Category: Emergic

I gave a presentation (MS-PowerPoint, 450 KB; PDF, 480 KB) recently at the AMA on Affordable Computing – very similar to my BangaloreIT.com presentation, but a little expanded – added a few more slides, including one each on Netcore, Pragatee and RISC. The talk went well – I was expecially glad that we got about 25 minutes of Q&A.

Every once in a while, I like to write down (to remind myself!) what we are trying to do in Netcore. Here is my latest effort.

Problem Statement

– SMEs are caught in two traps: technology and marketing
– Computing is still expensive
– Business benefits of using technology are still not clear to most SMEs
– As a result, SMEs use very little of computing hardware and software
– SMEs do not have access to real-time information
– Supporting and managing technology is still a challenge
– There is no easy way to sell software to SMEs
– SMEs find it hard to find other SMEs for tapping business opportunities

Solution Outline

– Demonstrate how connected computers and the Internet can help SME business
– Create/propose a reference IT architecture for enabling intelligent, real-time SMEs
– A connected computer for every employee for less than USD 10 per month
– Integrated Software Bundles, built around only handle information once
– Development platform for ISVs to build vertical / local solutions
– Managed services to remotely manage IT at SMEs
– A virtual marketing and connection mechanism for SMEs

Netcore’s Solution: The Emergic System

– All-in-one server software: Pragatee and Emergic MailServ/Topsight/Enterprise
– Appliances for Server and Clients: Server Box, USD 50 thin clients
– Affordable Computing Solution: thin clients, thick server; cut system TCO
– Desktop solution: Emergic Freedom, Redesigned desktop / rich clients / dashboard
– Integration with Cellphones for real-time access to information
– Software development platform for ISVs: Visual Biz-ic
– Localisation of solution: languages, accounting/business process needs
– Social Network Software: for people to connect with other people
– Information Marketplace for SMEs: Emergic.Net
– Software Distribution Network to reach out to channels and SMEs
– Remote Support and Technology Management Centre
– Themes: Affordability, Simplicity, Integrated, Managed

This is an ambitious and wide-ranging set of things to do in the coming years. The challenge will be executing simultaneously on all aspects to put the entire solution in place for SMEs. It is about taking technology and making possible a different world for SMEs, especially in the world’s emerging markets. Slowly and steadily, we are getting the various elements of the solution in place.

At times, I wonder if the breadth of what we are trying to do is too much for a still-small company like ours. But then I also realise that if we have to bring about a transformation in the way SMEs use technology and do business, we will have to do it and co-ordinate the buildout of all of the components of the system.

The Emergic vision has evolved over the past 2+ years, and will continue to do so. We now have to increase our focus on implementation and taking the solutions to market.

Two interesting stories point to a future of affordable computing. Scott McNealy says “customers are paying up to 10 times what they should to buy and run computers, but a correction will come soon”, and Intel is thinking of ways “to come out with less-expensive versions of its processors and chipsets to better suit the customer base in India, Eastern Europe and other developing regions.”

This is the theme (Emergic) I have talked often in my writings here – we need to bring down cost of hardware, software and support by a factor of 10 to take computing to the next billion users in the emerging markets.

Sun’s approach is elaborated by the News.com story:

Sun believes it has the answer to the problem: Customers should buy collections of hardware and software already assembled and suited to the task at hand, and they should run multiple tasks on those systems to ensure computing capacity isn’t going unused.

The Java Enterprise System will cost companies $100 per employee per year to use, Sun said. That fee includes professional services to help customers switch to the Sun software, as well as training and 60 hours a week of support. The company argues that charging customers that way is simpler than pricing software packages out for different customers depending on how many e-mail boxes, servers, server processors, terabytes of storage space they use.

The Java Desktop System costs $100 per desktop per year or–for customers using the Java Enterprise System–$50 per employee per year, Sun said.

Intel’s ultimate goal is to sell PCs for as little as USD 199, according to its president, Paul Otellini. Writes News.com: “The main question facing the company now is how to take the cost out of building a desktop.”

I think Intel is not getting it right here – it already has the solution. Take its 486 chips or the Pentium I chip, and make a USD 50 thin client. Think thin clients, not cheap thick desktops.

I am often asked about my company (Netcore Solutions) does. So, here is a brief:

VISION

Netcore Solutions is focused on creating disruptive innovations to bridge the digital divide in technology’s next markets: small- and medium-sized enterprises (SMEs), and the rural populace in the developing countries of the world.

Netcore believes that the next set of opportunities will be driven by the twin themes of Utility and Affordability.

