It’s an interesting move. Gives them a presence in the SME market in Europe, coming after their purchase of Great Plains for the US SME market in late 2000. Wonder who they’ll look at in Asia.

According to a Merrill Lynch report, “Navision sells ERP and CRM software to small and medium sized businesses, predominantly in EMEA (85% of total revenue). Navision has been Microsoft-centric for some time and runs its apps on SQL Server.” [EMEA = Europe, Middle East and Africa]

The definition of “small and medium businesses” varies greatly across the world. Asia has lots of exporters, especially in China and South-East Asia. Given the price points for the software (which will obviously be denominated in USD), the bottom of the enterprise pyramid will still remain untapped.

Also see: News.com story on the purchase, and Gartner’s take.

A Scientific American article on IBM’s manifesto.

IBM argues in its treatise that the goal should be "autonomic" computer systems analogous to the involuntary nervous system that allows the human body to cope with environmental change, external attack and internal failures. "Our bodies have great availability," Morris observes. "I have soft errors all the time: my memory fails once in a while, but I don’t ‘crash.’ My whole body doesn’t shut down when I cut a finger."

This article talks about the looming problem because of the burgeoning disposal of cellphones. The suggestion is to re-cycle the phone or sell it in developing countries.

The study by Inform said that on average a cellular telephone is kept only 18 months and in many cases thrown into a closet or drawer and finally discarded with the household garbage.

By 2005, there will be at least 200 million cell phones in use across the country and another 500 million older phones may be stockpiled in drawers, closets and elsewhere, waiting to be thrown away, the report estimates, based on expected market growth and cell phone purchases in recent years.

Travis Larson, a spokesman for CTIA, the wireless trade group, said the industry has collected more than a million used phones to date and wants to expand its recycling and ``donate-a-phone'' programs in which private groups collect phones and give proceeds to charity. Many of the phones taken back are resold in developing countries, he said.

I haven’t yet seen much of this happen in India. A new cellphone costs as less as USD 80-100 (Rs 4-5,000). But think about computers. A new computer costs as much as USD 500 (Rs 25,000). It should cost no more than a cellphone. The only way that will happen is if PCs from countries like the US can be re-cycled to the emerging markets. Shipping a PC is obviously going to be much more expensive than the cellphone. But what we are really interested in is the motherboard. Take that, add the keyboard, mouse, cabinet, network card and monitor locally, and use it as a “thin client” talking to a “thick server”, and watch computing touch the next 500 million users.

This is the question raised by Saras Sarasvathy of the University of Washington in her paper. (I came across the paper through an article by John Cook in the Seattle Post-Intelligencer Reporter.)

It is one of the best notes on entrepreneurship that I have read. I have gone through many ups and downs in my 10 years, and for long have believed that an entrepreneur thinks very differently from a professional manager. Sarasvathy’s paper captures the difference very well. Entrepreneurs think “effectually”, which is the opposite of “causal” reasoning.

Causal rationality begins with a pre-determined goal and a given set of means, and seeks to identify the optimal – fastest, cheapest, most efficient, etc. – alternative to achieve the given goal…Effectual reasoning, however, does not begin with a specific goal. Instead, it begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with. While causal thinkers are like great generals seeking to conquer fertile lands (Genghis Khan conquering two thirds of the known world), effectual thinkers are like explorers setting out on voyages into uncharted waters

It’s the same process which I’ve gone through in 1994 and in 2001 as I thought about what to do in life in both the years. One starts with what one has at hand and then the ideas evolve over time. For Emergic, I said to myself: We have to create something which leverages our base in India and at the same time goes India to other similar markets, creates a software platform like what Microsoft has done, and focuses on “value-added aggregation”. We may not be able to create the newest technologies, but we can definitely try and integrate them better than anyone else. The information flow on the Internet (a lot of it through weblogs) helps in making the jigsaw puzzle pieces visible; what is important is to put the picture together differently, clearer, faster and better than others.

Some of the other points made by Sarasvathy:

• For seasoned entrepreneurs, surprises are part of the flora and fauna of the landscape
  
• Turn the unexpected into the profitable; Ready-Fire-Aim
  
• Causal reasoning is based on the logic, To the extent that we can predict the future, we can control it. Effectual reasoning, however, is based on the logic, To the extent that we can control the future, we do need to predict it.
  

