TECH TALK: SMEs and Technology: The Market Opportunity

Technology has changed a lot over the past decade. And yet, when we look at how small- and medium-sized enterprises (SMEs) use technology, there has been only a limited adoption of the various new technologies. Even as the rate of change in technology accelerates, the pace of usage of these technologies in businesses at the bottom of the pyramid has not increased dramatically. In this series, we will look at how SMEs, especially those in emerging markets, can make better use of the new, emerging technologies and also consider the business opportunities that entrepreneurs can look at in targeting these organisations.

SMEs are seen as the next frontier in new markets for technology. In the recent past, companies from IBM to Microsoft, and HP to Cisco have all announced specialised solutions targeting SMEs. As growth in established markets (the large companies in the developed markets) slows, there is a greater focus on looking at the business and technology needs of SMEs.

And why not? Just look at the numbers. There are estimated to be more than 75 million small and 600,000 medium-sized businesses. (While definitions vary, typically, a small business is one with less than 100 employees, while a medium-sized business is one with 100-1,000 employees.) It is estimated that the market for hardware, software, services and other related IT spend by SMEs is about USD 420 billion. While more than two-thirds of the business are reckoned to have more than one computer, only a fifth of them have a server, according to Microsoft’s Orlando Ayala.

Even among SMEs, there are two clear segments. The SMEs in the developed markets have a greater capability to spend on technology than do the ones in the emerging markets. In fact, if one were to look at the IT maturity levels of companies, even some of the larger companies in the emerging markets would be considered as “IT babies”. So, the potential for improved use of technology is substantial – in fact, one could argue that what we have so seen so far with technology adoption across the value chain has been restricted to the larger companies. The SMEs have been impacted only to a small extent – with usage being primarily driven by email, Internet access, accounting and promotional use of an infrequently-updated website.

At the same time, we are seeing new technological innovations. This raises the question: how can SMEs partake in this revolution? Do SMEs have the ability to leapfrog with these new technologies? How can they make their businesses more productive by leveraging some of the newest ideas?

Our focus in this series will be on the SMEs in the emerging markets – think of them as SMEEMS (Small- and Medium-Enterprises in Emerging MarketS). There is an opportunity to define a new IT reference architecture for this category and create a computing platform out of many “cold technologies” which can dramatically reduce cost of ownership and management. At the same time, there are plenty of opportunities for entrepreneurs in targeting these SMEEMs. Think of this category as the teenagers of the consumer market – growing, aspirational, a greater ability to spend and needing unique solutions.

Tomorrow: Recent Developments

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TECH TALK: SMEs and Technology: Recent Developments

Take a look at some of the recent developments in the context of solutions for small- and medium-sized enterprises (SMEs).

Cisco Systems introduced less-expensive versions of its Internet phone software and services, as the company broadens its push into the small-business market. One of the new products, CallManager Express, costs between $750 and $2,800 and is meant for businesses that have fewer than 100 employees. Cisco also debuted software called Unity Express, which creates voice mail and an automated attendant. The product costs $3,000. Ten system "blueprints" help companies assemble the pieces, the company said. The new Cisco equipment and blueprints are an attempt to interest small businesses in voice over Internet Protocol (VoIP), a cheaper form of dialing that uses the Internet. [News.com, October 2]

Siebel Systems and IBM are unveiling a hosted software product in an effort to grab some of the IT dollars small and midsize businesses are spending. The product, called Siebel CRM OnDemand, is an attempt to sell customer relationship management systems via the Web rather than through traditional software licensing. The companies are hoping that corporate clients in need of CRM applications would rather access applications online than by going through the lengthy process of licensing and deployment. The software will cost $70 a month per customer. Start-ups such as Salesforce.com have reported success in selling similar services and claim to have signed up some of Siebel's customers. Oracle has also touted its outsourcing software as one of its fastest-growing businesses [News.com, October 2]

Microsoft will start selling a simplified bundle of its Windows Server operating system and Microsoft Exchange e-mail software. Ayala said both Microsoft's internal sales force and resellers will have their compensation tied to their ability to sell the bundle, which is called Microsoft Small Business Server 2003. [News.com, October 1]

Dell said its new PowerEdge 400 SC server would come with preinstalled Windows Small Business Server 2003 software and would cost around $1,000.
[News.com, September 22]

Hewlett-Packard plans to pump $750 million into a new "Smart Office" initiative to market its computers, printers and services to small and medium-sized businesses. [InfoWorld, September 18]

Network Associates Inc.'s Sniffer Technologies division last week launched network and security-management tools for small and midsize businesses. The Netasyst Network Analyzer, a stripped-down version of Sniffer's protocol analyzers, supports the most common network topologies those businesses use, including 10/100 Ethernet and 802.11 wireless LANs. [Information Week, September 1]

[South Korea’s small businesses] can buy access to the computer network and basic business-management programs for an average of $15 to $25 per month. More robust software for bigger companies costs $75. The computerization agency has put together customized packages of software for 22 business lines, including real estate brokers, eyeglass shops, beauty parlors, sports clubs, and restaurants. Programs for an additional 36 business types are being developed. [Business Week, August 26]

Internet security firm Check Point is targeting medium-sized companies with a firewall/VPN package designed for organisations with up to 500 employees. Check Point Express includes firewall, VPN, network and application attack protection combined with multi-site, centralised management functions. The package is designed to be easy to purchase, install and manage. [The Register, August 20]

Tomorrow: Recent Developments (continued)

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TECH TALK: SMEs and Technology: Recent Developments (Part 2)

Continuing with some of the technology announcements related to recent small- and medium-sized enterprises (SMEs):

Long an underserved technology market in the past, SMBs (small and midsize businesses) are now seen as important revenue streams for major IT vendors. With the SMB market worth some $300 billion and growing at a significantly faster pace than Fortune 1000s, there are significant revenues to be garnered. In response the big vendors, including IBM, Microsoft, and Sun Microsystems, are retooling enterprise hardware and software offerings to meet SMB needs — delivering low-cost platforms with simple, automated features that bring ease of use and low maintenance requirements. [InfoWorld, August 15]

In an effort to expand its services for small and medium-size businesses, Yahoo is introducing a Web site building tool that will be offered free to the company's Web hosting customers. Yahoo SiteBuilder is just the latest effort by the Sunnyvale, Calif., company to woo smaller business users, which represent a cash cow for the Internet giant. Yahoo already offers business e-mail, domain registration, Web hosting, and e-commerce and marketing services for the sector. Additionally, the company announced last week that it was snapping up commercial search provider Overture to expand its paid listing services. The combination of these offerings are aimed at creating a one-stop shop for small and medium-sized business users to take care of their online needs, said Rich Riley, vice president and general manager of Yahoo's Small Business group… Yahoo reported earlier that its second-quarter revenue jumped 42 percent, partly thanks to the fee-based services it offers to small business users. [InfoWorld, July 21]

France is a good example of the potential for the software giants - there are around 2.9 million companies with less than 500 people in the country - but also the pitfalls. One indication of the potential is a segment like the accounting profession, where more than half of French SMBs have software providers whose share of the market is less than 1%, typically small companies themselves lacking the resources and domestic, let alone international, reach to give them a competitive edge. [Wall Street Journal, July 2]

IBM expanded its efforts to court medium-size businesses--that is, companies with between 100 and 1,000 employees--with its WebSphere software and Global Services offerings, which it generally reserves for larger businesses. Through its Express product development and marketing campaign, Big Blue will deliver a suite of applications, services and hardware designed, priced or packaged specifically for midsize businesses. [News.com, June 25]

In an effort to bolster a stronger level of specificity for its SMB (small to midsize business) clientele, SAP unveiled a quintet of new mySAP All-in-One products this week geared directly toward industry-centric areas. Bringing the total amount of mySAP All-in-One software solutions to 20, Gary Fromer, vice president of SMB at Waldorf, Germany-based SAP, said that he expects that amount to double by the end of 2003. “We have the opportunity to really use this, mostly outside of manufacturing,” said Fromer. “You will see us going into industries SAP maybe never has penetrated before.” Fromer said smaller-size customers are in need of a best practices helping hand, due to lacking the deep pockets of larger companies and unable to afford the dollars or time to install and create a software system to supplant evolving market needs. [InfoWorld, March 6]

These are an indication of the increasing focus. Yet, most of the products and services being launched by the It companies are still too expensive for the SMEs in the emerging companies, which is where the next set of opportunities lie.

Tomorrow: Characteristics

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TECH TALK: SMEs and Technology: Characteristics

Before we get to discussing how the new technologies can help the small- and medium-enterprises in emerging markets (SMEEMS) become more productive, let us discuss the characteristics of these organisations. They are the third tier of the enterprise pyramid, behind the large companies and the SMEs in the developed markets, from whom they are quite different.

SMEs are not very IT-focused. For many, IT is an after-thought. Part of the reason is that these enterprises do not necessarily have a dedicated IT department. Most of the decisions are made by the owner-managers or the finance people. As such, the use of IT is limited largely to some of the four basic needs – email, productivity applications (word processor and spreadsheet), accounting and a website.

SMEs are hard to reach. They are small and distributed. While it is easy to get to the large companies (and for the large companies to get to the IT vendors), SMEs are a hard market to crack.

SMEs tend to still follow processes which are largely non-electronic. Because the organizations are small, the business knowledge is more tacit than in digital form. People, especially the senior management, “know” what is happening (and all that needs to be known). This also concentrates decision-making. So, IT’s role needs to be to assist in this decision-making process.

SMEs need more hand-holding and support, and thus can be very demanding customers. This is because they may not necessarily have trained in-house IT staff. At the same time, their ability to pay is quite limited. Hence, as customers, they have been an unattractive market for the IT vendors.