IT has become a utility, but at the same time it needs to be affordable for people and organisations to use. This requires thinking and solutions that are very different from the ones which the current set of users in the developed markets have been using. Today’s non-consumers of IT have limited legacy and limited money. If the right technology at the right price comes along, adoption will take place rapidly. The next IT revolution will, therefore, start from technologys new markets todays have-nots and then make its way up the pyramid.

The opportunity ahead lies in using new and emerging innovations to build Affordable Tech Utilities.

The key building blocks are technology solutions like server-centric computing (thin clients-thick servers) with remote server management, open-source software, mobile data, WiFi and Ultrawideband, voice-over-IP, web services, weblogs, RSS-enabled information aggregators and marketplaces. Taken together, they create a new, pervasive technology infrastructure that can facilitate the mass adoption of technology across emerging markets.

The two large, untapped, and presently invisible markets in the emerging markets are the SMEs and the rural markets.

Both these markets are very similar in the sense that they suffer from large-scale inefficiencies because a co-ordination failure among the solution providers has ensured that they have been largely ignored. Their numbers are large. In India, there are over 30 million employees working in 3 million SMEs, and nearly 700 million people living in 600,000 villages. They are waiting for affordable tech utilities to transform their futures. This is the technological digital divide that needs to be bridged. These are the markets Netcore is interested in.

SOLUTIONS

For the SME segment, Netcore offers Emergic, a software stack with a mix of open-source and internally developed software covering Messaging and Security (Emergic MailServ), Desktop Computing (Emergic Freedom), Information Management (Emergic Topsight) and Business Applications (Emergic Enterprise). For growing businesses, Netcore has developed Pragatee, an integrated, entry-level server software.

For the Rural segment, Netcore’s Deeshaa venture is implementing RISC (Rural Infrastructure and Services Commons), a model for the economic development of rural areas. A RISC centre provides rural populations the full set of appropriate services and amenities that are normally available only in urban locations.

In addition, Netcore has established a leadership position in the emerging world of weblogs, RSS and the Publish-Subscribe Web through its BlogStreet portal and Info Aggregator service. Netcore is creating an Information Marketplace platform to facilitate exchange of information that is incremental, updated regularly, distributed repeatedly and requires near real-time delivery.

An Express Computer special issue on Linux has an interview with me, done by Venkatesh Hariharan (Venky). An extract from what I have said:

Our belief is that if you can make things available at an affordable price, there will be a dramatic growth in the usage of computing. It will create a domestic market which we sorely lack. While we have a successful exports business in software, we definitely need to have a domestic market. If Indian industry is to be competitive, we need to be big users of technology. We need to make complete solutions available at an affordable price and with no compromise on the applications front.

Just because we cannot afford things, we dont want to tell people to compromise on applications and performance. This is where Linux provides a very strong platformespecially Linux which is running on the server so that your desktops can be of much lower cost. Instead of three new desktops, you can now give computers to 10 more people in your company for the same investment.

The penetration of technology in Indian companies is so low5-10 percent is what we are at. The installed base is just seven to eight million. Basic applications like messaging, etc, will not be effective if only a small number of people use it.

The idea iswhat does it take to get a computer on every desktop and accessible to every family in the country? This is where a combination of three things is key. This is what I call the 5K PC ecosystem. This consists of the thin-client, server-centric computing and open source software.

What this does is bring down the input costs for computing. You cant sell at a low cost if input costs are high. At the same time, we do not want a nation of pirates. People can pirate a few applications but most applications they cannot pirate. Therefore they cannot use them and are doing things inefficiently. So they are caught in a technology trap.

Our competition is not proprietary software, it is non-consumption. We need to take what Bill Gates said in the American contextA computer on every desk and in every pocketand translate that into an Indian contextA computer on every desk and accessible to every Indian family. We cannot afford dollar-denominated technology, so we should leverage Moores law on the server and leverage our strengths in the software industry through open source.

The issue also has an article by Prakash Advani on comparison of the total cost of ownership between Linux and Windows.

I have been thinking for some time about the need for an all-in-one and affordable server for small businesses. Something that includes messaging, security, file/print server, desktop computing apps running on the server, accounting and CRM, on a Linux platform, so that the price can be kept low. At a price point of between USD 150-250 (Rs 7,500-12,500). Pre-package it with the server sold. The server would cost about Rs 40,000 for 10 users, and go up to Rs 60-70,000 for about 25 users). The software should come pre-loaded with the software.

The competition for something like this would be (a) nonconsumption – companies not using anything, and (b) piracy – just take any version of Windows for zero price. The idea is to offer an affordable alternative with remote support. Combine this with thin clients, and the only machine which needs to be managed is the server.

