TECH TALK: Tech Trends: Changing Landscape

Technology touches us all - in every aspect of our life. Our digital lives have been transformed in the past ten years. Computers have digital representations of our personal and work lives embedded in our emails and documents, cellphones connect us instantaneously with family and friends, and websites assist us in the search for information and to complete transactions. Technological change continues to accelerate, providing the visionaries with an opportunity for that little extra competitive advantage which can make all the difference between market leaders and the also-rans.

As we look at the various technology trends, it is important to understand the underlying forces of change and their evolution in the years to come. This is how new opportunities and business are created. Entrepreneurs need to make bets not on today, but the world of tomorrow. Since change is happening across many dimensions, it is also important to get a wholistic view of the world around us.

In addition, there is a need to develop a perspective that centres around emerging markets. These are the next big growth markets and need solutions which are likely to be different from the developed market. Increasingly, many of the world’s largest technology companies are looking to create specific emerging market groups and solutions. The developed world has seen computing and communications evolve through many sequential revolutions: personal computers, local area networks, client-server computing, enterprise software, Internet, mobile phones and broadband. In emerging markets like India, all these revolutions are taking place in parallel. What happened in the developed markets over two decades is being compressed in the emerging markets in a few years. This means that more than just technology innovation, there is a need for agility, speed and localisation to tap into the opportunities by technology’s newest customers.

To put this context, take a look at India and the changes that are underway. Cellphone adoption is growing and the phone is morphing from just a voice device to both a possible alternative to a computer and is becoming a fashion statement. Computers are becoming a wee bit more affordable with the likes of AMD and VIA making inroads with cheaper processor. Broadband is starting to become available at reasonable price points. Open-source software creates an alternative to piracy and non-consumption. Internet e-commerce is starting to pick up with services like train ticket booking which remove a pain point in daily lives. As India develops, there is an opportunity to catalyse this change and capitalise on the millions of small businesses and hundreds of millions of people in rural India who will get integrated into the digital value chains.

Technology is no longer a decision to be just made by the elite or IT managers. It is increasingly going to get embedded in multiple aspects of our lives. It is a weapon that needs to be leveraged by top management not just in the marketplace, but also across the extended enterprise. In this context, it is helpful to step back and take a look at ten key technology trends that we are seeing around us and understand their impact for our personal and business lives. For each trend, we will also look at its impact and opportunities in the Indian context.

Tomorrow: Digitisation

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TECH TALK: Tech Trends: 1. Digitisation

The fundamental driver across the technology landscape is digitisation – once things move from atoms to bits, or analog to digital, it becomes possible to do a wide array of transformations which previously were not possible. For example, take music. For a long time, as the industry has shifted to digital content, it has become possible to not only time-shift consumption via customised playlists on devices like Apple’s iPod, but also to distribute it via the Internet for nearly zero-cost, fundamentally undermining the business model of the industry. Something similar is happening in telecom with voice-over-IP. Traditional telcos are realising that the ability to digitise voice and transmit it not over proprietary networks but over the Internet threatens their core business and customer relationship.

The digitisation of information and business processes means that countries like India can use their low-cost advantage to offer outsourced services to global organisations. The process that began with the availability of the personal computer a quarter-century ago is now cutting across the value chain, creating an end-to-end integrated digital flow. From our homes to enterprises, digitisation is the starting point for many disruptive innovations as part of “creative destruction”, driving significant changes across industries, bringing not just change but also opportunity in a world that’s becoming smaller and smaller.

Thomas Friedman wrote recently in the New York Times about Globalisation 3.0:

The first era [of globalization], from the late 1800's to World War I, was driven by falling transportation costs, thanks to the steamship and the railroad. That was Globalization 1.0, and it shrank the world from a size large to a size medium. The second big era, Globalization 2.0, lasted from the 1980's to 2000, was based on falling telecom costs and the PC, and shrank the world from a size medium to a size small. Now we've entered Globalization 3.0, and it is shrinking the world from size small to a size tiny. That's what this outsourcing of white-collar jobs is telling us — and it is going to require some wrenching adjustments for workers and political systems.

Globalization 3.0 was produced by three forces: First is the massive installation of undersea fiber-optic cable and bandwidth (thanks to the dot-com bubble) that have made it possible to globally transmit and store huge amounts of data for almost nothing. Second is the diffusion of PC's around the world. And third (what I missed most) is the convergence of a variety of software applications — from e-mail, to Google, to Microsoft Office, to specially designed outsourcing programs — that, when combined with all those PC's and bandwidth, made it possible to create global "work-flow platforms.”