The most important issue facing SMEs is business growth. They have a fairly close tab of the expenses, so there is little room for optimisation there. The challenge is to generate new business, and manage that new business with the same (or incremental) staff so as to maximise profitability.

It is not easy for SMEs to educate themselves about new technologies and the impact they can have on their business. While there are all kinds of training institutions for computer languages and software packages, the one segment that still has been addressed on the training side is the business applications of technologies.

SMEEMS are further characterised by an even lower ability to spend. They typically need solutions which are a fraction of the cost of what has been available so far. In the case of hardware (computers), SMEEMS have a low PC penetration. On the software front, piracy and non-consumption are the two extreme options available for them. In fact, for most SMEEMS, the cost of software is zero.

Even though technology has evolved a lot in the past few years, the IT infrastructure within SMEs has changed little. While historically, SME technology adoption has lagged that of big business by 3-5 years, this slowness in usage also needs to be understood in the context of the twin traps that most SMEs are caught in: a technology trap, and a marketing trap.

Tomorrow: The Twin Traps

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TECH TALK: SMEs and Technology: The Twin Traps

SMEs in emerging markets (SMEEMS) are caught in two traps: a technology trap and a marketing trap.

Here is how the technology trap works. SMEEMS spend little on technology. Therefore, they tend to not be able to use the most optimum solutions for much of their business. Personal, group and enterprise productivity is not able to benefit fully from the use of IT solutions. Hence, their growth tends to be slower. As a result, they are also unable to invest in the new technology solutions which could help put them on the fast track.

The technology trap hurts SMEEMS in another way. An application like messaging rarely works well if only a few people in the organization use it. And yet, that is precisely what happens because computers are either shared or not available to everyone in the enterprise. The result is that even the few applications used are not very effective. So, even the technology used is sub-optimal.

For SMEEMS to break out of the technology trap, the goal should be to make a connected computer available to every employee in the enterprise. For this to happen,
they need cost-effective, whole solutions which can show quick return on investments. For example, if computing (hardware and software) and Internet connectivity could be provided at a cost of Rs 700 (USD 15) per employee per month, then it may be easier for the SMEEMS to justify the investment with the reasoning that even if the productivity of their staff goes up by no more than 10% (assuming minimum salaries of Rs 7,000), then the payback is immediate.

The marketing trap comes about because SMEEMs spend limited money on marketing (ads, PR, branding) which limits their reach to potential buyers which in turn limits their new business opportunities. The products and solutions are there, what is missing is the knowledge of who it can be useful (the prospects). The options are few - build a direct sales team or set up a channel. And then, perhaps back it up with some advertising - which is very expensive. Of course, if there was enough business being generated due to the ads, it would be another story, but in most cases, that does not happen because SMEEMS typically do not indulge in repeated advertising. The result: SMEEMS face limited growth because few prospective buyers know about their solutions.

This then is the challenge before us: how can the new innovations and technologies that are being created be applied to SMEEMS to get them out of their technology and marketing traps, and on the growth path. This is at the heart of where I believe the next opportunities in technology lie. The SMEEMS comprise the “invisible market” of technology – not only are they SMEs, but they are in located in the world’s emerging markets, far away from the rich markets of US, Western Europe and Japan.

Next week, we shall see how new technologies can help create an alternative technology and marketing platform for SMEEMS.

Next Week: SMEs and Technology (continued)

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TECH TALK: SMEs and Technology: New Technologies and Trends

The pace of change in technology continues. Every week brings with it new announcements about innovations – some are incremental, others are disruptive. Even though now companies are more cautious about adopting the “next new thing”, the fact remains that technology can bring about gains in productivity and market share if used intelligently. Consider Dell, for example. In a market as commoditised as personal computers, it now aspires to have a share of 30-40% in a few years, more than double what it is now. This is driven by its supply chain and distribution expertise. Remember: even Dell was a small company once.

What is interesting about technology has been its commoditisation. John Sculley, who once ran Apple and now is a venture capitalist, summarises this trend: “We're going through a systemic, secular change in high technology. We saw, in the 1990s, the commoditization of hardware. Now, we're going to be seeing the commoditization of almost everything, including software and services. This makes a lot of sense because, as the technology world moves from being computer-intensive to communications-intensive, you have to have open standards, which means innovation is going to have to take place in different parts of the value chain. The things that we used to think of as the areas for ‘wow’ technology, like computers, have become commoditized and even transparent, as they are embedded into systems. The innovation now is taking place with things that are largely being driven by market opportunities and customers.”

This commoditisation has the promise of making technology affordable for small- and medium-sized enterprises (SMEs). It is also making technology vendors start looking at the SMEs as a market opportunity. In addition, it creates new business opportunities for SMEs as various industries will get disrupted with these emerging, new technologies. Wrote Business Week recently: “Simply put, tech hasn't settled down yet. Its days of maturity may be decades away. The IT revolution may share many parallels with previous transformative technologies such as railroads and electricity, but it differs in one key way: The underlying technologies not only aren't slowing down, they're accelerating. Computer-chip performance keeps doubling every 18 months, and disk-drive capacity and Internet-connection speeds are improving even faster. That's spurring new products, from MP3 and DVD players to Web services for corporations, that are disrupting industries from entertainment to health care.”

For SMEs, it is important to consider the new, emerging technologies to see how these can be applied appropriately to cut costs and improve topline growth. There is no one, magic formula which will fit every SME. Yet, it is possible to extract out certain common technologies which can make a significant impact on operations, and help SMEs break out of the twin technology and marketing traps.

We will begin by considering some of these technologies and trends, and later see how they can be aggregated together to create a reference technology architecture for SMEs. Having a common architecture makes not just the buying decision easier for SMEs, but also enables vendors to create plug-and-play standardised components.

Tomorrow: New Technologies and Trends (continued)

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TECH TALK: SMEs and Technology: New Technologies and Trends (Part 2)

1. Computers: It may seem very obvious that computers are an important business tool, but in most small- and medium-sized enterprises (SMEs) in emerging markets, the penetration of PCs is no more than 10-20%. This is because of the investment needed for a PC. The result: a device as fundamental as a computer is being used by very few SMEs for real productivity applications. What is needed is for the cost of computers to come down so that there can be a computer for every employee – only then will SMEs begin to rethink their business processes and achieve major leaps in productivity. Two ideas to bring down total cost of ownership are: server-centric computing (all processing and storage happens on the server, which can be a high-end desktop for smaller businesses), and low-cost, low-configuration thin clients for users (which also simplifies management). Either way, having a computer on every desk is the first step that an enterprise needs to take to begin benefiting from technology.

2. Internet: Connectivity to the Internet is another fundamental building block for the SME. The Internet is not just an information resource, but can be a powerful marketing tool. Every individual in the company must have Internet access. Being able to visit websites of potential customers, partners and competitors bridges the information divide. Getting access to industry directories and niche publications helps make people abreast of all the new developments. Search engines can be good, cost-effective marketing platforms. In other words, the Internet with the computer creates “connected employees” – not just to each other, but to the outside world.

3. Open-Source Software: Software is the engine that drives the computers and makes them useful. For long, software had just three difficult options: paying a lot of money for the applications (since most pricing is dollar-denominated), piracy or non-consumption. Now, open-source software now creates a fourth option: affordable solutions. Open-source software is a godsend for SMEs, especially those in emerging markets. For almost every component in the stack of applications that businesses need – right from desktop productivity applications and messaging servers to accounting and CRM applications, there are equivalent open-source applications which are more than good enough for business use.

4. Broadband: High-speed connectivity to the Internet and across an enterprise’s offices is very critical for business. It takes away some of the friction of doing business. Broadband is the solution to the connectivity woes that bedevil most SMEs in emerging enterprises. Bandwidth in India is about 50 times more expensive than the US. Poor connectivity hinders the use of new technologies for effective business. Countries need to learn from South Korea, where a government initiative has seen affordable, broadband connectivity made available to small businesses, along with specialised, hosted applications relevant for different verticals.

Tomorrow: New Technologies and Trends (continued)

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TECH TALK: SMEs and Technology: New Technologies and Trends (Part 3)

5. Wireless: Perhaps, the biggest visible technology revolution is happening with the proliferation of wireless networks. GSM and CDMA networks are making cellphones available to millions who were previously deprived of telecom services. Across countries like China and India, millions of new users get connected every month. WiFi promises to be next revolution, creating an envelope of hotspots which can be used for both voice and data services. SMS (Short Message Service) has been the surprise communications hit of the past few years. While so far it has been used mainly for person-to-person interactions, its use for employee-to-server interactions can create the foundation for real-time enterprises, as it has the potential to bridge the information gap. Event notifications can be provided instantaneously to people anywhere. In the coming years, cellphones will evolve into smartphones – capable of providing voice, data and video services over ubiquitous wireless networks.

6. Instant Messaging: The other communications revolution is happening on the computer – in the form of instant messaging. These short, sharp, chatty exchanges are providing an effective alternate to spam- and virus-ridden email. From connecting employees in real-time across locations to allowing enterprises to offer customer support, IM has, almost like SMS, made its way with its own vocabulary into mainstream consciousness. The new releases of the instant messengers also support video via webcams.

7. VoIP: The Internet as backbone now provides the perfect platform to carry voice. Voice-over-IP is the next big disruptive force in the world of telecom. A recently launched serviced called Skype connects people with real-time, landline-like quality via the Internet. Even before Skype launched, voice-over-IP has been used to dramatically slash cost of communications. The other thing to watch out for is voice-over-WiFi. Dartmouth College is already providing such a service to students across the campus. For SMEs, the benefits are near-zero cost of telecom and pervasive connectivity.

