From Fortune, here are a few quotes by Bill Gates:

Inside a company you're doing sales analysis, project planning, project budgeting--does software make that stuff as easy as it should be? The answer is, Not within a million miles. I mean, you sort of forecast based on what your Siebel customer-relationship management [CRM] software tells you, and you try to look at your SAP enterprise resource planning [ERP] data, but there's not really a process that systematically deals with all that...And then there's your work flow during the day. An information worker gets lots of e-mails as people want you to bid on something or respond to a problem. All these "events" are coming in on your PC. Does the software help you know which of those you should ignore or pass along to somebody else, and how to prioritize them? No. We don't do that yet...The goal [for Office] is to come up with software to make information workers more productive: helping them manage their schedules, prioritize their events, understand the business processes they participate in, and keep their information secure. And we are nowhere near that yet.

One of the interesting boundaries inside a company has always been between back-end systems like ERP or CRM software and the knowledge workers sitting at their desks living in a very unstructured world of phone calls, faxes, and e-mails. A business transaction between two companies actually involves at least four dimensions: The knowledge workers in company A talking to knowledge workers in company B, and these same knowledge workers on both sides also interacting with their own back-end systems. So we really have to understand these boundaries both within a company as well as between buyers and sellers. That's what web services is all about.

There are five form factors: wall-sized, desk-sized, tablet-sized, pocket-sized, and wrist-sized. What we need is a more complementary relationship across the devices so that you can think, "Because I have an electronic calendar on my PC, then my wrist device can tell me about traffic conditions without my even asking, because it knows where I'm going." But to work, the devices have to work well together.

Two articles. The first talks about Linux's growth in enterprises, and how it threatens a Sun bastion (Wall Street): "Linux believers say a system using Sun's servers offer no demonstrable advantages over the plain-vanilla servers running Linux, despite being roughly 50% more expensive. Linux may also carve into Microsoft's NT server software market, but since NT is significantly cheaper than Sun's Unix offerings, it hasn't been hit as hard yet on Wall Street."

The second article is about Linux for consumers in the form of Lindows.

can Lindows become a viable business? After all, Microtel is now paying about 25 cents a copy on average [for putting Lindows on its USD 199 PCs being distributed by Wal-mart], and in January it will start distributing the machines on Amazon.com and on CompUSA's site, dropping the price per copy even further. That's fine for [Lindows CEO] Robertson. He's hoping Lindows consumers will then pony up $99 a year for unlimited downloading at a Lindows site full of Linux software. Among the offerings are Sun's Star Office, which typically sells for $80, and thousands of other Linux titles. Historically it has been hard for all but the geekiest to find, download, and install Linux programs. Robertson's so-called Click & Run Warehouse divides the Linux world into neat shopping aisles with automatic downloads and installs. Robertson won't say how many have anted up for the service but admits that 30,000 customers "isn't that far off the mark."

Writes Brian Proffitt:

- Best Network/Server Application: SuSE Linux OpenExchange Server
- Best Developer Tools: IBM WebSphere Studio Application Developer v5
- Best Data Storage Solution: IBM Tivoli Storage Manager
- Best System Integration Software: Microsoft Services for UNIX 3.0
- Best Security Solution: Computer Associates eTrust Antivirus
- Best Front Office Solution: Ximian Evolution
- Best Productivity Application: HRsmart Applicant Tracking
- Best Cluster Solution: Red Hat Advance Server
- Best Sys Admin Tools: SCO Volution Manager

WSJ reports that Cisco has sued Huawei, "saying the Chinese company copied its software and violated its patents." Huawei has fast become a competitor to Cisco in markets like China (where it is based) with its strategy of providing lower-cost products in the networking space. Adds WSJ:

Founded in 1988 as a maker of telecommunications equipment, Huawei branched into computer-networking gear in recent years and opened offices in the U.S. It is the largest and best-known of the Asian-based competitors challenging Cisco's dominance in the region by offering similar gear at much lower prices. Huawei reported sales last year of $2.7 billion, down 12% from a year earlier.

Huawei's gear is so similar to Cisco's that some analysts have questioned whether the Chinese company had stolen Cisco's technology or developed it independently by "reverse engineering," or examining the guts of Cisco's equipment.

Analysts said the lawsuit may be aimed less at protecting Cisco's sales in China, and more at stymieing Huawei in the rest of the world.

From Business Day:

For months the (South African) State IT Agency had winced at the incessant expense of buying software licences for hundreds of thousands of staff spread across government departments. Now the agency has declared that it will ditch expensive brand name software in many cases and switch to opensource alternatives.

The move should save at least R3bn a year, says agency chief information officer Mojalefa Moseki. The policy should also help to create a new generation of programmers skilled in developing their own applications.

"Government spends close to R3bn a year on software licences alone," says Moseki. With support and upgrade costs added, the total bill was a punishing R9,4bn last year. "Barely a cent of that is spent in SA because all the companies like Microsoft, Sun, IBM and Lotus are multinationals, so the money goes abroad. SA is a consumer of software, but we can develop it ourselves."

From Fast Company. This is what Jeff Taylor, founder and chairman, Monster.com says:

We all need to go into the corn-storage business. By that, I mean developing "silo expertise" in emerging business areas -- such as health care, government, biotechnology, and pharmaceuticals -- that haven't gotten much attention in the past five years. Those are the places where money is still being spent.

We're using that approach at Monster. For example, 71% of federal-government workers will be eligible to retire over the next eight years. My conclusion: I have to figure out how to do business with the U.S. government. So I put employees in a number of different departments who wear a government-solutions name badge. They represent a silo of expertise that's going to help me win that business.

