provides computer users the ability to connect from anywhere. In the coming years, technologies like WiMax and mesh wireless will blanket much of urban and semi-urban India.

High-speed: The narrowband speeds that we are used to will give away to higher speeds as real broadband makes its way to the mainstream. The world wide wait will be a thing of the past. What this will do is encourage the use of more media-rich content.

On-demand: As connectivity improves, there will be little difference between online and offline. If it is out there, it is instantly available. This will lead to the rise of centralised services especially for business applications. We will have control over when we want entertainment delivered.

Multi-format: The computer will no longer be the only device accessing the Internet. Smartphones with wireless data networks will provide equally viable alternatives. This means that there will be two screen footprints that content providers will need to cater to.

Two-way: The growth of weblogs is a harbinger of the publish-subscribe Internet. Readers and surfers will have the ability to participate in the content creation process. Cellphones with cameras can turn device owners into content producers.

Personalised: The Internet will also become more individualised as websites (especially search engines and portals) build up increasingly sophisticated profiles based on what we do. This will enable highly targeted advertising.

Not Free: This new Internet will not be built around the free access model that we have been used to. The eyeballs-centric business model is a thing of the past. As we find content and services of value, we are more likely to start to pay for them.

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 computing, entertainment, consumer electronics and entertainment to tread into each other’s territories.

We are already seeing early services which are building around these new attributes in the US and some other countries: Apples iTunes music store sells music and could as easily be extended to other DRM (digital rights management) content, Google has fundamentally changed the online advertising business, Starbucks complements its coffee blends with Wi-Fi hotspots, Chinas online games have transcended piracy, Salesforce.com has signalled the rebirth of the application service provider (ASP) business, TiVo timeshifts television and will soon offer movie downloads, Vonage offers flat-rate unlimited calling plans over IP networks, cable companies offer a bundled triple play service combining cable, telephony and Internet access.

India, too, will experience many of these disruptive innovations sooner than we can currently imagine. The New and Next Internet is the harbinger of change and turmoil. It creates opportunities and threats. It is time that we start thinking and building for tomorrow. Because someone somewhere might be doing just that.

Bus. Std: The Next Computing Kumbh Mela

My latest Business Standard column:

In the previous column, we looked at how every twelve years or so, the world of computing sees major breakthroughs which transform the landscape. Think of this as the computing equivalent of the Kumbh Mela. The last major breakthrough was during 1992-94 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 in the early part of this decade. The next computing Kumbh Mela should be just around the corner. What will it be?

Consider the present. The installed base of computers in the world stands at over 600 million, and is estimated to touch 1 billion by 2010. Cellphones already have over a billion users worldwide. More than 500 million new phones with an ever-increasing array of features are being sold every year. Broadband networks both wired and wireless are proliferating. Devices like Apples iPod are becoming status symbols in the US. There is even talk of Apple becoming the Microsoft of music.

Search engines are now the window to the Web, as evidenced by the black swan Google. Internet advertising has been reborn via the search engines and their ability to provide contextual links. eBay is working to make inefficient markets efficient globally and considers its market opportunity at about $2 trillion. Application Service Providers are making a comeback as software becomes a service, even as the enterprise software industry faces consolidation. Outsourcing to India and other countries continues growing. Bangalore will soon have a greater concentration of techies than the Silicon Valley. Telcos are shifting voice to IP networks. Radio Frequency IDs promise a world where machines will talk to other machines.

As we look ahead to the next computing Kumbh Mela, consider a couple of thoughts.

Following the announcement of Googles Gmail in April, Rich Skrenta wrote on his blog at Topix.net: Google is a company that has built a single very large, custom computer. It’s running their own cluster operating system. They make their big computer even bigger and faster each month, while lowering the cost of CPU cycles. It’s looking more like a general purpose platform than a cluster optimized for a single application. While competitors are targeting the individual applications Google has deployed, Google is building a massive, general purpose computing platform for web-scale programming. This computer is running the world’s top search engine, a social networking service, a shopping price comparison engine, a new email service, and a local search/yellow pages engine. What will they do next with the world’s biggest computer and most advanced operating system?

This prompted a post by Tim OReilly: In a brilliant Copernican stroke, gmail turns everything on its head, rejecting the personal computer as the center of the computing universe, instead recognizing that applications revolve around the network as the planets revolve around the Sun. But Google and gmail go even further, showing that once internet apps truly get to scale, they’ll make the network itself disappear into the universal virtual computer, the internet as operating system Pioneers like Google are remaking the computing industry before our eyes. Google of course isn’t one computer — it’s a hundred thousand computers, by report — but to the user, it appears as one. Our personal computers, our phones, and even our cars, increasingly need to be thought of as access and local storage devices. The services that matter are all going to run on the global virtual computer that the internet is becoming.

I believe that the future of computing will be driven not by the existing users but the new users. These are going to be from the worlds emerging markets. They need computing at the price of a cellphone. They need computing as a utility. 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 the next users at a fraction of todays prices. It will be about making hardware, software, broadband connectivity, content and support available for Rs 700 ($15) per user per month for the next billion users of computing. This is a global market of $180 billion per annum which does not exist today.

To address this market needs a reinvention of the computing ecosystem. Luckily, all the elements needed to make it happen exist. Whats needed is for entrepreneurs in countries like India to look within at homes in their neighbourhood, at the small- and medium-sized enterprises in their city, and the schools and colleges which educate the next generation. Look around, and imagine the future one in which computing is ubiquitous, and a platform which can touch and transform peoples lives.

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 each other, and investments in education and healthcare to make sure they reach rural people these are the elements of the tech utility.

The computing Kumbh Melas of the past created innovations which diffused computing and the Internet across the developed markets. This first phase of the technology revolution over the past few decades touched the lives of the top of the global pyramid of consumers and enterprises. The next breakthroughs will take information technology across the digital divide. As William Gibson said, The future is already here its just unevenly distributed.” The next computing Kumbh Mela is happening. Can we see it?