8. Google: No other service has become as useful in daily life as Google. With its promise to find accurately anything out on the Internet, it has become the first stop for finding information – about people, businesses and any other topics. In fact, search engines, which for many were the first stop in the early days of the Net, are once again coming to the fore. For small- and medium-sized enterprises (SMEs), Google also offers the promise of cost-effective advertising. It is the small advertisers paying a few cents per clickthrough which have propelled Google to nearly a billion dollars in revenue in a short period of time.

9. Social Software: The next information revolution will be centred around the “information refinery”, powered by RSS (Rich Site Summary), an XML format for syndicating microcontent. Weblogs and Wikis are the unlikely partners in this emerging category of social software – applications which help people work better in groups. In fact, personal and group knowledge management are increasingly becoming critical aspects in the real-time enterprise. The differentiation across organizations is likely to come less from their physical plant and machinery and more from their information plants and refineries.

Tomorrow: New Technologies and Trends (continued)

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TECH TALK: SMEs and Technology: New Technologies and Trends (Part 4)

10. Web Services: Software as building blocks – just like Lego – which can be assembled together for mirroring business processes: this is the promise of web services. Integrating disparate enterprise applications and their information bases is one of the big challenges in the modern enterprise. Even though small- and medium-sized enterprises (SMEs) may not be directly impacted by web services, they have the opportunity to use applications which use web services to get past the application and information integration issues that require the bigger enterprises to spend huge amounts of money on consultants and patchwork software.

11. Business Process Automation: The enterprise is increasingly being viewed as less a cluster of functional departments and more as a collection of business processes. This is giving rise to business process management and automation software, and standards like ebXML and RosettaNet which promise to simplify information exchange between enterprises.

12. RFIDs: Radio Frequency Identification is now coming to the fore. These miniature electronic tags have fallen in cost enough to make businesses consider using them in products to track them digitally. RFIDs can change the way retail business is done. For SMEs, the potential is that RFIDs can make for efficient supply chains with reduced inventory levels and less capital being wasted because of lack of information. Wal-mart’s recent decision to get it suppliers to start using RFIDs has given a big boost to this nascent technology.

13. Utility Computing: There are various names being used to define the promise of computer power and applications delivered on a need-basis over the Internet: grid or utility computing, on-demand computing, adaptive enterprise. The promise is the same: organizations do not need to invest in and manage their own technology infrastructure, and can rent out the IT they need on a pay-per-use basis from utility providers just like they do for their electricity and telecom needs. The first utility providers are already there in the form of the hosted application service providers (ASPs) like Salesforce.com and NetSuite.

14. Social Networking Sites: This is an interesting trend that has come to the fore recently – with sites like Friendster, Ryze, LinkedIn and Tribe.net. While dating and job-hunting drive these social connectivity sites, it is not hard to imagine that electronic information marketplaces can help connect SMEs to other SMEs, just as they do with individuals now.

This new world of technology holds promise and pitfalls for SMEs. The promise is that SMEs can now adopt many of the same technologies that the “big boys” have used for long, to improve their business processes and productivity. The pitfall is that, unlike the larger companies, SMEs are largely on their own as they make the technology decisions on what to deploy. This is where there is a need for defining a reference IT architecture for SMEs to simplify their decision-making. This IT architecture should provide a framework for hardware, software, connectivity and support decisions, products and services for SMEs. The SME IT value chain is in for a upheaval. Affordability, Utility and Standardisation will be the defining watchwords for their solutions.

Tomorrow: The Need for Reference Architectures

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TECH TALK: SMEs and Technology: The Need for Reference Architectures

Consider a recent marketing leaflet by Intel and its partners targeted at small enterprises. It exhorts small- and medium-sized enterprises (SMEs) to buy a PC to increase their business. What are the specifications of the “business-performance PC”? Here is what the ad says: “Intel Pentium 4 Processor 2.4 Ghz, Intel D845 GVAD2 Motherboard, 128 MB DDR RAM, 40 GB HDD, 15-inch colour monitor, ATX Cabinet, Mouse, Keyboard, 52X CD ROM Drive, LAN Card, Windows XP with CD”.

Read the ad again and consider how an SME is expected to (a) understand the flurry of acronyms used (b) use the PC for business? In the first case, SMEs are expected to either master a whole new vocabulary (GVAD2, DDR, ATX…). In the second case, there are no applications on the PC – by itself, Windows XP can do a few things but not enough to make it usable for business out-of-the-box. The result: SMEs get caught in needless decisions comprising technicalities within a computer which are not necessarily germane for its end-use.

The focus instead needs to be on what SMEs can be do with technology, not confusing them with three- and four-letter words they will not even find in a dictionary! This is one of the motivations for putting together a reference architectures for SMEs. It can clearly specify what SMEs need – in terms of the hardware, software stack, connectivity solutions and so on. It should be able to bring the discussion to what SMEs want to accomplish, rather than saddling them with expensive solutions that they may not necessarily need (or know what to do with). So, the reference architecture can help simplify the decision-making process for SMEs.

In addition, it can also ease the selling process to SMEs. Vendors can now focus on how they can provide a whole solution, rather than just selling the parts and having the SMEs assemble their own infrastructure. After all, SMEs want to buy the IT-equivalent of cars, and not check off a laundry list of steering wheels, gear boxes, piston rings, tyres, headlights and the like. Vendors should have the responsibility of putting together the complete solution for their SME customers. Having a reference architecture for them to work with makes it easier for them to do the integration.

The reference architecture also makes it better for the component developers. They can decide which layer they want to focus on, and be the best in that particular segment. For example, in software, we have developers trying to build it all by themselves, rather than using existing components and value-adding on or around them. This will make for more comprehensive SME solutions, broadening and deepening the market. Online directories can help assemblers aggregate the right solutions from different markets.

In many ways, the computer industry needs to start becoming like the auto industry in terms of standardisation. Coupled with the commoditisation of technology which can now provide for affordable solutions, business models which provide these solutions with utility-like pay-per-use payment options, modular and expandable platforms and solutions which can be remotely managed, we will have the fundamental building blocks for creating a complete ecosystem of solution providers for SMEs. This is what is needed to open up the global market of over 75 million SMEs, and create a wide variety of entrepreneurial opportunities.

Next Week: SME IT Reference Architectures

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TECH TALK: SMEs and Technology: Client Architecture

The reference hardware architecture for small- and medium-sized enterprises (SMEs) needs to ensure that even as the total cost of ownership is kept low, there is no compromise in performance. By making computers affordable, it will become possible for SMEs to provide one to every employee in the organisation. This ubiquitous presence of the computer will create the platform for the software applications to revamp existing business processes and make the enterprise as a whole more productive.

The two fundamental components for the hardware architecture are thin clients and thick servers. The thin clients are low-cost, low-configuration computers. It should be possible to create these for about USD 50 (Rs 2,250). Add to that a refurbished monitor for USD 40, and keyboard and mouse for USD 10, and one has a USD 100 desktop solution.

How will the USD 50 base unit become possible? This “virtual computer” needs to be only able to work as a “dumb terminal”, though fully capable of displaying the graphics that one sees as part of existing desktops (in Windows and Linux). It needs to have a processor of about 100 Mhz, 2 MB RAM, a couple of USB ports for the keyboard and mouse, LAN support (either for 100 Mbps Ethernet or WiFi) and should be capable of driving a monitor/display unit.

Traditionally, thin clients have been used in companies for reducing cost of administration, rather than the cost of the actual solution itself (if one takes into account the software costs of solutions like Citrix). This is what is different about the approach being presented here: we want to create architectures which can bring down costs across the board – of hardware, software and management. In other words, we do want the best of all worlds!

There are many options to build such a thin client: a 486-class motherboards, existing PDA or cellphone architectures, set-top box designs or even game console units. The point is that there is a need for a solution which does the bare bones processing only, shifting the entire load on the server. The key is the cost for such a unit – only at these low price points will it be possible to achieve a 1:1 employee:computer ratio in the SMEs.

The closest we can get to these solution today is through the use of older (second-hand) computers which are available for about USD 75-150. Here, the issue in India is the anti-dumping duty which adds USD 200 to the price. But in other countries, this could work fine. One problem with this is the lack of consistency in the configurations of the older computers, and the shipping costs. An alternative solution is through the use of VIA’s mini-ITX motherboard. A computer built using VIA’s board with a new monitor would cost about Rs 11,500 (USD 250). Using an older monitor would bring the cost down to about Rs 9,000 (USD 200). We need a solution at half this price point for mass-market consumption.

It needs an enterprising group of people to put a solution for a thin client in place. This is a very interesting opportunity – we are unlikely to see the likes of Intel and AMD target this market, because of the fear that this could disrupt their primary CPU brands. The thin client segment needs a disruptive innovation to target the non-consumers of computers.

Tomorrow: Server Architecture

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TECH TALK: SMEs and Technology: Server Architecture

The thin clients shift the onus of processing and storage to the server. Luckily, the relentless advances in computing driven by Moore’s Law means that we can leverage this dramatic increase in computational capabilities on the server by using the newest desktops as servers in enterprises. While Intel and AMD have distinct desktop and server brands, in the context of small- and medium-sized enterprises (SMEs), that distinction is not as meaningful any more.

The thick server which resides on the enterprise network should be capable of handling all the computing activities. There are two ways to size the server, given the size of the organisation: one is to go in for a single server which has the higher-end CPUs (like the Intel Xeons), while the other is to scale horizontally and go in for multiple desktops in a server cluster.

Many of the smaller companies would only need a single server, so it does not matter. But for the mid-sized companies, the second choice may be a better approach, because if offers greater reliability (no single point of failure – which can be a justified criticism for a server-centric computing solution) and scalability (just add another computer as the user needs increase).

For the local networking, there are two possibilities: the use of WiFi within the organization or doing cabling. WiFi would be a preferred option because it reduces the installation time – cabling can be a cumbersome process.