Call them "silos" or "niches," "business units," "communities," or "channels." I like "silo" because it represents a harvest. The market-place in 2003 is more specialized, competitive, and focused. If you want to harvest revenue, then you'll have to get into the silo business. You'll have to build 20 of them, each with a different expertise. Then, depending on the size of your business, you could make $5 million or $300 million in one of those silos and substantially increase your revenue productivity.

What does this mean for each of us? We can't be generalists anymore. If you want to have a chance, you need to be a specialist. Be bold about your industry or niche expertise. If you've been in pharmaceutical sales, trumpet your expertise in the industry, not just your sales skills. You need to become a silo yourself.

From FT in an article which asks if Linux can dethrone Microsoft, the reigining software king:

With hardware and operating systems becoming more standardised, computer makers will have to turn to other areas - the software applications that run on computers and the services and support needed to build complex systems - to generate a profit. While HP leads in the Linux business, claiming the free software drove sales of computer systems worth $2bn last year, IBM is probably the best-placed to benefit from this trend - hence its enthusiastic embrace of Linux. With the world's biggest IT services arm and a software business based on middleware - programs that sit between an operating system and the different software applications - Big Blue has ample incentive to reshape the corporate computing business in its own image.

That model of software development is diametrically opposed to the Microsoft approach and points to the battle to come. By building more features into its operating system directly, Microsoft claims its customers will need to spend less on middleware and integration services to build their corporate networks.

From the Economist on the differences between how the wireless revolution has shaped up in the two countries:

In India, seven years after the launch of mobile-phone services, there are only 10m users. In China half that number —5m—sign up as new subscribers every month.

India chose a licensing policy that divided the country into 22 regions, each with two licences to operate mobile networks. Bidding in multiple regions was restricted. This aimed to promote competition, but led to a fragmented market with a baffling array of operators, none of which achieved economies of scale. Limited spectrum also hurt service quality.

China fostered competition by creating a second state-owned operator, China Unicom, to fight the incumbent, China Mobile. Regulations favoured the upstart. China Unicom was, for example, allowed to undercut China Mobile by 10% in 1999. Prices fell, helping the market to grow. And there was plenty of spectrum.

An Economist Survey:

Far from being over, the computer and telecoms revolution that created the internet has barely begun. These technologies will change almost every aspect of our lives—private, social, cultural, economic and political. In some areas, the changes may be marginal, but in most they will be profound, and unprecedented.

For good or ill

This is because new electronic technologies deal with the very essence of human society: communication between people. Earlier technologies, from printing to the telegraph, have done likewise, and have wrought big changes over time. But the social changes over the coming decades are likely to be much more extensive, and to happen much faster, than any in the past, because the technologies driving them are continuing to develop at a breakneck pace. More importantly, they look as if together they will be as pervasive and ubiquitous as electricity.

For the sake of argument, this survey will assume that we are heading towards a networked society of ubiquitous, mobile communications capable of constant monitoring. Whether this arrives in 20, 30 or 40 years does not really matter. The point is that the destination seems not merely possible, but probable, so it is not too soon to ask: what do we want this technology to do?

The “thick server” that we refer to here can be of two types: it can be a single, new desktop computer with enhanced memory and two hard disks with real-time mirroring of data (“software RAID”), or a collection of clustered desktop machines. Think of these as inexpensive “blade servers” with a network-attached storage. This second solution circumvents the single point of failure problem inherent in the first option, thus offering greater scalability and reliability.

The thick server would contribute about USD 30-50 (Rs 1,500-2,500) to the solution cost – that is, the additional loading on what it would cost to support the 5KPC. In that sense, the solution we have outlined is not a “perfect” 5KPC – the real cost per client is about Rs 6,500-7,500 (USD 130-150).

The final topic that needs to be addressed in the context of the Rs 5,000 PC (5KPC) on the technology side is the software. The 5KPC uses Linux and other open-source software. That is going to be the only way to keep price-points at a rock-bottom level.

Applications run on the server and are displayed on the 5KPC using either a terminal-server application like LTSP (Linux Terminal Server Project, which runs an X server on the client) or vnc (virtual network computer). vnc, created by AT7T Labs, is “a remote display system which allows you to view a computing 'desktop' environment not only on the machine where it is running, but from anywhere on the Internet and from a wide variety of machine architectures.”

The idea of doing processing on the server and sending the keystrokes and mouse clicks from the user and getting the updated screen from the server is not a new idea: running applications on the server over low-speed connections is already being done – Citrix has a solution which works in the Windows world.

The basic set of applications that need to be supported include an email client (Ximian’s Evolution), a desktop productivity suite (OpenOffice), a web browser (Mozilla or its lightweight variants like Phoenix), an instant messaging client (GAIM) which provides interoperability with existing IM clients (AOL, ICQ, MSN and Yahoo), and a PDF reader (Adobe’s Acrobat). All these applications are available for free on Linux.

Summary

So, that’s how the 5KPC can be constructed: either old and recycled computers or new, low-configuration ones, running open-source applications on a Linux base, along with a network connection to a thick server.

The 5KPC is a “bottom-of-the-pyramid” strategy to bridge the digital divide. It targets nonconsumption – making computing available to those who have not able to afford it so far because of the costs of the solution.

Next week, we will consider how the 5KPC can be the centre of the computing ecosystem for the next set of users. There are various market segments which we will discuss – education (schools and colleges), government, small and medium enterprises, bank branches, homes and telecentres. The underlying vision we want to achieve is that “a connected computer accessible to every employee and family”.