The last point above is especially true. Entrepreneurs imagine a future which is very different. It is this future that they want to get there first, with a strong belief that “it gets created through the strategies of the players.”

Let’s see how we do with Emergic in the next few years. Whatever happens, you’ll read about it here!

Three articles I wrote on Entrepreneurship:

• Entrepreneurship: Entrepreneurship is a lot more than just getting an idea and starting a company. It is the tougher choice, not the easier one. But this is one journey where the joy is as much in the ride as in reaching the destination. (March 12, 2001)

• Entrepreneurial Learnings: Entrepreneurs do not start to create failures. Yet, only 1 in 100 startups succeeds. If one were to ask entrepreneurs when the start about their chances of success, most would give themselves greater than even odds, even as high as a 60-70% chance of success. The reality though, as we know, is very different. While no one can predict success or failure, it is important to do things right to begin with. (July 16, 2001)

• Life as an Entrepreneur: An entrepreneur is not necessarily a risk taker, but a risk reducer. Each day at work, the entrepreneur seeks to make decisions to increase the longevity of the business and diminish the risk. And yet, herein lies a paradox. For an entrepreneur, lack of growth (and uncertainty) is like death. When things start becoming too predictable, the challenge ebbs away. It is then time for a new dream, a new vision. (October 15, 2001)

(Note: This column is part of an ongoing series on "India's Next Decade". Over the next few columns, I have compiled a series of notes from various writers on what Kevin Werbach has called the Next WWW: Web Services, Weblogs and WiFi. Later, I will provide the context of how this is the set of opportunities our generation has to build new companies, and perhaps, a new India.)

Paul Abrahams and Thorold Barker write in Financial Times (April 14, 2002) about how WiFi and 3G are likely to co-exist:

Wi-Fi's biggest disadvantage is that it is less flexible - consumers must be in a specific place to access services rather than being able to wander around at will. The positive side - laid out by Kent Thexton, chief data and marketing officer of MM0 - is that wireless Lan will get customers used to wireless data services outside the office or home and will help build the overall market. The technologies could then become complementary, with customers using cheaper wireless LAN when they are in a hot spot or need very high data speeds, and premium-priced 3G when on the move.

Amey Stone, writing in Business Week (April 1, 2002), argues that 3G may in fact find it difficult to compete with WiFi:

This grassroots flavor -- similar to the bottom-up movement from which the Web itself sprang in the mid-1990s -- is what makes Wi-Fi so powerful, say tech analysts and consultants. "This came out of left field," says Andrew Cole, the global wireless practice leader at Adventis. "Now all the major carriers are sitting up and taking notice."

This is a vastly different wireless Web than the one the major network operators envisioned. The six big wireless carriers in the U.S. have spent billions on buying spectrum licenses and building 3G networks that can carry data at high speeds. Only 3G will give you a connection to the Internet that's always open from anywhere -- while driving down a lonely back road, for example.

Because Wi-Fi offers faster, cheaper Net connections and is here now, though, it could eat away at what already looks like a smaller-than-anticipated market for 3G data services. "It will be hard for 3G to compete on a price point that makes sense," says Tom Taulli, author of Tapping Into Wireless. Adds Eric Kintz, associate partner at Roland Berger Strategy Consultants in San Francisco: "There aren't that many people who need a truly always-on connection" -- 3G's primary selling point. "For most mobile professionals, having wireless access at airports, hotels, and the office is sufficient."

Writes Kevin Werbach in Release 1.0 on how WiFi can be leveraged to build out community wireless networks:

Unlicensed wireless services open up connectivity. Anyone can connect to a WiFi wireless LAN with a card costing less than $100 (or built into many laptops such as Apple's Powerbooks). A reasonably sophisticated user can create his or her own home network with an access point costing under $200. And collectives or individuals or small-scale businesses can establish free or commercial public access points almost anywhere. There's something liberating in the idea that users are taking control of the airwaves, just as dialing into an ISP once felt like a subversion of the dominant telephone companies over whose networks the connections operated.

