Emergic

India has been a source of many innovations. As pointed out by CK Prahalad in his acceptance speech for the Lal Bahadur Shastri National Award for Excellence, India has ice-cream cones for Rs 5-6 (HLL and Amul), a Rs 1000 banking deposit (Citibank’s Suvidha), a Rs 200 logistics service/month (the Mumbai dabbawallas) and a Rs 500 cataract surgery (Aravind Hospital in Madurai).

Says Prahalad, “The most intriguing thing about India is its sheer size and the nature of problems facing the bottom of the pyramid. Each one of the problems can be turned into a major test bed for innovationShould we believe that it is the poor at the bottom of the pyramid that are not ready or the elites of India who are unwilling to change their beliefs about the opportunity? India is not opportunity or resource starved but starved of imagination. We have to start with that assumption we have to create a global laboratory for innovations for the world’s poor.”

Indian software companies are well-positioned to take on the challenge for creating software for the world’s corporate poor. They have the talent, the capital to make the necessary investments, the understanding of business processes, and a local market. What is needed is a change of mindset, and that may turn out to be the hardest thing to do.

In India, IT-enabled services are seen as the next big opportunity. Yet, there is very little differentiation in the types of the services offered or the markets targeted. People Arbitrage by itself can only take a company that far. Whether it is software services or IT-enabled services, the toughest part is getting the customer. While the Global 10,000 companies may be very alluring, they are also the ones for whom the outsourcing decision is also the hardest, because they have many options.

Targeting the enterprises at the bottom of the pyramid may seem counter-intuitive, but makes sound business sense. The software solution works as the entry point – it is just the start. There is potential to downstream the relationship built through providing software to outsourced services, targeting the same enterprises for people-intensive requirements.

My guess is that the next few years will see India leveraging this software opportunity, but it will be driven by entrepreneurs who come together with a missionary zeal to make a difference, and build a sustaining, profitable, business by targeting the bottom of the enterprise pyramid. The Internet has created a discontinuity in the world of software, and therein lies opportunity for the ones willing to take the risks, and envision a different future. One can draw inspiration from the motley village cricketers of Aamir Khan’s “Lagaan” who through sheer grit and determination beat the British. Rather than follow, India and Indians must aim to lead and win.

Horizontal and Vertical APIs: The software modules developed will not satisfy the needs of every company or every industry. Even across countries, the requirements may vary. For this, it is necessary to define programming hooks (an Application Programming Interface) which can be used by developers to localize and specialise. This is akin to the approach software companies like Microsoft have used to win over the software developers.

Integration: What the customer needs to see is an integrated suite – like a car. The customers do not have the money to pay for mechanics to assemble the car and don’t really care who makes the components as long as what they get is a working car. (Marutis still sell a lot in India!)

Internet for Distribution: While the current flavour of the day is for Web services and ASPs (software on tap, or software as subscription), I believe that the connectivity challenge on the last-mile is not going away anytime soon. Countries like India have state-of the-art LANs but their wide area networks (WANs) lag the world by 5-6 years in terms of price-performance. While fibre optics will solve the problem, the ideal solution is to deliver the software to a server on the LAN, with replication on the Internet. Employees and managers within the enterprise need to only access the local server for the applications and the data.

Whole Solution: The bottom of the enterprise pyramid needs a “complete product”. They have neither the IT staff to integrate various technologies together, nor do they have the money to pay for consultants to evaluate needs and recommend solutions. They are more than willing to change business processes to fit the solution.

The three critical building blocks for the software solution are Messaging, Collaboration and Enterprise Software. Messaging (email and Instant Messaging) help people communicate. This can help bring down the communications costs for the enterprises. Collaboration software helps in sharing of information, and for people to work together in teams – within the informal business network (which can go beyond the enterprise). The Enterprise Software suite helps automate business processes. The first three applications needed as part of the enterprise software are modules for managing money (Accounting), customers (customer relationship management software) and inventory (supply chain software).

The world’s “corporate poor” (at the bottom of the enterprise pyramid) need software solutions at affordable prices. The software they need is not a generation-old, but the state-of the-art. They have the same need for the latest information. They have the same need as their bigger counterparts to keep in touch with customers, suppliers and partners. This world needs its Windows, its Office, its Notes, its Oracle and its SAP. What they do not have is the money to pay for the dollar-denominated software or for expensive consultants to integrate everything together. The functionality needs to be there, not the names.