The software on the server comprises of four layers: the operating system (typically Linux), a distributed file system (in the case of multiple computers working together), terminal services (to provide support for the thin clients) and the applications. All the software needed to make the thick server a reality exists in open-source today. What has not happened is the complete and seamless integration of these applications to make for an integrated system.

The cost of such a thick server would vary from about Rs 25,000 (USD 550) for the minimum configuration for a small organisation (of 5-7 users), and go up to Rs 150,000 (USD 3,300) for a 50-person organisation. A good assumption is that it will cost Rs 5,000 (USD 110) per user in server costs for a small business, with the cost going down to Rs 3,000 (USD 65) per user for larger enterprises.

The two big advantages of this thin client-thick server architecture are that the clients never ever need to be upgraded, and management of the IT setup boils down to management of the servers only. If the network connectivity is present, the servers can in fact be managed remotely, eliminating the need for trained engineers to be located onsite, which is always an expensive proposition from the SME viewpoint. This architecture also benefits from the continuing commoditisation of IT hardware – it should be possible to get at least 50% greater processing power and storage a year down the line for the same investment.

Thus, it is possible to put together a complete hardware solution (desktop thin client and server) which costs no more than Rs 10,000 per person in upfront investments. This is a 60-75% reduction from today’s costs, and forms the first foundation for the SME IT architecture.

Tomorrow: Systems Software Architecture

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TECH TALK: SMEs and Technology: Systems Software Architecture: Messaging and Security

As we discussed, the server software stack consists of the operating system, a distributed file system and terminal services. On the applications side, there are three layers of systems applications: messaging and security, identity management, and desktop computing.

The messaging and security layer consists of a Mail Server, Instant Messaging Server, Proxy Server, Firewall, Anti-Virus, Anti-Spam, VPN Support. The identity management layer provides support for the access control layer for user administration. The desktop computing layer provides support for file and print services, and the various desktop applications that the thin client users need to run. Let us start by looking at the messaging and security applications.

The Mail Server ensures that emails are available locally via IMAP accounts for users. If the enterprise has dedicated connectivity to the Internet, the same mailbox can also be accessed from the outside, thus providing a single store for mails. The mail server also ensures that users have their own, personalised email IDs of the form name@companyName.com. Every person should be given access to email in the organization – email is something that does not work if half the people in the organisation have it, and the other half does not. It is the most basic of applications that needs to be used by everyone in the organization. Over time, email will become the organisation’s lifeline for conducting business, hence it is a mission critical application and needs to be treated as such.

The Instant Messaging Server provides a local platform for chat. They are the equivalent of Yahoo and Hotmail’s Messenger services with the difference being that there is no need to connect to the Internet to chat with others on the same network. Jabber provides an excellent platform for IM services.

The Proxy Server ensures that multiple users can use the same Internet connection for browsing. A caching capability can speed up browsing by keeping a local copy of frequently accessed content. This is important because bandwidth in most emerging markets is still very expensive. The Firewall secures the enterprise, preventing unauthorised intrusions. It is a mandatory requirement for businesses now, given the automated programs which look for vulnerabilities on machines connected to the Net.

Viruses and spam are the scourge of today’s email communications. The Anti-Virus software scans all incoming and outgoing email for viruses. Since most viruses come via email, this is a significant step in ensuring a virus-free operating environment. The Anti-Spam software marks spam as it comes in, thus ensuring a cleaner mailbox. Together, these two applications ensure that the small- and medium-sized enterprise (SME) does not have to worry about viruses destroying critical files and spam reducing productivity.

VPN stands for Virtual Private Network. It provides for a LAN-like single network environment between different offices. This way, users can share files and communicate much more easily with others, even though they may be in different geographical locations.

Taken together, these applications provide the complete infrastructure for communications and connectivity in a secure environment.

Tomorrow: Systems Software Architecture (continued)

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TECH TALK: SMEs and Technology: Systems Software Architecture: Identity Management

Identify Management is an often-ignored software component. For most users, it manifests as a directory services application in the form of a global address book, where a common address book on the server can be made available on each user’s email client, via the LDAP protocol. But identity management is much more. Esther Dyson, writing in Release 1.0 (June 2002) provides the context and components of identity management:

Virtually every application in the future will make use of identity information, but there are some specific areas that will lead in its development and use. Of course, what can be managed is not the ineffable “identity” of a person, but all the relationships with and data about that individual – the profile. Identity-based functions include authentication, authorization, security and access. Those functions support applications such as billing and payment, direct marketing and CRM, provisioning, roaming (basically, remote provisioning), presence management, workflow, and knowledge management (especially as managers start to realize that most knowledge is in people’s heads, not in databases).

The essence of identity management is defining people and things as classes or groups, to which you can apply policies or draw conclusions. Identity management crosses contexts and reduces complexity by finding the common elements across individuals so that they can be handled on the basis of policies rather than one by one… yet treated as individuals if they happen to call a help desk, check in at a hotel, ask for a particular set of data or make a phone call from a cell phone in a foreign country using a third-party wireless carrier. They want responses in their own language, tailored to their own history and preferences.

Identity management, broadly defined, includes a data store (the directory or meta-directory), and a variety of processes that populate it, update it, and rely on its information to derive roles and control (access to) other system resources – everything from plain old access through a firewall to discrete permission ("authorization") to use a specific application function on a specific set of data at a specific time of day. Many of these components can be either bound together or, increasingly, teased apart. Role information and access rules can be kept in the directory, or they can be separated out into an authorization or control layer.

At its simplest, identify management ensures a single sign-on to all applications – the same user name and password will work across all the applications, and provide access rights based on the user’s profile. This is very important because it is impractical to expect users to keep remembering different login names and passwords for the various applications that they need to access. Not using an identify management layer will either result in lax security or in lesser use of the applications, both of which are undesirable.

So far, little attention has been paid to identify management in the context of SMEs. In part, this has been because most SMEs are consuming very few business applications. As the usage increases, it will become increasingly important to have identity management which has a directory to manage authorisation and authentication of users. This will necessarily mean that even the applications used will need to interface with this identity management layer rather than having their own independent login-password database.

Tomorrow: Systems Software Architecture (continued)

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TECH TALK: SMEs and Technology: Systems Software Architecture: Desktop Computing

The desktop computing layer provides support for file and print services, and the various desktop applications that the thin client users need to run. Centralising file and print services helps in optimal resource utilization. For example, users no longer have to store files on local hard disks, and worry about how they will be backed up. Printers no longer have to be attached to specific users – they become shared resources on the network.

In the small- and medium-sized enterprise (SME), each user should be given a home area where the user can securely store the documents. No other user should be allowed access to this area. Users should also be allowed to create shared areas, where they can easily share files with others. In addition, the file server (which is likely to be on the Linux OS) should also have compatibility with the Windows environment, thus providing for seamless co-existence.

The user’s home area should also be backed up automatically every day to ensure that there is no loss of data. Most SMEs tend to be lax about taking backups, and only realise the folly of their attitude when they lose critical files because of an accidental deletion or disk crash. In fact, SMEs should not even have to worry about taking backups – this process needs to be automated. Incremental backups should also be stored offline – perhaps, on the Internet.

Printing, along with email and documentation, is a core function in the organization, and needs to be simplified. The print server allows sharing of printers across users and networks. It also allows users to manage their print jobs. In addition, some organisations may also want a fax server, though the use of fax is reducing with the growing popularity of email. In that event, it should be possible to send faxes from the desktop itself through the use of a fax server.

On the desktop applications front, there are a set of seven key applications that every user needs: an email client (along with a personal information manager), a web browser, an instant messaging client, a word processor, a spreadsheet, a presentation application and a PDF reader. On Linux, the combination of Evolution, Mozilla, GAIM, OpenOffice and Adobe Acrobat provide the complete set of applications for most users. OpenOffice offers the ability to read and write MS-Office file formats, which is very critical since inter-operability with the Windows world is a must.

All of these applications will run on the thick server. This also ensures that the applications need to be updated with the new versions only on the server machines, rather than on every desktop. All user desktops on the thin client can be completely controlled from the server, thus once again simplifying the management of the IT systems.

All the applications that have been mentioned as part of the systems software architecture are available for free on the Linux platform. Again, they have not been aggregated together as part of a single solution in an easy-to-use manner. When that is done, the base software costs can come down by 90% or more as compared to the Windows-Office combination.

Thus, the core IT architecture for SMEs comprising of thin clients, thick servers, Linux and a collection of open-source applications can be put together for as little as Rs 12,500 (USD 275) - assuming the software applications with support are offered for Rs 2,500. Now, imagine if the service provider can charge Rs 500 (USD 11) per person per month for the hardware, networking, software and management. Over a 3-year period, the money available is Rs 18,000, versus a cost that will probably not exceed Rs 15,000 (including initial financing costs for the hardware).

This then is the opportunity for entrepreneurs – to create SME Tech Utilities, and foster mass adoption of technology by the 75 million SMEs worldwide, setting the foundation for creating applications for automating the core business processes.

Next Week: SME IT Reference Architectures (continued)

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TECH TALK: SMEs and Technology: Information Management Architecture

Previously, we have discussed the reference architectures for thin client, thick server and systems software (including messaging and security, identity management and desktop computing). We continue the journey by looking at the other applications that small- and medium-sized enterprises (SMEs) need: the information management and business applications layers.

The information divide is perhaps one of the most important factors for inefficiencies within SMEs. Whatever be the kind of information, getting it to the right person at the right time to support effective decision-making is very important. In most SMEs, the information in most cases may be missing – it may be with a person may not be available, it may be in an email that is not immediately accessible, or it may just not have been captured electronically. SMEs too need to focus on becoming intelligent, real-time enterprises, and this is where the layer of information management applications is critical.