Already, various cities in US and Europe have WiFi networks being set up by hobbyists and community do-gooders, providing free access in the neighbourhood. Writes Erick Schonfeld in Business 2.0 (April 2002):

A quietly growing legion of wireless guerrillas is using 802.11 -- and components ranging from Pringles cans to wire-wrapped plastic tubing -- to set up wireless networks in at least 40 U.S. cities, from Seattle to New York to Austin, and many more cities overseas. The dream is to create enough overlapping networks so that wherever you go, you can open a laptop equipped with an 802.11 antenna and hook into high-speed Web access. Some Wi-Fi missionaries are techno utopians who share their high-speed Internet access for free. Others are entrepreneurs setting up for-pay networks in cafes, hotel lobbies, airports, and backcountry towns.

In fact, the Wi-Fi cause may turn out to be a sleeper technological movement -- like the Internet itself -- that creeps up on the world, gaining adherents without fanfare until it's suddenly everywhere. The 802.11 wave certainly has a crucial element all sleeper movements share: The utter devotion of a happy band of tinkerers and true believers. And they think they've only scratched the surface of what their systems can achieve.

An example of what's happening in Hawaii is discussed in the same article by Schonfeld.

Stuart Johnson, writing in InfoWorld (March 8, 2002), discusses the convergence between Web services and Wireless, two of the new WWW technologies:

Call it the "W" zone. That's the point where Web services and wireless technologies converge. As the world moves toward a less hard-wired definition of Web services, our view of the workplace is also changing. Perhaps Microsoft describes it best: In the future, services will be "hung" off individual workers, no matter where they go.

It's not until you couple Wi-Fi with emerging trends in Web services that the technology becomes truly transformative. That's because both technologies promise to dramatically reduce IT costs.

For example, instead of wiring buildings for networking, many companies are choosing to implement 802.11b on each floor or in each department, replacing miles of dedicated cable with a handful of access points. Couple that with Web services built using XML and/or Java, and you've got a recipe for the future of IT -- the ability to deploy flexible, interoperable applications on the Web, communicating easily without much of the manual reprogramming required today.

Web services, Weblogs and Wireless taken together are opening up a new world of opportunities. This time around, India has every opportunity to take up a leadership position, as long as we are willing to envision and invent tomorrow.

Emergic is at this stage a concept. It means combining emerging technologies to create solutions for emerging enterprises (SMEs) in emerging markets like India. Emergic is about taking the vision of "computing and communications for all" to the next 500 million users in the world -- most of whom are in the world's developing markets. They cannot pay for technology denominated in dollars. They need cheaper hardware, software and communications.

Some of the key ideas in Emergic are Thin Client-Thick Server, Digital Dashboard, Integrated eBusiness software, WiFi for Community Networks, Weblogs (BlogStreet and Emergic.Org) and SME Clusters.

Thin Client-Thick Server: Computer penetration in SMEs in countries like India is very low. The installed base of computers in India for example is about 6.5 million, of which about 3.5 million PCs were sold in the last 3 years. Software on the desktop is mostly pirated. The root of the problem lies in the cost of the PC. It is USD equivalent * Exchange Rate + some duty component. It needs to be priced according to PPP (Purchasing Power Parity) -- roughly USD 100 for the desktop, and not USD 700 as it is currently. How can we make this happen? Use Second-hand PCs from the western world -- these should be available at very low-cost. Keep the motherboard and the monitor, dump the hard disk and CD-ROM drives. Make the machines as thin clients. Use Linux on the Thick Server (any current desktop).

Digital Dashboard: Use Instant Outlining and Knowledge Blogs the first building block of a new, shared collaborative workspace on the Thin Clients. A simple reading and writing environment, integrated into the IM client and the Browser. Within the enterprise, this becomes the primary RTW (read-think-write) platform, and one which can be easily shared across employees. This is different from the "thick client" and P2P platforms in the developed markets -- this is because we want to use the newest technologies but on 3-4 year-old PCs.

Integrated eBusiness Software: ERP+CRM+SCM+ERM+whatever else is needed within the enterprise. But, a fraction of the functionality of what the BigCos like SAP, Siebel, i2, Oracle, etc. provide at no more than USD 5 per person per month. All the apps are integrated together using Web Services. Its what Larry Ellison talks about -- the ultimate enterprise software suite.

This is the SME Tech Utility. Think about it. All the computing one needs at USD 100 in the first year (for a 3-year period, with USD 10 per annum for maintenance in the next 2 years) and software for USD 60 per annum. Over a 3-year-period, the total cost of this "Tech Utility" is no more than USD 300 (or roughly USD 10 per month). Now, anyone earning more than USD 100 per month (Rs 5,000) can be given computing (hardware and software) on the desktop. As long as they can improve their productivity by 10%, the investment is recovered. This is where the next 500 million users are going to come from -- they are the ones who have not been using computers so far because they cannot pay for it. They are at the bottom of the enterprise pyramid. This is the Emergic Opportunity that lies ahead of us.