The market is there: the 20 million small and medium “aspiring” enterprises employ no less than a billion people. What they can afford to pay is perhaps no more than USD 5 (Rs 250) per person per month for the entire software infrastructure.

This, then, is the challenge for Indian software companies. Can a “software factory” be created which fulfills the software needs for the “rest of the world”?

Here are some ideas on the possible approach that such a software factory can take:

Intelligent Cloning: The world’s best software companies have done a lot of the thinking on what features need to be packed into their software packages. What is needed for the software factory is to (a) identify the utilities and packages that their target market needs, and (b) use the 80/20 rule to decide on the feature subset: build out first those 20% of the features that are used 80% of the time. What one gets is a functional product which may not meet every need of every company in the world, but will take care of the most important requirements. Cloning does not mean eschewing innovation or using lag technologies. It means using the state-of-the-art software development environments, the best programming techniques and the smartest engineers and managers, to deliver the best solution at the lowest possible price.

Lego-like modules: The key challenge for the software factory is to define the modules and the features well, so that the work for the development can be outsourced within the software community. This Lego-like approach to developing the software components can help speed up the development and at the same time leverage existing resources and talents in the developing markets.

In a paper written about a year ago entitled “Raising the Bottom of the Pyramid: Strategies for Sustainable Growth”, CK Prahalad and Stuart Hart state:

It is tragic that as a society we have implicitly assumed that the rich will be served by the corporate sector (MNCs) and governments or NGOs will protect the poor and the environment. This implicit divide is stronger than most realize. Managers in MNCs, public policy makers, and NGO activists all suffer from this historical division of roles. A huge opportunity lies in breaking this code – linking the poor and the rich across the world in a seamless market organized around the concept of sustainable growth and development.

Raising the 4 billion poor at the “bottom of the pyramid,” however, will require radical innovations in technologies and business models. It will require a reexamination of the “price-performance” relationships for products and services. It will demand a new level of capital efficiency. It will create a new logic for measuring financial success. It will quicken the penetration of disruptive new, environmentally sustainable technologies. Companies will be forced to transform their understanding of scale, from “bigger is better” to the capability to marry highly distributed small-scale operations and world scale capabilities.
In short, the bottom of the pyramid presents a new managerial challenge one potentially as powerful as the challenge posed by the Internet and e-business.

The emergence of the 4 billion people whom we have called the Tier 4 market is a great opportunity for MNCsThe Tier 4 opportunity is not restricted to businesses serving “basic needs” such as food, textiles, and housing. On the contrary, the bottom of the pyramid represents a massive opportunity for “high-tech” businesses such as financial services, cellular phones, and low-end computers. In fact, for many emerging, disruptive technologies (e.g. fuel cells, wind energy, photovoltaics, satellite-based telecommunications), the bottom of the pyramid may prove to be the most attractive early market.

(The full-text of the paper is at:
http://www.digitaldividend.org/pdf/0203ar02.pdf).

There is a similar pyramid when it comes to the world’s enterprises. At the bottom of this pyramid are over 20 million small and medium enterprises in developing markets like India. How can technology, and especially software, fulfill their needs and aspirations? At the heart of the discussion is the question asked by Prahalad and Hart: How can low cost, good quality, sustainability, and profitability be combined?

There is no doubt that in the last decade, India and Indian programmers have carved out a name for themselves internationally. Companies like TCS, Infosys, Wipro and Satyam are the nation’s pride. They are also incredibly profitable, and consistent in their growth. Much of this growth has come from software services. So, the irony is that while Indian software programmers are the toast and envy of the world and Indian software companies work with the largest and the best companies in the world, there are few Indian software products which have made a mark internationally.

One approach to this software conundrum is to say that why should we (or the software companies) bother to change something which has worked so well in the past decade. This is the same approach has now enabled 4 Indian software companies (Infosys, Silverline, Wipro and Satyam) to list on the US stock exchanges. Why change a winning team?