Bridging the information divide and putting the information plant in place is as important as setting up the manufacturing plant; in fact, it is the information plant which will provide the platform for sustainable competitive advantage.

The various components that make up this layer are: the Database, an Events Manager, RSS Aggregator, Personal Knowledge Manager, Group Knowledge Manager, Digital Dashboard and Microcontent Client. Taken together, they make up the “information refinery” for the SME.

The Database provides the repository of all information. There should be one integrated storehouse for all information. Even the business applications should use a single, common database. If this is not done, then the result will be information silos, and the need for multiple updates and copies of the same information. This must be avoided. The driving principle should be: only handle information once.

The Events Manager enables alerts and notifications based on information in the database, independent of the application which has updated the information. Users can define the queries that need to be run periodically on the database, and the output can be an event stream which can be sent to the user either by email, SMS (Short Message Service, on the cellphone) or via RSS (Rich Site Summary, an XML format for syndication).

The RSS Aggregator provides an RSS-to-IMAP service. It allows users to set up and manage subscriptions to RSS feeds. These RSS feeds can be from within the enterprise (created by the Events Manager) or those produced from external sources (like weblogs and news sites, as is happening already). The RSS Aggregator polls the various feeds periodically. Alternately, the feed providers can “ping” a web service whenever they are updated. Either way, it aggregates the RSS feeds, splits the feed into individual events and delivers them as email to IMAP mailboxes for the various users. The use of the IMAP mailbox allows users to read the feed items as part of their email client, and get a single, synchronised view of the mailbox from mail clients on different machines (at work and home, for example).

Tomorrow: Information Management Architecture (continued)

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TECH TALK: SMEs and Technology: Information Management Architecture (Part 2)

The Personal Knowledge Manager (PKM) is a sort of Memex, a memory extension, as envisioned by Vannevar Bush. This tool helps users to build and manage their personal knowledge base. It is an individual’s views of the world, formed by the user’s associations. The basic goal of the PKM is to retain and return stored information. At its simplest, it is a directory-cum-outliner, constructed using the OPML (Outline Processor Markup Language), which can allow for transclusion (in-place viewing) of similar, other Memex constructs.

The Group Knowledge Manager (GKM) captures and amplifies knowledge across teams. It is a collaboration platform. The GKM belongs to a category of software that is growing in importance of late – social software. The goal of social software is help groups work better. Every organization – small or big – has many groups – some are formally set up (for example, marketing, engineering) while others can be informal (for example, organised by communities of practice). The objective of the GKM is to help these groups store and manage information that is of relevance for all of them. The only tool available today is email, and that does not work effectively across groups. Weblogs and Wikis can serve as the foundation for creating GKMs.

The Digital Dashboard provides an integrated view of all the information that a user would like to see – on s single screen. Think of the Dashboard as having three areas – a scratchpad writing area for making quite notes, a events viewer which shows a filtered view from all the event streams that the user has subscribed to, and a links area, which has shortcuts to various applications and recently used documents. In addition, there is a search box, with three options to search the user’s own information space on the server, search the user’s writings on various blogs (public, group and private) and search Google.

The Microcontent Client provides real-time event updates to the user. This client will typically be part of a user’s smartphone. It will connect to the user’s IMAP mailboxes – that which gets the email, and the other created by the Info Aggregator. Taken together, they provide the user with the complete view of the personal, enterprise and external worlds. In addition, the microcontent client should also have the ability to accept content (text or multimedia) which can be posted on to a blog specified by the user. The new generation of cellphones already have cameras in-built. With better keyboards, they will become full-fledged two-way mobile multimedia centres.

Thus, these set of seven applications make up the information refinery. It will be possible to manage any kind of information – text, image, audio or video – through this pipeline. This is the platform that the small- and medium-sized enterprises (SMEs) need to manage the information that they come across and create. In the past, these systems have been expensive or hard to put together. Now, the components and standards for putting these systems in place already exist. This is the foundation of the Active (Publish-Subscribe) Web.

Tomorrow: Business Applications Architecture

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TECH TALK: SMEs and Technology: Business Applications Architecture

The business applications layer consists of various components to describe and manage the processes within the small- and medium-sized enterprises (SMEs). Sandwiched between the Database and the user interface (via the Digital Dashboard or the Microcontent Client) are the Application Server, Visual Biz-ic and the specialised objects that represent the business functions.

The Application Server has become part of the e-Business infrastructure. In the open-source world, there is JBoss. Among the proprietary solutions, there is IBM’s Websphere, BEA’s Weblogic, Oracle’s Application Server and Indian company Pramati’s product.

The database and the application server provide the foundation for business process management (BPM). William Gurley provides the wider perspective:

BPM is a new programming paradigm for the enterprise that leverages browser-based applications, e-mail, global connectivity and enterprise application integration (EAI) infrastructure to deliver a powerful, business-focused programming solution. A mix between workflow, EAI and application development, BPM makes it easy for companies to codify their current processes, automate their execution, monitor their current performance and make on-the-fly changes to improve the current processes.

Here is how it works. Business analysts work alongside IT staff and create a graphical flow chart of targeted processes within the organization. These graphical designs are typically done in an integrated design environment (IDE) and represent the different events, decisions and actions that are performed by employees as well as the flows of data that are necessary to perform each task. Once defined, people begin to interact with the new application. New "processes" are started by an individual (for example, entering a new customer issue) or as the result of an event (for example, a customer account goes past due). Actions are then passed from person to person through the concept of a task inbox, and typically the passing of a URL.

For the first time, a single person can easily "hand off" an application to another person. For instance, during an approval process, one person may initiate a purchase order. If that order is over a predefined limit, the order may then be passed to the task box of the person's supervisor to await approval. The supervisor will click on a URL in the inbox, immediately see all the relevant data, and then perhaps decide to approve the order. The order may then be passed to the purchasing department and even potentially forwarded out to the supplier.

The essence of BPM software is that it solves business problems for business users. Whether Web services or Corba or .Net is part of the underlying technology is about as interesting to these decision makers as the brand of disk brake is to most people who purchase automobiles…BPM purchasers want applications that are easily understood, quickly deployed and have immediate impact. Simplicity is the key here--technology for technology's sake just won't fly.

Gurley describes six components that a BPM solution would need to provide: IDE (integrated development environment), process engine, user directory, workflow, reporting/process monitoring, and integration. This is what Visual Biz-ic needs to do.

Tomorrow: Visual Biz-ic

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TECH TALK: SMEs and Technology: Visual Biz-ic

Visual Biz-ic (a term I have coined) is at the heart of the business applications architecture. Think of it as doing for business processes what Visual Basic has done for software development. It provides a framework to specify business processes, and interconnect them. It would consist of a forms designer, a workflow manager, a process designer and a library of existing business processes. All of these would be linked via web services, with information exchange taking place through XML. Software developers and process owners in enterprises can use the infrastructure provided by Visual Biz-ic to specify the processes that need to be managed. Visual Biz-ic thus becomes a platform for business process management.

Why is Visual Biz-ic so important? Because processes are important. This is where the small- and medium-sized enterprises (SMEs) will get their next big increase in productivity. So far, computers have been used for individual task automation – email, surfing, documentation, accounting. There is a limit to its impact on productivity. This is because a task is part of a process. Processes need to designed and managed. A process can be thought of as a series of inter-connected and inter-dependent tasks where the output of one is the input of many others. In silo tasks, the output is typically an email, a print-out or a phone call. There is a terminal point. In processes, this does not happen – there is a continuum of information flow across people, there is a pipeline that is created. Process management is what are missing in most enterprises today. Only when we shift focus from tasks to processes will organisations reap the true benefits of productivity via technology.

Wrote the Financial Times recently in an article on IBM’s next transition (to incorporate on-demand computing and business process outsourcing): “Looking at companies as collections of business processes (order entry, fulfilment or billing) rather than functional departments (marketing, manufacturing or customer care) makes sense. Breaking down boundaries between departments to ensure smooth operations is also a legitimate goal. The objective now is to use industry standard technologies - such as the internet and XML, a kind of lingua franca that enables computers to understand each other regardless of the software they run - to bring more flexibility and transparency to companies' operations.”

The specialised functionalities embedded in today’s ERP, CRM, SCM applications would need to be re-created as process-driven objects as part of Visual Biz-ic. There would be a set of generic software providers who would provide these components across industries. Some of the enterprises could use these as-is, while others would either customise these to suit their business processes or use other industry-specific components from specialty vendors. Either way, the world of business software becomes akin to integrating Lego-like blocks together, with web services acting as the glue.

In fact, it is possible that SMEs will also need help in the form of consulting to help design their business processes. While the smaller enterprises will chose to go in for the off-the-shelf processes as part of the Visual Biz-ic libraries (sourced from other similar companies), the mid-sized companies may expect to redesign their internal processes and even look at outsourcing non-core processes. Either way, SMEs need the standardisation that Visual Biz-ic brings, very similar to what software developers have been used to with Microsoft’s Visual Basic.

Tomorrow: 1:1 Computing

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TECH TALK: SMEs and Technology: 1:1 Computing

So far, few applications have tended to put the user at the centre. The focus has always been on technology. For example, the knowledge management applications have always focused on top-down approaches. We are saying it should be different – put the individual at the centre, and then build things around. When done top-down, there is no incentive for the individual to contribute. In fact, it could even involve a disruption of the person’s normal activities. This creates resistance. So, we need to think of it not as a knowledge management problem, but as a user productivity challenge. The question to be answered is: how can we provide the appropriate technology tools for users to do their work better? Along with the tools, the individuals also need training in how to use them – a methodology, which may result in change of some habits.