WiFi can be used to build high-speed public access community networks. WiFi (802.11b) is being seen as the solution for wireless LANs. But in emerging markets, what is needed is low-cost, high-bandwidth connectivity to the network. Cable, DSL, etc. will take a long time to roll out. WiFi uses open, unlicences spectrum. Let entrepreneurs set up wireless access points and start offering the services in the neighbourhoods, taking bulk bandwidth from the ISPs.

Weblogs can become the SmallCo's marketing tool. This is the approach we have chosen. We intend to tell you all our ideas, thinking and actions -- what we are doing to implement this vision. Weblogs empower the amateurs in writing and the SmallCos in marketing. Weblogs are also a discontinuity in the world -- for the first time, the Web is becoming two-way. Our efforts are in two directions: to keep you updated through this Weblog on what we do, and how we see technology and events from a non-developed-country perspective, and secondly, by launching shortly a Weblog directory and indexing engine. Google is great for the Web, but we need something smaller and different for the blogs. Watch out for BlogStreet!

SME Clusters is what will get formed as SMEs create their own blogs and community blogs. As the small people and companies of the world come together, it will have a magical effect -- Emergence, where the whole will be much greater than the sum of the parts. SMEs can together make a big difference to the world of trade and commerce. The Internet has so bridged them only from a communications point of view. Imagine if they can, using software standards like Web Services and business standards like ebXML, combine their businesses together like Lego -- what will the whole look like?

Think Hobbits and Middle-Earth, and then extrapolate to Middle-Enterprise.

Middle Enterprise

Middle-Enterprise is the world which exists between the consumer/Soho market and the BigCo enterprise market. There are 6 billion consumers and 10,000 Big Companies. Between them are 25 million Small and Medium Enterprises (SMEs), what we call Middle-Enterprise.

It is a world which is hard to reach, it is a world which has for long been neglected. And yet, this is where most of the world’s economy is driven from. Middle-Enterprise is today’s Middle-Earth. A lot of the Middle-Enterprise comprises the corporate poor of the world, the bottom of the corporate enterprise pyramid. This is what has been largely left untouched, especially in the emerging markets of the world, with all the technology revolution of the past 10-20 years. In this world, for many, it is like time has stood still. This is the next battlefield. This is the Final Frontier.

Target Market: the SMEs of the world, especially in Emerging Markets
Holy Grail: make SMEs Intelligent, Real-Time Enterprises
Objective: Reduced Cost of Computing and Communications in the Enterprise
How: SME Clusters, aggregations of SMEs; building a “fellowship”, a coalition
Solution: SME Tech Utility, Emergic
Economic Driver: Profit per SME Cluster
Trojan Horse: Building an SME Distribution System

The scope of what we want to do is awesome: first, we are trying to combine hardware, software and communications to create a new enterprise technology architecture for SMEs; second, we are combining technology with content to attract SMEs; third, as SMEs come together, they will aggregate into SME Clusters, which become micromarkets; fourth, we will help SMEs grow by providing an infrastructure for microcredit and putting them in touch with other SMEs, creating a virtuous positive cycle to attract new SMEs. Growth is the only survival technique for SMEs. This is what Emergic will enable.

In Jim Collins’ book “Good to Great”, in the chapter on “The Hedgehog concept”, he asks three questions which I have answered here:

What can we the best at? Aggregation of technologies, concepts, SMEs. Have the world’s best “clusterings”. And from these clusters build emergent behaviour. This means we are not inventing new things. Assimilation, imbibing new things as they come and applying them into our framework. Good at copycat, imitation, low-cost. Also, leveraging the Internet as a medium for distribution and aggregation. We should be the best at using the Internet – it runs in our blood since 1994. Its what I spend most of my day at! Better use of existing tech, better integration than anyone else.