A couple additional ideas:
– to run Windows apps, small businesses would need a separate Windows machine (Wine doesn’t run everything) with Windows Terminal Services. Can we develop a clone for Windows Terminal Services, or make Wine good enough to run everything Windows?
– over time, develop a VM-ware like clone so that Linux and Windows can run on the same server. This is the only thing that needs to be managed and can do done remotely over the Internet.

We have been working on this as part of our Emergic ideas. I think the time has come to focus on small businesses (5-50 users) and give them a simple, single, managed solution for all their software needs to a very affordable price point (remember: the competition is something that to them costs zero).

What will be needed is to build an ecosystem around this:
– training institutions, to provide end-user training on the applications
– ISVs, to get their software working on this platform for vertical segments
– banks, so they can offer financing for the hardware-software bundle
– channel partners, who can do the selling and already have the small business relationship
– an online marketplace for small businesses to connect to others

Taken together, this can open up markets which do not exist today, and get penetration for Linux in the small business via the server – on the desktop.

The Times of India has an (audio) interview with me, done by Sudhir Chowdhary. (The full text interview seems to have vanished from the site!)

The ‘affordable computing’ dream is the title of a story on me in Rediff by Priya Ganapati. Talks a little about my past (which I don’t like, but maybe that’s why I get heard now!), but focuses more on what I am doing and hope to get done in the coming years (the vision of “a connected computer accessible to every family and employee” in India and other emerging markets). A well-written story.

A TeleInfoCentre would be a computer-cum-communications centre. It would have 3-5 computers connected together in a LAN, in a single room. One of the computers would work as a ‘thick server’ and do the processing and storage. The others are low-cost, low-configuration ‘thin clients.’

“By locating them in the village, we ensure that people do not have to walk too much to use them: access to computing is just a few minutes, rather than a few kilometers, away. This will make them think of computing as part of their lives; a utility, available on-demand,” says Jain.

The TeleInfoCentre would largely work in the offline mode. The server should mirror key applications and relevant data, making it possible for the clients to work without the need for an Internet connection. Updates could be done via CDs or even Wi-Fi (wireless connectivity).

Such radical thinking is what is necessary to bring computing to rural India, says Jain.

How will the supply chain for these low cost computers be created? Who will make them? How will the applications to run on these computers be developed? Will other state governments be open to the plan? If the government cannot pay up completely, where will the funding for the TeleInfoCenters come from?

“I don’t have the answers to all the questions yet. I know we will do it in next 6-8 months. My approach is to try multiple things. Some may work, some may not. But the important thing is to try and I know we are heading in the right direction,” he says.

As I have said before in my paper on Transforming Rural India, it is up to us to bring about change in India “not between two generations, but between two elections”.

I wish Priya had given a link to this blog for people to get read more.

It has been a while since the previous Emergic Update. As we begin a new financial year today, it is a good idea to reflect on what has happened, and the road ahead.

We began work on the Emergic vision about a year ago, coinciding with our move to a new office in central Mumbai. Then, there were a collection of ideas. We had a broad idea of what we wanted to do. Over the year, this has become clearer, and we are now working on three broad areas, which Ill discuss shortly.

These new ideas have generated little by way of new revenue, which has meant that our bread-and-butter business continues to be messaging. That is not enough to cover our expenses at this point of time, so we are in a lossy state as of now. At the same time, I am more optimistic than ever before on the work that weve been doing.

The ideas will pay off, but it may take some time. I imagine us to be in an unknown terrain, without a map. It needs one to make some forays in a few different directions to get a feel for the land around, and then hone on a direction which will take us towards our destination.

Affordable Computing

Emergic Freedom is our desktop computing (thin client-thick server) solution. The economics and value proposition are good, but we need to make breakthroughs in new markets and target new users. This is taking time. Weve also realised that we will need to look at a hardware-software combo for the thin client, rather than looking at a software only solution.

Sourcing either old PCs or low-cost new ones still is not easy. What it is coming to is that we need two price-points: Rs 5,000 (USD 100) what we call the 5KPC for an old PC-old monitor combo, and Rs 10,000 (USD 200) for a new PC-new monitor combo. An intermediate price-point is Rs 7,500 (USD 150) with a new PC-old monitor combo. We will probably need to get a supply chain setup and brand the PCs ourselves. [About a third of the price of a new system consists of duties and taxes in India, while old computers attract an anti-dumping duty of Rs 10,000 this is what has prevented us from bringing the price points down lower.]