Productivity enhancements works at two basic levels: individual and groups. The enterprise productivity is derived from the other two. The focus needs to be on enabling information flows and capturing the tacit knowledge within. This is what gives the organisation its memory and productivity. Analytics and Business Intelligence software will work at the organisational level.

The focus has to be on (a) ubiquity of technology, and (b) making people more productive via the applications. Small- and medium-sized enterprises (SMEs) have to genuinely believe that their investment in technology will go a long way in boosting their productivity. The progression is: individual productivity, group collaboration and organisational processes.

In this series, we have discussed various reference architectures: clients, servers, systems software, information management and business applications. The one unifying thread that flows across them is what I describe as “1:1 Computing”. This needs to be seen at two levels: one business, one server; and one employee, one computer. The server has all the applications necessary for the enterprise, while the presence of a computer on every desktop creates the foundation for digital processes.

The business goal of 1:1 Computing should be to create a modernised business with a connected computer for every employee to improve productivity by 10% and business profits by 10%. It does so with two key sets of components: the Server, which provides the back-end infrastructure, and the client desktops, which provide the front-end interface. The benefits: reliable messaging and secured enterprise, an increase in individual productivity, improved information flow within groups which builds an organizational memory, and efficient business processes across the organisation.

Technology should thus provide the small- and medium-sized enterprises (SMEs) with complete integrated business systems needed to modernise, automate and simplify your business. A 1:1 Enterprise is identified by:

A scalable backend infrastructure which provides instant, personalised and cost-effective communications, secures the enterprise, and provides simplified administration of the technology resources.

A computer for every employee provides the foundation for personal productivity enhancements and creating the base for electronic capture and flow of information.

A suite of applications that powers an “information refinery” and ensures an intelligent, event-driven, real-time enterprise.

A 1:1 Enterprise is what SMEs should aspire to be. The power of 1:1 does not stop with just the technology infrastructure. It extends to the way SMEs view their relationships with their customers and vendors. The 1:1 Computing infrastructure provides the foundation for the 1:1 Enterprise.

Next Week: SMEs and Technology (continued)

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TECH TALK: SMEs and Technology: 1:1 Enterprise

What is the roadmap for small- and medium-sized enterprises (SMEs) to adopt technology and become “1:1 Enterprises”? The assumption being made here is that most SMEs are relatively IT immature: in most cases, while there are computers, they are being used sub-optimally. The most common usage for computer ends up being for emailing, web browsing, documentation and printing, and accounting, and little else. This can be considered as “task automation” – employees doing specific tasks are using computers to automate what they are doing. As a result, not everyone has computers in the organisation – only those who are doing “important tasks” are given the PCs.

There is a 4-step roadmap to migrate these “IT babies” to 1:1 Enterprises, who are making use of computers effectively to regulate and automate information flows and make the SMEs event-driven, real-time enterprises. The first step is focus on how to best use the desktop applications to improve individual productivity, the second step is to install a server which takes care of the backend infrastructure, the third step is to provide computers for all employees, and the final step is to deploy the productivity for information and business process management.

1. Increasing Personal Productivity using Computers

We have to begin with individual productivity. Amazingly, we are not even taught how to use the tools at our disposal. Right from the email client to the way we should store our files, no one tells us anything. We just kind-of-figure things along the way. What is needed is a methodology to best use the tools that are available with us. Here are some simple pointers:

Managing Email: Try and answer an email within one business day. Do not move it from the Inbox till you have answered it. Just have one folder: Keep. Anything that you need to store, put it in there. So, now there are only 2 folders to search – Keep and the Sent folder. One does not have to worry about managing lots of folders, and making a decision for each email as to where it needs to be filed.

Managing Personal Information: Keep a personal blog and outline, so that notes made can be searchable.

Maintaining an Address Book and Online Calendar. Keeping business card information electronically in a database – all we need is for someone to do the data entry – can help in getting the information quickly when we need it.

Use of Instant Messaging for the “quickie” communications. This is especially useful if someone calls, and one needs to do a check with a colleague.

Backup. Ensuring that all critical files are backed up on to secondary storage, just in case.

This is just for starters. Basically, we need to give people tips on how to use technology and make themselves more productive. It makes better use of the investment in technology that has already been made. Only, if they develop the right personal habits can we move on to making groups productive.

Tomorrow: 1:1 Enterprise (continued)

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TECH TALK: SMEs and Technology: 1:1 Enterprise (Part 2)

2. Installing a Server to Create the Right Backend Infrastructure

It is remarkable how little attention small- and medium-sized enterprises (SMEs) pay to getting the right IT infrastructure in place. At the heart of this is setting up a reliable messaging and security solution. Ensuring that every individual can get a personalised email address, setting up filters to screen viruses and spam, having a firewall to prevent unauthorised electronic intrusions, providing every employee with access to the Internet – these are just some of the basic requirements for the IT base.

In addition, centralised storage of files and management of printers eases two key pain points in enterprises. All of this can be done by deploying a single server. Just as an engine powers a train, the server powers the information flows within the organisation. It provides the right foundation to build the rest of the desktop computing infrastructure. It should be possible to set up the complete server infrastructure for no more than Rs 4,500 (USD 100) per employee – hardware and the systems software software included.

3. Providing Every Employee with a Computer

A computer on every desktop – this was Bill Gates’ vision. Today, much of the developed world has achieved this state. The computer is, arguably, the single most important reason for the productivity increase we are seeing across the US, Europe and Japan. And yet, in most of the emerging markets, SMEs still use archaic paper- and labour-intensive processes, when smart use of technology can make their own staff more efficient and productive. They key to making this happen is the provisioning of one computer for every employee.

Take something as simple as email. Email does not work well internally if half the organization has it, and the other half does not. The processes based in the organization will always fall to the lowest common denominator among the staff. This is what needs to change. Be it thin clients or thick desktops, Linux or Windows, a computer on every desktop must be considered as fundamental for productivity as providing a table and chair.

4. Deploying Business Applications

The organisation now has a server in place, a 1:1 employee:computer ratio, and its staff trained in the use of the computers. The next step is to focus on group productivity applications and the core business applications. The first category of applications are critical because all employees are part of groups – groups with a goal. This is where the new breed of social software applications can make a big difference. Whether it is the use of group calendars, discussion forums, weblogs, wikis, shared workspaces, news aggregators or social networking software, the aim is to ensure that individuals can collaborate better with each other.

The second category of applications is focused on encoding the core business processes and creating the information flows so that decision-makers within the extended enterprise have access to the right and most recent information. This is what so far has been the domain of the big companies. Now, however, it is possible to cost-effectively deploy integrated eBusiness suites to makes SMEs intelligent, event-driven and real-time. Integrating with the cellphone networks is now becoming important – this is a world of, in Intel’s words, “mobilised software”.

Start and Finish IT

The entire 4-step process should be done in a time-bound manner. IT needs to be treated as core infrastructure by the SME – just as one would think of the manufacturing plant and machinery. It is the way businesses use technology that can make give them the competitive edge.

Tomorrow: Web Presence

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TECH TALK: SMEs and Technology: Web Presence

Any discussion on technology within small- and medium-sized enterprises (SMEs) will be incomplete without the discussion of the Web presence. The website is perhaps the most neglected part of the IT infrastructure. Part of the reason is that it still remains quite a chore to update the website. As a result, most websites (if they do exist) are out of touch with the reality of the entity’s business activities. Used well, the website can in fact be a very powerful asset for SMEs. It is a cost-effective way to reach out – to customers nearby and prospects worldwide.

It is an irony in the world of content management that it is so much easier for an individual to update a weblog than it is for an organisation to update a website. (On a related note, blogs are also so much more readable than corporate websites!) This is the thinking which makes me believe that organisations need to present a more personal side of their business on the web. Think of marketing as a conversation, as the authors of “The Cluetrain Manifesto” suggest.

My ideal corporate website would have three parts to it, all built using a content management or blogging tool. The first part is the standard website as it exists today – the about us, products and services, press section, contact us, and so on. This needs to be there because this is what most visitors are expecting to see. But the website needs to go beyond this with the addition of two new sections – an “Industry Outline” and a “Daily News”.

The “Industry Outline” can be just a single page. It provides a list of resources and context for first-time visitors. It places the SME in the context of the industry, and highlights the various developments that are taking place. It becomes a kind-of ready reference for visitors. There are links, maybe a few comments on the news, statistics, events that are taking place, and so on. Much of this information is probably already known to people within the organization – what I am suggested is that it needs to be made public, to make the page a fact-finder for others.

The “Daily News” is a weblog. It presents the “what’s new” section with a personal touch. It should ideally be authored by one of the senior owner-managers, and thus should also be tinged with personal observations. It can also provide excerpts from relevant stories which have appeared elsewhere. It is the perfect complement to the “Industry Outline”, which provides the high-level view. The “Daily News” section provides a regularly updating collection of links, news and comments on relevant events as they take place. Reader should also be allowed to leave comments on the blog posts for everyone else to see. The weblog should also offer an RSS feed allowing interested readers to syndicate the content and receive it in their aggregator.

These two sections are not necessarily what one would expect to see on corporate websites. And that is precisely the reason they should be there! They help build a relationship with the visitor. They give a reason for a repeat visit. They provide a human touch to an otherwise impersonal presence. One side-effect of this will be that as others start linking to the site, the Google Rank will rise, making the site show up higher in the search rankings. Yes, there is a time commitment from management towards the online presence, and the benefits may not be immediately visible. But this is a differentiator which will provide a platform for the diffusion of ideas in a manner a late-coming competitor will find it hard to replicate.

