ET Story on Software's Rising Prices

There's a story in today's Economic Times by Sangeeta Kulkarni which talks about how "the basic O/S and application software costs, in which Microsoft has an overwhelming market share, have more than doubled during the past couple of years even as entry-level PC prices have stagnated or even fallen."

The story has a mention of the work Netcore is doing on low-cost PCs, and quotes me.

Even as attempts to introduce sub-Rs10,000 PCs by vendors such as H-P and Wipro floundered, some lesser-known local vendors like Via Technology and Netcore Solutions are trying to introduce low-cost PCs.

According to Rajesh Jain, the entrepreneur who sold IndiaWorld to Sify, and who is currently the managing director of Netcore Solutions — a company developing software for low-cost computers — a reduced cost of ownership for PCs would help reduce piracy.

"The legacy of existing operating systems has led to a lack of awareness of an alternative environment for the O/S, and also prevented the need for a low-cost alternative on the desktop."

Netcore is working towards manufacturing computers priced at Rs 5,000 by using recycled computers from developed markets such as the US, which disposes more than 25m PCs every year.

Mr Jain says that there would be firms offering older lower configuration PCs that work better than powerful computers, when used as part of a network. Gartner's country manager Partha Iyengar agrees with Mr Jain when it comes to low awareness for cheaper alternative O/S.

"The O/S cost has been increasing since developers are increasing its functionality with every new release," he says. Linux would not have a significant price impact on the Indian O/S market since it would have to reside on servers before it makes an entry into user desktops, according to Mr Iyengar.

I am not too sure about us "manufacturing computers priced at Rs 5,000"! What we are doing is enabling low-cost / low-configuration computers to be used as networked desktops. But, yes, we will probably look at branding these and selling them as a hardware-software bundle, like what William Gurley mentioned in his Software In A Box article.

I would have liked to see a table with the story which showed hardware and software costs over the past 6-7 years - this is what I had suggested to Sangeeta when she met me. It would have added a lot of weight to the story and the basic premise, which is absolutely right. My guess is that in 1996, computers would have cost about Rs 35-40,000, with the OS (Windows 95) costing about Rs 3,500 (10% of hardware). Today, the computer sells for Rs 25-30,000 with the OS (Windows XP) costing Rs 5-6,000 (20% of hardware). If one adds MS-Office (Rs 15,000), then the software can cost as much as 60-70% of the hardware.

This is the opportunity for Linux, open-source software and Emergic Freedom. The first challenge is to show that the alternative environment is a workable one, and one that does not take away from an individual's productivity. This means creating an increased awareness - most people don't even think of an alternative to Intel-AMD and MS Windows-Office.

I had written a detailed post yesterday discussing the cost savings if organisations used Via's PC Terminals and Emergic Freedom software.

500 Unique Visitors in a Day

A milestone in terms of traffic for this blog - Tuesday (Feb 11) had more than 500 unique visitors for the first time. Total page views were 1826. The home page had 180 page views. So, I guess there's a lot of traffic coming via news aggregators, as this list of the the top 5 referrers shows:

- http://radio.userland.com/newsAggregator (227)
- http://www.google.com/search (112)
- http://ranchero.com/software/netnewswire/ (30)
- http://search.yahoo.com/search (15)
- http://lvb.net/ (11)

University Blogs

David Sifry has an interesting idea. Its something which I had mention to people from academia when I meet them. David captures the essence very well.

Give every faculty member, graduate student, undergraduate, and employee at the university a blog.

If I had a million dollars to give to the university, I'd split it into $10,000 chunks and I'd make them available as grants to the 100 people that posted the most interesting, useful blogs during the school year. Make it a contest.

Imagine that - 100 members of the JHU community blogging daily. Some would talk about their current research, some would write about daily life, some would post poetry and writings, who knows. The conversation would be phenomenal. It would get national and local press. It would open an window to the entire world of the interests, knowledge, and thinkings of 100 of the world's finest professors, students, and administrators in higher education today.

I think it would also start conversations. It would attract students to the school. As Doc likes to say, it would be arson. It would light fires of interest, collaboration, and involvement. Just spending 3 days down here, talking with some of the great people, I got intrigued by all the potential. I saw the stovepiped information pathways, the bureaucracy, and - to a person - everyone railed against it. Here's an idea: Give the university a choir of voices. Make it easy for people to talk, easy to post. Imagine the connections that would happen just by doing a Google search, researchers across the world that could find each other. Throw away that old-fashioned quarterly newsletter, or even better - supplement it with the best of the conversations that these blogs start.

The first university that gets serious about using blogs will create a huge impact in profile, research quality, cooperation, and collaboration both inside and outside of the university. The first one to do it will show its cluefulness. The value to the rest of us would be huge as well. I would bet it would end up increasing alumni giving as well.