There is another way to look at this. As Indian software companies offer services to international clients, the IP (intellectual property) that is being created belongs to someone else, and thus Indian companies are leaving a lot of (potential and future) money on the table. There is an obvious element of risk here – risk which becomes harder to justify when one is expected to deliver high, consistent growth to justify their market capitalisations. It then becomes better to take the money instead of trying to worry about market risk.

At the same time, Indian companies (along with similar brethren in other developing markets) face a challenge: the high cost of legal software. A PC is now available for Rs 30,000, while a legal copy of Microsoft Office costs Rs 15,000. Little wonder then that piracy levels run high in many of these countries. This is not to belittle the importance of software. In today’s world, computer hardware may have become a commodity (and a necessity), but software is the fuel to drive a company’s growth. Software is a critical component of the enterprise. And yet, the high costs are scary and unaffordable for many of the companies in emerging markets, especially the small and medium-sized enterprises.

These “aspiring corporate poor” can now think of ASP services providing software functionality on tap, but there are three problems. The first is that of connectivity, which still remains intermittently reliable in most parts of the world. The second is that even for ASP services, the costs are dollar-denominated, while earnings for many of the companies are not. Thirdly, the ASP market is still very much US-centric.

So, then, here is the central issue. Even as Indian software companies help the world’s leading companies with their IT needs, the local (Indian) companies are faced with a no-win situation when it comes to fulfilling their own technology needs. What, then, is the way forward?

Today, the dominant enterprise messaging and collaboration platforms are Microsoft Exhcange (with Outlook as the client) and Lotus Notes. On the Internet, Hotmail and Yahoo are the two dominant free Web mail services. Messaging ASPs (who provide outsourced mail hosting) include Critical Path and Commtouch. Popular Instant Messaging platforms include AIM and ICQ from AOL, Yahoo IM and MSN Messenger.

Email will also serve as the building block for collaborative applications. Email can have forms embedded in them, and I can respond in place, and the action can be either the generation of a response email or the update to a website (in case I am connected). Either way, email will go beyond text and becomes “actionable”. An example of a company which is working in this area is Zaplet.

As we look ahead to the future of email, first let us first take a look at the Messaging value chain.

Device	Message	Client Software	LAN Server Hardware	LAN Server Software	Internet Mail Server	Network
PC Telephone Cellphone Email Pager PDA	Email Instant Message SMS Continuous Media (Audio/Video) Unified Message (Fax, Voice Mail) Actionable Mail Notifications	POP client IMAP client Web Mail Filters Translation Unicode support	Net Connectivity PABX (Voice) Storage Backup Wireless LAN Support	Mail Server (SMTP, POP, IMAP) Global Address Book (LDAP) Anti-Virus Anti-Spam Security Authentication Mail Prioritisation	Routing (via sendmail) Filtering Reformating for different devices Mail Sync – across accounts / devices Instant Messaging Analytics Bulk Mail Support	Internet Cellular Network Paging Network

There will be multiple devices from which we will access email in the future. Ideally, we would like to use an integrated mailbox, with multiple folders, with a single view which is irrespective of the device from which the access is being done. Messages will comprise of not just text, but also audio and video, and could come in different languages.

The need for a LAN server comes in because at least for the foreseeable future, the connectivity bottleneck is going to remain, and so I would like emails delivered on a server in the office LAN from where I can access them quickly. Of course, when I am away from the office, these messages would need to be sync-ed with my mailbox on the Internet (same email address), so that I can access them from home or a cybercafe through a Web browser in case I am traveling.

Since all emails come and go through a central server in the enterprise, it also becomes possible to do analytics on the text and the senders and recipients. Email is where a significant portion of the knowledge base of a company is getting captured. To be able to distill it is what Tacit does.

Email in the future will become even more tightly integrated with other applications and our lives. It has been the Internet’s killer app, and will continue to remain so as it evolves. Email-for-all is on its way.

Let us take a look at how IMAP and other technologies can help solve the problems (outlined earlier) which we face with today’s email systems.

Spam: Filters on the server will allow for the automatic deletion of messages identified as spam. Filters can learn not just from the headers of the message, but also action taken by me and others in my company.

Cc: Sub-addressing, filters and shareable folders can help reduce the “occupational spam”. For example, when I am working on a project, the project leader can create a shared folder which is available for reading and writing by all (with deletion rights resting with the project leader). This way, all the team members can email to the folder, rather than to the individuals directly, thus reducing the Inbox clutter.