Tomorrow: SME Wheel of Penetration

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TECH TALK: SMEs and Technology: SME Wheel of Penetration

For entrepreneurs, the small- and medium-sized enterprises (SMEs) represent a double-edged sword: SMEs are numerically very large in number, and account for a huge portion of the IT spend; yet, they are hard to reach, and even harder to please! I believe that SMEs represent the next frontier for entrepreneurial IT companies to target and capture. But to carve open the SME market will require efforts from a number of players across a wide spectrum of segments. In the last two columns in this series, I will discuss the set of co-ordinated actions that are needed to increase usage of IT across in SMEs. Think of this as the “SME Wheel of Penetration”. Each of these presents potential opportunities for visionary entrepreneurs.

1. Affordable Hardware

SMEs need low-cost hardware if they are to provide a computer for every employee and realize the vision of “1:1 Computing”. This means thin clients or low-cost, low-configuration desktops. It also means servers in each enterprise, each of which should be pre-loaded with the software, so that the server is an “instant-on”. In fact, the server can be thought of as “software-in-a-box”.

India would do well to eliminate all import duties and in fact give tax breaks (for example, 100% depreciation) for SMEs using IT. The paper losses sustained would be more than made up by the increase in individual and industrial productivity.

2. Integrated Software

Software integration needs to happen at two levels: not only does it need to be integrated with the hardware so that SMEs see a single-point solution, but also the various software components need to be integrated among themselves so that information is handled only once. Open-source can be the foundation for many of the software needs for SMEs.

Software providers also needs to recognise that we are now moving to a wireless world, and as much users may want access to their data not just from their desktops but also from their cellphones. Utility pricing of software, which would include updates and upgrades, would also help in speeding up adoption. Local language support in India would also go a long way in ensuring proliferation. There are also some interesting opportunities to create richer desktops – be it microcontent clients, web services browsers or next-generation personal information managers.

3. Channel

The link between the hardware and software producers and integrators on the one hand, and the SMEs on the other hand, is the channel. In India, this channel consists of the few thousand assemblers and Genuine Intel Dealers, each of whom has a database of SMEs it caters to. So far, the channel has only sold hardware, peripherals and annual maintenance contracts. Software has been either pirated or not used. The role of the channel needs to change – from just being a box-seller, the channel needs to migrate to selling solutions. They also will be called upon to provide the first-level support to SMEs. The channel will thus play an increasingly important role in the SME IT value chain.

4. ISVs

There are many small independent software vendors and developers. As the SMEs absorb IT, they will need business applications – which cater to their unique industry or business requirements. This is where the ISVs come in. Their domain knowledge can help them create software products which now can find distribution via the value chain to SMEs across wider markets. Platforms like Visual Biz-ic can go a long way in simplifying the development process for ISVs.

5. Training and Education

This has to happen at multiple levels – top management of SMEs needs to be made aware of the need for IT, end-users need to be shown how IT can make them more productive in all that they do – both at the individual-level and as part of groups, and support staff needs to be trained to provide assistance to the SMEs for the solutions they use. There is an opportunity for “SME IT Academies” to be set up in every neighbourhood. These points-of-presence can also double as demo centers, showcasing the various IT solutions for SMEs.

Tomorrow: SME Wheel of Penetration (continued)

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TECH TALK: SMEs and Technology: SME Wheel of Penetration (Part 2)

6. Support

Support is a critical aspect of the IT adoption by small- and medium-sized enterprises (SMEs). Technology is still as complex by most SMEs, and as a result because they are unable to recruit and retain technical support staff, IT usage suffers. Support needs to be provided at two levels: through the presence of local “roaming” engineers who can reach the SME within an hour, and via the presence of centralised call centers, which offer support via the Internet and through the use of technologies like Instant Messaging, voice-over-IP or web chat. The key is that the SMEs must feel that not only is the technology easy to manage, but also that in the event they need support, it is available reasonably rapidly.

7. Colleges

Colleges can play a key role in the proliferation of IT to SMEs. Firstly, the colleges provide the engineering talent which can contribute to open-source development projects and the pool for IT companies catering to the SME market. Secondly, they can help develop the local Linux and open-source software ecosystems around the colleges. Thirdly, the management institutes can take up the task of standardising the business process definitions and provide the necessary consulting services that SMEs may need in the adoption of IT.

The current situation in India is such that we find many talented engineering and marketing graduates going in for jobs in call centres and business process outsourcing organisations. This is not necessarily the best use of their capabilities – the loss is India’s as a nation. If, however, we are able to create the domestic market for IT consumption among SMEs, many of these newly minted graduates could find gainful and perhaps, more rewarding, employment.

8. Financing

Most SMEs tend to baulk at the large upfront investments that technology tends to require. Most would be glad to make monthly payments for its use. Yet, it is hard for SMEs to get loans for the purchase of hardware and software. This needs to change.

Banks and financial institutions need to start thinking of technology as core infrastructure at the time of lending to SMEs. In fact, when sanctioning loans, banks must ask SMEs what their IT strategy is, and where their “information plant and machinery” is. India is awash in cheap credit now – this can be used to the benefit of SMEs by making available technology on a monthly installment basis.

9. Information Marketplace

One of the challenges SMEs face is growing their business. In most cases this means, finding other SMEs as customers. What is needed is for an online information marketplace which enables SMEs to reach out to other SMEs for buying and selling. The Internet could also be used to share success stories among the early adopters of IT. Thus, an SME-oriented portal would be very useful – mixing content, community and commerce. In fact, ideas from the emerging breed of social networking sites could be used to help SMEs connect to other SMEs and new ideas.

10. Connectivity

Bandwidth is critical for business. And in India, bandwidth is still incredibly expensive. What India needs is a telecom revolution for enterprises so that SMEs can get fixed-price, low-cost broadband delivered to their offices and factories anywhere in India. Whether this is by fibre or wireless is not important – the need is for multi-megabit speeds at no more than a few thousand rupees a month.

Presentation: I recently made a presentation at BangaloreIT.com on “Affordable Computing”. As part of the presentation, I prepared a few slides which capture many of the ideas outlined in the series so far.

Next Week: We look at the vexacious issue of reaching SMEs, and how we need to rethink the technology distribution chain to address the SME market.

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TECH TALK: SMEs and Technology: Tech Distribution

Let us begin by looking at the distribution system for technology for the enterprise segment. For the large buyers, there is a well-established system – a mix of technology creators, systems integrators, distributors and resellers aided by technology magazines, trade shows and consulting firms which ensure that the message about new technologies and roadmaps gets to the decision makers (CIOs and IT managers). However, the process of decision-making in the small- and medium-sized enterprises (SMEs) is very different, and the system that works so well for the larger enterprises does not work for the SME segment.

Most SMEs are hard to reach, very distributed, have limited IT staff, and cannot afford to pay a lot of money. This makes it a less attractive market for the IT sellers. However, what a single SME lacks in terms of purchasing power is made up for by the entire category. Yet, that in now way alters the magnitude of the challenge faced by IT companies in selling to them. The result has been that SMEs and IT companies find themselves trapped in a low-equilibrium situation, which usage of IT is sub-optimal within SMEs.

Let us consider the tech distribution value chain that is there in India. Most SMEs in India are addressed by the assemblers or GIDs (Genuine Intel Dealers). They sell hardware, provides oftware (legal or pirated) as asked for by the customers, do the networking within the office, provide basic support on the hardware, and undertake the facilities management as part of the annual maintenance contracts. Much of the channel is re-active, responding to what the customer wants. The channel needs to provide a full-solution, but is unable to do so because of its own limitations (limited staff, and the ease of just selling the box).

What is meant by a “full-solution”? For starters, there is a need for user education, on how technology can make a difference in increasing productivity of the SME. Next, there is a need for technical selling and demonstrations, showing how technology can actually make for an “intelligent, real-time enterprise”. This would mean showcasing software (vertical, industry-specific solutions) and appropriate other technologies (for example, WiFi). This “solutions showcase” needs to be round-the-clock and not just limited to periodic roadshows. It also needs to be at a point in the neighbourhood of the SMEs.

In addition, after the sale, the SME needs installation, training, support and upgrades. While this happens today, it leaves much to be desired. Typically, in the event of problems, the channel who takes responsibility only for the hardware will blame the software provider, and vice-versa. The one who suffers is the SME. There is little incentive for the channel to support software which the customer is not paying for. The customer, on the other hand, believes that pirated software is the only way to go, because the cost for legal software is extremely high. As a result, software once installed stays the way it is, and is rarely upgraded.

This sub-optimal situation needs to change. It is not going to be easy to transform the channel. What is needed is a different institution which addresses the shortcomings of the channel and provides a one-stop solution to SMEs. And for that, we turn to ideas from IBM and Wal-mart.

Tomorrow: An IBM for SMEs

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TECH TALK: SMEs and Technology: An IBM for SMEs

In the small-and medium-sized enterprise (SME) segment, there has been a co-ordination failure in getting solutions to SMEs. Across the world, while IT has penetrated large companies broadly and deeply, in the SME space, usage has been thin and shallow. Even today, as the various IT players see the SME segment, it is seen as one which almost no one has succeeded in conquering. Yes, there have been the occasional successes – like Intuit for accounting. But if one compares the promise of technology and its usage in SMEs, there is a huge gap which needs be bridged.

To build this digital bridge requires two elements: first, an entity which can co-ordinate the actions of many and provide a single, integrated set of solutions to SMEs, and second, do the delivery through a physical presence close to the SMEs. In other words, SMEs need a cross between IBM and Wal-mart.

Consider IBM and how it transformed itself under Lou Gerstner in the 1990s into a solutions and services provider for enterprises. Writes Gerstner in his book “Who Says Elephants Can’t Dance?” in the chapter entitled “Making the Big Bets”:

Our bet was this: Over the next decade, customers would increasingly value companies that could provide solutions – solutions that integrated technology from various suppliers, and more important, integrated technology into the process of an enterprise. We bet that the historical preoccupations with chip speeds, software versions, proprietary systems, and the like would wane, and that over time the information technology industry would be services-led, not technology-led.