Tomorrow: Digital Convergence

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TECH TALK: Tech Trends:Digital Convergence

Business Week sets the stage for the world of tomorrow:

For nearly two decades, industry sages have heralded the coming age of converging digital technology. But it remained an empty slogan. Now, thanks to faster chips, broader bandwidth, and a common Internet standard, technologies are quickly merging. The market for personal digital assistants, so hot in the late '90s, is vanishing as customers get the same functions in a cell phone -- often with a camera to boot. The latest televisions from Royal Philips Electronics and Sony have enough computing firepower to grab streaming video off the Net. "Convergence is finally really happening," says Gottfried Dutiné, an executive vice-president at Philips. "Digitalization is creating products that can't be categorized as tech or consumer electronics. The walls are coming down."

That sets up a collision of three massive industries. In one corner stands the $1.1 trillion computer and software biz, with its American leaders. In another is the $225 billion consumer-electronics sector, with its strong Asian roots and a host of aggressive new Chinese players. The third camp is the $2.2 trillion communications industry, a behemoth that extends from wireless powerhouses in Asia and Europe to the networking stars of Silicon Valley. All three groups will have a hand in building the digital wonders that are headed our way. But none of these industries, much less a single company, can put all the pieces together. They all need help. For this they venture into adjoining territories, where they forge new partnerships and take on new rivals.

The result is a Big Bang of convergence, and it's likely to produce the biggest explosion of innovation since the dawn of the Internet.

As these technologies evolve over the next decade, a new digital world will emerge. Analysts predict that these nascent networks will speed up by an average of 50% a year, the historic norm. That will help the U.S. catch up over the next few years to where the Japanese and Koreans are today -- with far faster broadband and mobile systems that are robust enough for commuters to check for traffic jams and watch soap operas on their cell phones. As networks grow and chips continue to strengthen, companies will work madly to come up with winning products and services. Within the next five years, industry analysts say, practically every machine in the wide realm of communications -- every gadget that sings, talks, beams images, or messages -- will sport a powerful computer and a network connection. And every bit of digital information, whether it's a phone call, a song, a Web page, or a movie, will flow among these machines in the very same river of data.

By the end of this 10-year cycle, the change could be extreme. Web pages will snap to life. Hundreds of thousands of political bloggers, fly fishermen, chefs, and Oprah wannabes will be uploading gobs of video programming -- creating their own channels. This plethora of Web shows will joust for attention with television fare, Internet radio, video e-mails, and games. All of it will play on televisions, computers, and cell phones, which will be different flavors of the same machine. "The concept of a network or a channel will go away," says Jakob Nielsen, a partner at technology consultant Nielsen Norman Group in Fremont, Calif. "They're artifacts of old technology."

The networks now taking shape will link together more than 1 billion people, not just with words or voices, but with music, video, games, and commerce. A vast chunk of the world economy is going digital -- and for the next few years it's up for grabs. This revolution won't quiet down anytime soon.

Think of the force of digitisation as the “mother of all forces” – the underlying tectonic shift that is creating change everywhere. It has been with us through many years – only now have all the various elements started to come together. For example, digital camera phones can convey pictures of loved ones and designs of prototypes across the world in seconds. Digitisation is an abstraction with makes itself real through the pervasive infrastructure that we can see around us. It is the fundamental building block of tomorrow’s world.

Tomorrow: India Action: Digitise Education

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TECH TALK: Tech Trends:India Action: Digitise Education

What India needs to do is to leverage the forces of digitisation to build out a digital infrastructure across the country to make up for the various gaps that exist. If there is one area where India needs to focus on, it is education. Atanu Dey, in his May 2001 essay entitled “Who Paid for My Education?”, lays out the grim reality of India’s utter failure in providing primary education:

We neglect primary education. Our constitution mandates primary education for all (Article 8 of the Indian Constitution). Yet, 41% of children do not reach grade 5 in India.

The most devastating impact of our dismal educational system is that we are condemning ourselves to a future of exceedingly low economic development. If there is one thing that growth and developmental economists have learnt, it is this: education is the most important factor in economic growth. Education has more impact on economic growth than natural resources, foreign investment, exports, imports, whatever. Neglect education and you may as well hang yourself and save yourself the pain of a slow miserable death.