Viruses: By selectively downloading attachments, one can reduce the risk of viruses infecting the local system. Also, since IMAP allows for mails to be kept on the server (instead of the client), this can also help reduce the client machine getting infected. Ultimately, inspite of all the anti-virus software that is available, being careful about the kinds of attachments one opens can help reduce, if not eliminate, the risk of being attacked by a virus.

Storage: Since IMAP stores emails on the server, backing up mail becomes easier and the responsibility of the network administrator or the service provider. The user does not have to be worry about local backups.

Search: Since all emails are stored on the server, it is possible to deploy sophisticated search technology on the server, instead of on myriad clients.

Composing: The newer generation of mail clients and Web-based HTML editors will allow for the creation of formatted email.

Notifications: When mail is stored on the server, it becomes possible to alert the sender when messages are delivered and read. Alternately, as IM systems get integrated with email (at some point in the future), an instant message can be used to send the notification.

Security: There are standards like S/MIME and PGP which need to be used for ensuring security. Authentication is done via a login-password, and perhaps through a digital certificate.

Payment Model: For email which has multimedia email, the storage will need to be done by the sender. In this case, the email will need to be sent with a URL which points to where the attachment is. This way, there is only a single (and always updated) copy of the attachment. This reduces the burden on the recipient.

Instant Messaging Integration: This is tricky! Today’s IM systems are like the email systems of two decades ago. They have their own name spaces and are not interoperable. Like email systems first had gateways and then a common namespace, so will IM systems evolve in the years to come.

To understand how email can be made more effective, it is important to understand the two key protocols which the email client uses to interact with the email server. These two protocols are POP and IMAP.

POP, the older and simpler of the protocols, downloads all the emails from the server to the client (there are options now available to leave mail on the server). The assumption here is that the user will want to connect to the server, pick up the emails and then disconnect. Management of the emails is done on the user’s computers. POP minimizes the connect-time needed to access the emails. The disadvantages are that since mails are downloaded sequentially, it becomes difficult to eliminate the junk mail that comes in (since there is no way of knowing till all the emails are downloaded), and mail is not necessarily available from anywhere on the Internet (since it is downloaded to the client computer).

To a limited extent, browser-based mail (also called Web mail, and akin to the free service offered by Hotmail and Yahoo) can ensure that email is stored on a server. The problem here, though, is that one needs to be connected to the Internet for managing the emails.

IMAP, the newer and more complicated of the mail protocols, takes a different approach to mail management. It allows for mails to be stored on the server, with a copy downloaded to the client computer upon request for offline processing. This offline mode of processing synchronises the client state with the state on the server when the user goes back online.

Users can also create folders on the server and manage them, thus ensuring availability of email from any computer which has an IMAP client or uses Web mail that supports IMAP. The flip side is that the server now has to store all the mails for users.

IMAP also allows for the message to be selectively downloaded. The way this comes in handy is to first download only the headers of messages. Messages can be deleted or marked for later downloading (if they have large attachments or access is over a low-speed line). Thus, the user gets greater control on which messages to check first.

A feature of IMAP called sub-addressing also allows specific folders other than the Inbox to be directly accessed. For example, I can subscribe to a mailing list with the email address rajesh.news@indiaworld.co.in, and the email will then go directly into a folder called news (as long as I have created one). IMAP also allows folders to be shared between users, and thus can be used as a building block to facilitate sharing of information and collaboration.

A good comparison of POP and IMAP appears in the paper by Terry Gray at http://www.imap.org/imap.vs.pop.brief.html

IMAP is an ideal protocol for today’s world wherein people are mobile, may access their emails from more than one computer (or device), have a lot of junk mail coming in (so filtering and sub-addressing is needed), and storage space is cheap.

During the last 5-6 years, email has become a “mission-critical” business tool. Executives spend at least 1-2 hours every day in email. In many ways, email has become the “front-end”, the user interface to the Internet. But email still has certain problems.

Spam: A couple years ago, 80% of the email we received would be useful. Today, the percentage is more likely to be 20%. As email marketing has taken off and tools to send out email to large mailing lists have become available, just about anyone can send email to a large number of people – almost at no price. The problem of spam does not seem likely to go away any time soon. In the next few years, not only will the number of emails rise, but so will be the percentage of spam.