Chris Gulker on Blogs

Writes Gulker:

I think Weblogs represent a distinct break in the nature of authorship. The surprise is that there is a large number of people who don't happen to be professional reporters or writers who have a lot to say that is valued by some group. This isn't to say that there is not a lot of crap on the Web and in blogs: there is. It's also not to say that 'blogs are likely to maintain the editorial standards that you see at the Washington Post: the vast majority don't have the resources.

But blogs are enormously valuable, IMHO. They allow thousands (if not hundreds of thousands) of domain experts to converse, debate and discover new and better ways in fields as diverse as software and politics. The very stuff that makes blogs possible, and easy, things like HTML, XML, RSS were largely driven and developed by debates that raged on Web sites and Weblogs. Until we humans evolve telepathy and can find souls with like interests by closing our eyes and thinking warm thoughts, blogs are a good proxy.

In the same way that television went from 3 networks to 500 channels, blogs represent the next evolution: hundreds of thousands of channels are now avaiable, and they've formed themselves into communities that make finding the channels 'just for me' relatively easy.

The other disruptive change here is that prior media forms, from billboards to newspapers to TV, were one-to-many, or broadcast media. The 'ones' were expert writers, reporters, photographers, TV personalities et al., whose only job was to tell the story. The feedback mechanisms, i.e. 'letters to the editor', were feeble.

Blogging is many-to-many: there can be, and often are, as many authors as readers.

Blogging is bringing about a change in people's reading and writing habits. People have opinions, and it is people who shape our thinking. Blogging lets us "connect" with them, even though we may never meet with them. It opens us up to new ideas, and creates a flow of thought through the bloggers' writing spaces that is very difficult to replicate in the physical world. Blogging will evolve, but it is here to stay and thrive.

Software In A Box

William Gurley, a general partner at Benchmark Capital (a VC firm), writes persuasively about the need for integrating hardware when selling software. It is a point of a lot of relevance for us, as we think of the Thin Clients / PC-Terminals. Perhaps, we need to brand the low-cost machines and sell it with the Emergic Freedom software, rather than ask the customer to get it on their own. We could also look at then making a "Thick Server" appliance. Points to ponder!

The hardware is not a proprietary design, but rather a type of packaging. (Think of it as an alternative to a cardboard box.) Combine this availability with the proliferation of Ethernet, TCP/IP, and license-free operating systems such as Linux and BSD, and this allows a company whose primary competitive advantage is software to deliver that software in a box -- a hardware box.

Gurley gives a number of reasons why Software-in-a-box is a good idea: development complexity and quality assurance, performance, Security, provisioning, reliability, stability and customer service, pricing and distribution.

Linux-based IP Phone

From CommWeb: "InnoMedia's MTA 3368 IP VideoPhone has a a large 4" TFT Color LCD for displaying real-time video images. It supports bandwidth as high as 768 kbps. and IP based communications protocols including SIP, MGCP and H.323." [Slashdot thread]

It doesn't come cheap. Estimated price is expected to be USD 1600, according to a post on Slashdot, where people have also suggested cheaper ways to make similar results!

LinuxWorld

Rusell Pavlicek of InfoWorld describes some of what he saw and liked at the recently concluded LinuxWorld in New York:

Clusters seemed to be omnipresent. From IBM to Dell to HP to NEC and many more, various cluster engines littered the show floor. The most groundbreaking of the bunch was the SGI Altix 3000.

In the business server software category, lots of people were discussing products such as Red Hat Advanced Server, SuSE's Openexchange Server, and SCOoffice Server. Red Hat Advanced Server features long release times designed to be attractive to corporate situations and a cluster manager for failover capabilities. SuSE's Openexchange Server provides a solution for corporations seeking to replace Microsoft Exchange with a lower-cost Linux alternative.

In the business desktop category, products such as Red Hat 8 and SuSE Linux Office Desktop drew lots of attention. Even in the show's press room, the PCs were set up to dual boot Red Hat and Windows. Unlike many earlier shows where the PCs were set up for Windows only, I saw a number of journalists successfully using Linux without so much as a comment. And that's the game on the desktop - producing an easy-to-use tool that nontechnical people can use to get their work done.

Among the more interesting solutions at the show was ERP from ABAS Software. A Java-based enterprise resource planning solution, ERP is aimed at bringing big capabilities to small to midsize businesses.

I had visited LinuxWorld in New York in 2002. That is when the idea of using LTSP as a base for low-cost computing solutions struck me, when I saw it in one of the stalls.