In the near-term, our best bets are markets which will give us large volumes. This is not a solution that can be easily sold to enterprises. The focus has to be on todays nonconsumers. Some of the segments that we are looking at are: homes (via Internet Service Providers and cable operators), schools (via NGOs and the government) and in rural areas for TeleInfoCentres.

In between the city and rural extremes, we should also look at the semi-urban areas in India they too need affordable computing solutions. It is not something we have focused on a lot over the past year, given our base in Mumbai. We have also been working to reach out to organisations internationally.

One positive development in recent times has been our ability to get the solution to work on low-speed connections between the thin client and the thick server. Earlier, we needed to have a 100 Mbps LAN between the two. Now, a 128-256 Kbps connection is good enough, opening up the opportunity to run it over ISDN, cable or WiFi.

So, our biggest challenge in the coming year is to ensure that we can carve open the new markets for this disruptive innovation.

Enterprise Software

The focus here has been on two areas: building a new desktop via a digital dashboard which can aggregate events via RSS, and putting together an open-source based eBusiness suite. Progress has been steady, and the components are being put into place. It will still be about 3 months or so by the time we have the complete information refinery ready.

The core idea revolves around enabling an intelligent, real-time enterprise and creating a set of solutions for SMEs in emerging markets. While this has been something Ive been keen on for nearly two years, it has only been now that the tools are being assembled. I see RSS, events and weblogs as the key pillars around which the infrastructure will be built.

A good conceptual framework for what we want to do has been captured very well by William Gurleys recent column on Business Process Management. As I read it, I could now see the components that we are doing mapping on to what he talked about. Of course, we want to make it simple and low-cost for end-users, so the base will have to be Linux and open-source.

I want us to build application cores in the four areas of messaging and security, desktop computing, information management and business process automation. Once we have the cores ready, it should make it easier to customise for different verticals. We have to make the components simple enough that customers themselves (managers in SMEs) can assemble the software they need by defining their business processes. Think of it as Dell-meets-Enterprise Software eliminate the need for consultants and software developers.

It is an ambitious challenge, but if we have to disrupt the existing value chain and increase adoption, the ideas and solutions that we come up with have to have a 10X tsunami-like impact on the world around us.

Blogs

The world of blogs has beckoned for a long time. Last May, I launched my blog. In August, we launched our blog neighbourhood analysis and search engine BlogStreet. Since then, weve grown the feature set of BlogStreet. The core idea that we have to build on is people as information filters. The mix of individuals writing blogs and RSS as a means for distribution of content is creating a powerful combo. There are quite a few ideas we have going ahead I wrote about one recently discussing personal directories as the missing link in information management.

The goal? Build out Vannevar Bushs vision of the Memex an information system that connects us to the ideas, people and knowledge we want, allowing us to probe as deeply as we want. Today, centralized search engines like Google are the only way. What is missing is an individuals context. If we can layer that with concepts like small worlds (Ive been reading Duncan Watts new book Six Degrees highly recommended), there is a potential to build about a contextual connection machine for information in an emergent manner.

Looking Ahead

I have never been more excited about what I have doing in a long time its that energy that I felt in the early days of IndiaWorld, where one cannot wait to get up in the morning and look forward to the new ideas and opportunities that each day will bring. Of course, Id have been much happier if we were also profitable. But at the same time, given a choice between short-term decisions which could deflect us away from our path and perhaps get immediate revenues, and a long-term execution plan that will move us in the direction that we want, I will chose the latter. I have done that in the past year. Now, I need to inject an approach which also ensures that we can increase our revenues and move quickly towards self-sustainability.

The three areas that we have chosen are seemingly diverse. Most people would recommend a single focus. But then, in all that Ive done, I need a bit of diversity. In IndiaWorld, we had 13 portals and a website development business. The wide array of portals gave me a lot of latitude to think, experiment and innovate. Not all of them worked, but it was only because of our willingness to try out new concepts that we succeeded in creating a few winners. It is much the same way today.

The three areas will converge into creating a new information and computing framework for the next set of users in the world. What were just a few paragraphs on paper a year ago are now becoming a reality. The task ahead is to find the markets and users wherein we can make a difference. My personal fascination has and continues to be technology innovation and aggregation. Now, I have to convert this into solutions that real-world users will start paying for.

So, all in all, it has been an exciting though financially disappointing year. Lets make sure we keep the excitement going (jumping over, in Dan Bricklin’s words,”slippery rocks”) and correct the monetary aberrations. It is not one or the other successful entrepreneurs are those who balance both the short-term and the long-term.

I have made a presentation (.PPT, 78 KB) on all that we are doing in Netcore. It is interesting how a presentation helps focus thoughts – because one has to describe to others all that one is working on.