So who paid for my education? It is the poor rural children, thousands of them, who paid for my education by losing their opportunity to become semi-literate. The system is tilted against them and unless there is a radical change in the way that education is funded, they will continue to pay the price for subsidizing the US for decades to come.

A collection of digital technologies is what is needed to address the education problem in India. These words from Nicholas Negroponte, written in 1998, are as true today as they were then:

Will the information-rich get richer and the information-poor get poorer? Will the divide shrink, or expand? The question might also be phrased in terms of the education-rich and the education-poor. The latter category includes some 200 million children who do not complete their primary education.

One-room schools are often believed to be a sad consequence of poverty. But instead of a problem, they may be a solution. These schools, which may make up as many as half the number of primary schools on the planet, are driven by the principle that young children should learn as close to home as possible. The result is an educational environment that is small, local, personal, and age-integrated and that potentially provides a much richer learning experience than larger schools in urban environments.

My advice to political leaders in developing nations: Adopt an educational strategy that focuses digital technology on primary education, particularly in the poorest and most rural areas.

Digitisation of teaching content complemented with electronic means of distribution can help India transform its education system and bring primary education to tens of millions who languish in schools with no teachers. The solution is discussed [1 2 3] in an earlier Tech Talk essay, “As India Develops”.

Tomorrow: IT Commoditisation

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TECH TALK: Tech Trends: 2. IT Commoditisation

Silicon, Storage and Bandwidth are available in plenty. As Duane Northcutt of Silicon Image puts it, the world of computing and communications is being impacted by the three forces of “mega-gates, mega-bytes and mega-bits.” Processing power doubles every 18 months, storage capacity every 9 months and available bandwidth every 12 months. This has been happening for some time now, and is likely to continue for the foreseeable future. The result is there for us to see. Google has built a massive platform with more than 100,000 commodity computers and is in a position to offer free services like email with a storage capacity of 1 GB email. The cost of 1 GB disk space has fallen to just about $1. In countries like Japan and Korea, bandwidth of the order of 30 Mbps is available for about $50.

Technology has become a commodity, leading many to ask if IT really matters. Understanding the key benefits of IT and developing a strategy to use it in business is necessary to extract value from IT. As Hal Varian wrote recently in the New York Times, “It is not information technology itself that matters, but how you use it. Companies cannot afford to ignore information technology, or relegate it to the back burner. Commoditising it does not necessarily mean innovation slows. If anything, it could accelerate as more and more innovators experiment and tinker with those cheap, ubiquitous information technology commodities.”

Global investment in technology continues. PC shipments are likely to rise to more than 175 million units this year, with about 100 million of these being replacements for older computers. Next year will see even higher numbers. There are more than a billion cellphones around the world, with 2004 seeing sales of more than 500 million phones which provide all kinds of functionality ranging from digital cameras, multimedia messaging, FM radio, TV and even some basic computing functions. Even India has wireless data networks (through Reliance Infocomm) in hundreds of cities with connectivity costs of as little as 40 paise (less than 1 cent) per minute. Seemingly, technology is ubiquitous and everywhere. Or is it?

In countries like India, adoption of IT still leaves a lot to be desired. Only the very top of the pyramid uses technology. There are four barriers which need to be overcome for these countries to benefit from the commoditisation of IT: the information barrier, on what technology can really do; the desirabaility barrier, through the availability of relevant and useful software and applications; the manageability barrier, so that IT can be easily deployed and leveraged; the affordabaility barrier, which makes it available at prices that local users can pay.

Next Week: Tech Trends (continued)

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TECH TALK: Tech Trends: Does IT Matter?

Nicholas Carr has written a book, “Does IT Matter?”, following his article in Harvard Business Review last year which created a huge debate across the industry. Carr says in Wired and an interview to CIO magazine: “The IT industry is looking more and more like a traditional, mature manufacturing business. Plagued by undifferentiated products, global overcapacity, and falling prices, hardware and software companies are consolidating, shifting production offshore, and making money on maintenance and other fee-based services. They're competing on cost rather than innovation and features… As IT has become more standardized—cheaper, more ubiquitous—it has become harder and harder to use the technology itself as a competitive barrier because it becomes easier for competitors to replicate your systems… IT matters enormously as an essential component of business today. You can't run a business without it. But does it matter strategically? Is it going to set your company apart from your competitors? The answer increasingly is no, and it's counterproductive at this point to think of IT in that way and to invest in IT with that kind of hope.”