If customers were going to look for an end-to-end integrator to helpthem envision, design, and build end-to-end solutions, then the companies playing that role would exert tremendous influence over the full range of technology decisions – from architecture and applications to hardware and software choices.

This would be a historic shift in customer buying behavior. For the first time, services companies, not technology firms, would be the tail wagging the dog.

What does such a business take? Gerstner again: “The skills required in managing services processes are very different from those that drive successful product companies…In a services business, you don’t make a product and then sell it. You sell a capability. You see knowledge. You create it at the same time you deliver it. The business model is different. The economics are different.”

The ideas that IBM put together a decade ago now need to be applied to the SME market. There is a need for an “IBM for SMEs” – an integrated solutions and services provider, but one which can do at much lower price points, because the focus is on the SMEs in the emerging markets.

The next question is on how to provision these services to SMEs. For this, there is a need for a physical presence close to the customer. Think about Wal-mart, the world’s largest company in terms of revenues, and how its scale and proximity provides affordable products for its customers.

Tomorrow: IT Wal-mart

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TECH TALK: SMEs and Technology: IT Wal-mart

Sam Walton’s “Made in America” is a must-reading for entrepreneurs and managers. It is an extraordinary story about how Walton went from owing a single dime store in rural America to creating the world’s largest retailer. As I was reading the book recently and thinking about the problem of SME distribution, the answer came to me: we needed to have the physical equivalent of a Wal-mart-like store to showcase IT for SMEs, reachable in perhaps no more than 20 minutes (a distance of about 10 kms). But before we look at the solution, let us take a ride back in time and consider what we can learn from the remarkable organisation Sam Walton built:

In the fifties and sixties, everything about America was changing rapidly.

All the kids who had grown up on farms and in small towns had come home from World War II or Korea and moved on to the cities where all the jobs were. Except that they weren’t really moving to the cities;they were moving to the suburbs and community into the cities to work…The downtowns of big cities started to lose population and business to the suburbs, and the big department stores had to follow their customers and build brand stores out in the suburban malls.

In the small towns [where we were], you didn’t see much of the mall construction and fast food neon that you saw everywhere else. You saw the small-town commercial centres start to shrivel up. A lot of our customer base had moved on, and the ones that remained weren’t stupid customers. If they had something to buy,they wouldn’t hesitate to drive fifty miles o get it if they thought they could say $100. Not only that, but with the introduction of TV and the new postwar car models, being modern had become a big thing. Everybody wanted to feel up-to- date.

[It was the] strong customer demand in the small towns that made it possible for Wal-mart to get started in the first place, that enabled our stores to thrive immediately, and that eventually made it possible to spread the idea pretty much all over the country. For many years, we lived entirely off the principle that customers in the country and in small towns are just like their relatives who left the farm and moved to the city: they want a good deal as much as anybody. When we arrived in these little towns offering low prices every day, satisfaction guaranteed, and hours that were realistic for the way people wanted to stop, we passed right by that old variety store competition, with its 45 percent markups, limited selection, and limited hours.

While the big guys were leapfrogging from large city to large city, they became so spread out and so involved in real estate and zoning laws and city politics that they left huge pockets of business out there for us. Our growth strategy was born out of necessity, but at least we recognized it as a strategy early on. We figured we had to build our stores so that our distribution centers, or warehouses, could take care of them, but also so those stores could be controlled. We wanted them within reach of our district managers, and of ourselves in Bentonville, so we could get out there and look after them. Each store had to be within a day’s drive of our distribution center. So we would go as far as we could from a warehouse and put a store. Then we would fill in the map of that territory, state by state, county seat by county seat, until we had saturated that market area.

This saturation strategy had all sots of benefits beyond control and distribution. From the very beginning, we never believed in spending much money on advertising, and saturation helped us save a fortune in that department. When you move like we did from town to town in these mostly rural areas, word of mouth gets your message out to customers pretty quickly without much advertising.

Instead of the distinction between cities and small towns, think of large enterprises and SMEs. Instead of the distribution centre, think of the Internet. Instead of the consumer products, think new technology. Now re-read what Walton has written, and you get the idea. SMEs too are aspirational, wanted state-of-the-art solutions. But there is no one selling to them. Sam Walton’s thinking is needed when it comes to setting up the SME stores: take a second- or third-tier town or city (preferably, an industrial cluster) and consider setting up the IT equivalent Wal-mart, not just to sell products, but more importantly, to provide solutions and services.

Tomorrow: Tech 7-11

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TECH TALK: SMEs and Technology: Tech 7-11

So, the question is: how do we build a neighbourhood technology store which co-ordinates the actions of the various IT providers and provides services to small- and medium-sized enterprises (SMEs)? Think of a Tech 7-11, which combines IBM’s one-stop, integrated solutions and Wal-mart’s physical presence, discounted pricing and customer focus. [I have used the term 7-11 to denote the store timings: 7 am to 11 pm. In addition, just as the 7-11 convenience stores dot the landscape in many Asian cities providing all the products that households need for daily life, so too will the Tech 7-11 provide all the technology that SMEs will need for their daily business.]

The Tech 7-11 provide eight key functions as part of the tech value chain for SMEs:

1. Neighbourhood Point of Presence: The Tech 7-11 is a place of about 500-700 square feet, accessible by SMEs in the neighbourhood in about 20 minutes of driving. The first Tech 7-11s will be located in second- and third-tier cities and towns: they are majorly underserved markets. In India, these are places like Tirupur or Surat, which do have an industrial or exports base, but have few technology providers suggesting how IT can make a difference to their productivity.

2. Solutions Showcase: Just was few of us would buy a car looking at simply an advertisement, why should we expect SMEs tobuy technology based on specs and screenshots? They need to see and test-drive technology solutions. They need to touch-and-feel it. Technology needs to come alive in the form of solutions that the customers want to see and deploy, rather than worrying about what processor it is or what brand of printer it is. The Tech 7-11 will provide demonstrate solutions, and not just the components. For example, it should re-create a mini-office or factory set-up, and show how key business processes can be automated for faster access to information for decision-makers. For starters, theTech 7-11 could show how the Linux platform is more than a match for the Windows desktops that users know about.

3. Channel Interaction: The Tech 7-11 becomes a local support centre for the channel (hardware vendors, facilities management companies, software developers), complementing the channel’s ability to generate leads and close the sale. It provides a permanent demo centre for the channel to demonstrate technology solutions to SMEs, and also get support in terms of the technical marketing staff that may be needed to speak the customer’s business language.

4. Sales and Support: The Tech 7-11 can also do direct selling of specific products and services. In fact, it is likely to become increasingly possible that the Tech 7-11 becomes the primary selling agent, sourcing hardware and software from the appropriate partners (channels included), much like the way a Wal-mart does. This also makes it possible for the Tech 7-11 to provide support – after all, the customer is likely to want support from the entity it made the payment to. Since the channel’s capabilities to provide support are extremely limited, the Tech 7-11 needs to become the first line of support for the solution.

Tomorrow: Tech 7-11 (Part 2)

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TECH TALK: SMEs and Technology: Tech 7-11 (Part 2)

5. Training Centre: The Tech 7-11 needs to allocate a small area where it can provide ongoing hands-on training – for business owners, end-users and support engineers. This helps in enabling a key part of the value chain because without the necessary education, not only will IT be used sub-optimally, it is likely to be not even deployed. Once people know what technology can do in the training sessions, they will use it to become more productive – individually and in groups.

6. Local User Groups: The Tech 7-11 can become the local meeting place for SMEs to share their experiences with IT. This way, success stories can be diffused rapidly through the network. These local user groups can also put forth their business requirements which can be taken up for solution by the Tech 7-11 through its central engineering centre. Thus, there is a multi-way flow of information: not just between the Tech 7-11 and SMEs, but also amongst SMEs. In some ways, this is the role that local trade associations play; the Tech 7-11 helps bring the focus on and around IT and best practices.

7. College Students Co-ordination: The Tech 7-11 serves as a co-ordinating agency to manage the college students, who can be roped in to provide installation, training and support in their free time. The benefit for college students is that they get practical, hands-on, real-world experience on live technology projects, rather than working within just the confines of the theoretical, academic environment. This makes it more likely that the students will take up meaningful jobs in the domestic IT industry leveraging their skillsets and learnings, rather than working in a call centre. (There are plenty of others who can do the jobs that many of the IT graduates are now doing in call centres.) In the SME IT value chain, the college students provide an effective and rapid response teams for the low-cost resources that are needed to provide technical marketing assistance, do the installation, and provide first-level support.

8. New Tech Previews: The Tech 7-11 also demonstrates the emerging technologies – be it WiFi, RFIDs, smartphones, new user interfaces, or even new software applications. This is thus the distribution point for entrepreneurs to try out their innovations. The goal is to get the early adopters in the neighbourhood interested and become the testbeds for piloting these technologies.

Thus, the Tech 7-11 plays a multi-faceted role in the tech distribution chain. It is, in effect, the hub around which the affordable computing ecosystem for SMEs needs to be built to make realthe vision of “1:1 Computing” and create intelligent, real-time enterprises.

Conclusion

SMEs in India and other emerging markets present an enticing opportunity. And yet, many have failed to unravel this segment at the “bottom of the pyramid”. Recent innovations in technology combined with the commoditisation of hardware and software driven by the developed countries offers new hope and opportunity that the mass of millions of SMEs can indeed be given affordable, managed, standardised, managed technology solutions. Given the lack of legacy of IT usage, this is a market which can be the primary driver for technology growth in the coming years.

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