Fuel Cells May Power Mobile Devices

Power consumption is one of the biggest challenges of the emerging genre of small, mobile devices. Are they alternatives to the current rechargeable-battery technology? Writes ABCnews:

Companies such as MTI MicroFuel Cells showed off a portable fuel-cell device that could provide power to cell phones and laptops for days and weeks on end.

Neah Power Systems, a fuel-cell technology company in Bothell, Wash., thinks it is on the right path to more portable power.

On Monday, the company unveiled a patent-pending fuel-cell design that could fit within the case of an ordinary laptop computer battery, yet provides two or three times the power. The key to the new fuel cell, the company says, is its unique internal makeup.

Most traditional fuel cells rely on a so-called proton exchange membrane or PEM. Typically made of a flat sheet of precious metal such as platinum, the PEM provides the catalyst that causes hydrogen to give up its electron and produce electricity in the fuel cell.

Instead of a flat PEM, Neah's proposed fuel cell uses a block of material made of "porous silicon." Each microscopic pore of the material contains particles of catalyst that converts the hydrogen into electricity and water.

By "stacking" the reaction through the material's microscopic honeycomb-like maze of pores and tunnels, Neah's CEO David Dorheim says the technology allows for a much higher "energy density."

"The PEM is an old technology where you need very large surface areas to create reactions," says Dorheim. "Our stacked porous silicon allows for the same reactions to occur in a denser and smaller package."

TECH TALK: The Rs 5,000 PC Ecosystem: Bank Branches

Banks, Financial Services companies and Insurance companies (collectively dubbed as BFSI) are among the largest users of technology. Much of their business relies on the electronic movement of information. Also, by the nature of their business, they need to have a distributed physical presence in a lot of neighbourhoods. For example, India’s largest bank, the State Bank of India, has over 9,000 branches, while the largest insurance company, Life Insurance Corporation, has over 2,000 branches. The opportunity for the Rs 5,000 PC lies at these BSFI branches.

Typically, the branches have some form of computerisation, and about 5-10 PCs. In most cases, these will be networked terminals or “thick desktops”, running a proprietary application. The numbers across a single organisation are large. In the case of terminals, the organization would be keen to give a modern GUI-based desktop to the users, so they can use email, a web browser and other applications. In the case of the thick desktops, the challenge comes in the form of both upgradation costs every few years and the incrementally high cost for new users.

This is where the 5KPC can make a big difference. What it does is bring down the single biggest impediment to computerisation: the high cost of hardware. The 5KPC provides for a saving of at least Rs 20,000 (USD 400) per user. Multiply this by a few thousand users, and the savings become enormous.

Each branch can have a 5KPC for every employee, connected to a thick server. The users now get the performance of a new “thick desktop”, the look-and-feel of a Windows-like interface, the full complement of applications (email, browser, IM, Office suite) without the attendant problems of having to upgrade every few years. In addition, support is simplified dramatically because the client computers don’t need any support and the thick servers at the branches can be managed centrally.

The issue that most BFSI installations have is that of running their proprietary applications on a Linux/open-source platform. They typically will have an application written in Visual Basic or Developer 2000 and running on a MS-Windows desktop. The application drives the platform. Rewriting the application is a non-trivial exercise. For the 5KPC to be useful, it needs to be able to support this application. Is this possible? Yes!

There is an open-source software project called Wine. Here’s a brief introduction from its website:

Wine is an implementation of the Windows Win32 and Win16 APIs on top of X and Unix. Think of Wine as a Windows compatibility layer. Wine provides both a development toolkit (Winelib) for porting Windows sources to Unix and a program loader, allowing many unmodified Windows 3.x/95/98/ME/NT/W2K/XP binaries to run under Intel Unixes. Wine works on most popular Intel Unixes, including Linux, FreeBSD and Solaris.

Wine does not require Microsoft Windows, as it is a completely alternative implementation consisting of 100% Microsoft-free code, but it can optionally use native system DLLs if they are available. Wine comes with complete sources, documentation and examples and is freely redistributable.

Wine is the trick to making existing Windows applications work on Linux, and thus the 5KPC. This is not yet a trivial exercise – Wine itself is over a million lines of code, and does not support every Windows application. Some effort will need to be put in to make Wine support the proprietary Windows applications. But the benefits in hardware cost savings are substantial enough to justify this exercise.

[A few other alternatives exist: Crossover Office (a commercial implementation based on Wine), Win4Lin (from NetTraverse) and Windows Terminal Services from Microsoft with rdesktop (which is free) running on the 5KPC. Each of these will entail a per user cost.]

While new applications should be developed to ensure they work on a browser (so they are OS-independent), to make a mark in this sector, the 5KPC solution will need to support an existing legacy of Windows applications on Linux. The sheer volume of opportunity in the BFSI sector makes it a key segment in the 5KPC ecosystem.

Tomorrow: SMEs

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