What drives our economic engine? Profit per SME is one way to think of it. Obvious. Won’t cause us to think out of the box. It will cause us to milk each SME which will be counter-productive and self-defeating. Better is Profit per SME Cluster, per SME micromarket. This changes the game. First, it makes us look at aggregations/clusters/groups – as we should. Need to market indirectly. Second, makes us think of all the kinds of groupings – by industry, profession, social, affiliation, association. Keep on thinking how best to segment SMEs. Think of each cluster as a Walgreen’s convenience store and work on maximizing profit per store. Yahoo eGroups has the micro-classifications but they haven’t taken it to the next level. Need to build an “emergent/self-organising” layer. In fact, we can even think of SME Clusters being present in the BigCos – think of clusters as decision-making units.

What are we passionate about? The Underdogs, bottom, the ordinary, the average. The forgotten masses, people and cos. like us in countries, markets, areas no one really cares about. The “Ants” – individually little, but collectively great. Bldg a new India. Leverage new tech and the Internet. Leapfrog over the BigCos and the Developed Markets.

A Personal View

Emergic is a venture on a large scale (in terms of how many things we have to sync together). For us to succeed, we have to get lots of the details right. The 3 cornerstones of this will be built around:

Aggregation / Integration -- of various technologies: we are not necessarily going to create new things, but we have to integrate existing things (content, tech) better than anyone else. In Samachar, we aggregated content; now, its going to with technologies. There is no way sitting in Bombay we can invent the next new thing. Innovation has to come from the way we put these things together.

Clustering -- leverage the micromarkets and communities which exist by providing them a platform to interact; create SME clusters in a self-organising manner so its scalable. The economic driver (a notion from Jim Collin's Good to Great) to maximise: profit per SME Cluster.

Understand the Internet better than others -- this is what I think is a strength of mine. It is what helped in 1994 (for IndiaWorld) and this is what will help me now. Just the time spent and knowledge of what is possible and not possible in the "virtual" world. If we can leverage this, it also means we can achieve economies of scale without spending a lot of money. We have to push the envelope in what can be done with the new Web, the two-Way Web and the new WWW -- Web Services, Weblogs and WiFi.

Namaste! A few words about me (Rajesh Jain) and the blog.

Have just completed my first decade as an entrepreneur in Mumbai, India. 1 Hit, a few Flops, 1 Average. The Hit was IndiaWorld (Story: Parts I, II, III), India's first Internet portal which was launched in 1995, which was acquired by Sify in November 1999 for USD 115 million. The Flops were what I did from 1992-1994: object/multimedia databases, image processing and some offshore software projects. The Average performer has been Netcore, a Linux-based messaging software company started in 1998. We have 100+ clients in India.

My next plans: grow Netcore into Emergic, offering cost-effective technology solutions for small and medium enterprises (SMEs) in emerging markets like India. In doing so, enable the formation of SME Clusters and their transformation to Emergent Networks.

More Details

Born in Pune on India's 20th Independence Day (August 15, 1967). I went to school and college at St. Xaviers in Mumbai. Did my B Tech in Electrical Engineering from the Indian Institute of Technology, Bombay in 1988, and my M.S. in Electrical Engineering from Columbia University, New York in 1989. I then worked at NYNEX Science and Technology for 2 years before returning to India in 1992.

I launched IndiaWorld in 1995. From its pioneering start, IndiaWorld grew to be one of the largest collection of India-centric websites, comprising Samachar, Khel, Khoj and Bawarchi. The IndiaWorld sites are now part of Sify.com.

I am a Member of Sify's Advisory Board, and Managing Director of Netcore Solutions, an Enterprise Messaging Solutions company.

A few articles on me: TIME (Asian Edition Cover Story, Interview), Columbia University Engineering News

The Blog

Emergic.Org will talk about our work in creating the cost-effective tech solutions for SMEs. We've begun work on projects like a Thin Client-Thick Server, Digital Dashboard and BlogStreet. More on these in the coming days.

Emergic.Org will also give my views on the world of technology. The vantage point is an emerging market. We need technology, but cannot afford to pay it in dollars. The digital divide needs to be bridged. It is time we entrepreneurs in countries like India became leaders in technology products, rather than pure service centres for the rest of the world. Lets become the anchor store in the world mall, not a discount outlet. Lets lead, not follow.

Emergic.Org builds on my writings of the past. Have been writing a daily column on Tech Samachar since November 2000. My earlier columns used to be on IndiaLine (1997-98) and in Express Computer (1995-96). Over time, I'll put together all my older writings here on Emergic.Org.