Cc: The fact that email is so easy to spend (and to the sender has no real cost) has meant that emails get sent and cc-ed, even though there may be no real reason. Rather than thinking about whether the recipient really needs to get the email, the approach has become that everyone should know (as if sharing knowledge absolves responsibility). This “occupational spam” includes joke e-mails, copying somebody unnecessarily and hitting “reply all” instead of targeting individuals.

Viruses: Email attachments have now become quite lethal due to the emergence of viruses as payloads. In the fast few years, on more than a few occasions, corporate messaging networks have been brought to their knees due to viruses sending out emails to the entire address books of individuals.

Storage: A significant portion of business communications is happening via email. This means that it is important to be able to archive messages for the future. In many cases, email is downloaded on the desktop, which makes storage the responsibility of each individual.

Search: One needs the equivalent of a Google for email. The search tools available with many of the email clients are quite limiting. The ability to search must go beyond just the headers and into the attachments.

Composing: The formatting available in most email clients is still quite limited. While it is easy to send HTML pages as attachments, it is still a challenge to compose better formatted email.

Notifications: A courier package can be tracked all the way through to delivery. Yet, emails have very limited tracking capabilities – one still doesn’t know (seamlessly across all mailing systems) on delivery of a message, or if it has been read or deleted.

Security: Most email communications is still open and unencrypted – it is estimated that only 10-15% email sent is encrypted. Sending open email is like sending business letters in unsealed envelopes. Besides, it is also possible to spoof the sender, so one can never be sure that the sender is indeed the person who you think it is.

Payment model: It is interesting that the cost of storage in email is borne by the recipient. On the sending side, there is only transient storage that is needed. So, assuming the bandwidth costs are the same, the recipient actually incurs greater costs than the sender. This problem is going to get worse as email size increases, especially with multimedia email.

Instant Messaging Integration: The email namespace is independent of the IM name space, and there is no integration between these two-related messaging applications.

A lot of what we do today involves email and working in teams. In this context, it is interesting to see how things have changed in the last few years, and what can be done to make people more productive using available and coming technologies.

According to a recent study by United Messaging, there were a total of 891 million mailboxes in the world at the end of 2000 (a growth of 67% from the previous year), making email the most successful communications technology since the television. The figure includes corporate email boxes (using software like Microsoft Exchange and Lotus Notes), ISP mailboxes, Web mail (from service providers like Yahoo and Hotmail) and wireless mailboxes. The US with 5% of the world’s population has nearly half of the world’s mailboxes, so there is still plenty of growth that is likely to happen in the coming years.

Yet, email by itself has had only a few changes in the past decade. The biggest changes have been:

• Shift from a text-based interface to a graphical interface, piggybacking on the growth of Windows and the Web
• HTML Email, allows for emails to be embedded links and images, allowing for richer formatting of emails. It is, however, hard to actually create HTML documents to be sent as email
• Address Book, allows for communications with a lot more people by storing email addresses (in many cases, automatically, and embellished with name completion when sending email)
• Attachments support, allows for almost anything to be sent via email, through the MIME protocol
• Filtering (which few use), allows for automated management of incoming emails

During the same time, the number of emails that people receive and send has multiplied exponentially. There are so many more people to communicate with. For many, email, more than the browser, has become the real window to the Internet. Also, the growth in a real-time variation of email, Instant Messaging, has been even faster. In the years to come, the number of emails and instant messages that we are expected to process is likely to increase even more, with the growth in devices connected to the Internet.

A view from Gordon Moore, Intel’s co-founder, on the change being brought about by email (as quoted in a New York Times interview):

What keeps me up at night is doing my own e-mail. I wouldn’t say anything keeps me up at night worrying. Anything that changes – in a dramatic way – the way we do things, requires us to give up doing things that may have been attractive before. I’m amazed to see how many people working at Intel are sitting at terminals pushing buttons where previously they may have been working together. I guess that does introduce a kind of an isolation but it sure is an effective way to do things, essentially 24 hours a day. It gives a lot of capability for which there is a sacrifice. I’m not sure it sacrifices much more than did the introduction of the automobile assembly line, where employees could see each other but not hear each other. I’m not sure it’s a qualitative difference.