In a rejoinder to Carr, Don Tapscott argues that “the best companies have the best business models because they have the best IT strategies”:

Superior IT enables superior information—a resource that rivals superior talent in competitive differentiation. High-performing business models are also based on superior information…At the cusp of each wave of tech innovation, market leaders seize advantage, whether as early adopters or fast followers. They grab positional advantage through a combination of IT and business design, and then others have no choice but to follow in their wake. This happens anytime there are new waves of tech innovation.

IT and business models are not discrete factors in strategy; increasingly, they are inseparable. IT is leading to profound changes in business design—not just to new business processes but to the deep structures of the corporation. Because IT and networks radically reduce internal transaction costs, companies can conduct business in real-time. My research shows that smart companies can speed up their metabolism and build high performance into their business designs.

Most important, IT is slashing transaction and interaction costs between companies. The upshot is that partnering is becoming more cost-effective than performing many business functions internally. The vertically integrated corporation is unbundling, and companies can now focus on what they do best and partner to do the rest in what I've called "business webs." Leading companies grow by focusing on their core—that cluster of activities where they have unique capabilities and where they create true barriers to replication. The evidence is clear: Companies that forge high-performance business webs tend to have better products, lower cost structures and better profitability than their vertically integrated counterparts.

It is true that as the Net becomes a powerful infrastructure, and as new standards enable rapid deployment of applications, some technology innovations can be brought to market and replicated faster. However, it's not so easy to do all the really hard work that makes a system advantageous to a company such as changing business processes, organizational structures, culture and human behavior. The corporate graveyard is strewn with the bodies of those who naively thought it was easy to change a culture. Launch a business innovation or new business design based on IT, and the biggest challenge for your competitors to replicate will be the changes you made to your business, not the technology that inspired them. Companies that successfully alter their business around IT can achieve a significant window of competitive advantage.

Those in the business of selling IT solutions would like to believe that IT has not and cannot be commoditised. For those leveraging IT, it may not matter as much – technology has to become part of the DNA of business and if commoditisation helps in lowering investments, so be it.

Tomorrow: India Action: Invest in Broadband and the Internet

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TECH TALK: Tech Trends: India Action: Invest in Broadband and the Internet

India can be a big beneficiary from the commodisiting of IT. A combination of technologies has the potential to bring down the cost of computing down to Rs 700 ($15) or so a month for hardware, software, support and connectivity. This is the key to opening up access to tens of millions of Indian families, students and employees.

Investing in the Internet and broadband is as important as investments in roads, ports and airports. The digital infrastructure needs to be built to complement the physical infrastructure in India. One of the biggest missing factors in India is the availability of broadband. A recent TRAI report on recommendation for increasing the penetrating of the Internet and accelerating deployment of broadband in India says: “While internet growth rates in India have been flat, and at times declining over the past three years, other countries like Korea, China and Malaysia have been doubling and tripling the size of their internet and broadband subscriber base. India currently has 0.4 internet connections and 0.02 broadband connections per 100 persons, while Korea has 25 and China has 1.4 broadband connections per 100 persons, with its current level 50% higher than what it was just six months ago. Korea has achieved its success story in a span of less than five years, going from less than 1 broadband subscriber per 100 persons in 1999 to the levels it has reached today. By 2002, nearly 30% of their GDP was transacted on broadband. The lessons that India learns from these examples can be applied to our current situation to realize the same explosive success.”

India needs competition and investment in the newest broadband technologies to bring down the artificially high tariffs – estimated to be 1200 times more expensive as compared to South Korea on a GDP per capita comparison. A mix of technologies like DSL, wireless, cable and satellite can help in building out the broadband infrastructure in India. Having an affordable always-on connection will transform the way people use computers. This will provide the necessary fillip for the creation of local and relevant content and software.

As the broadband infrastructure comes into place, enterprises in India need to start thinking of 1:1 computing – a connected computer for every employee. This also necessitates rethinking of their business: how would workflows and processes be different with a computer on every desktop? Answering this question and putting in the right solutions internally will help boost productivity in India’s industrial sector, especially among the small- and medium-sized enterprises. Today, even email is not considered as a mission-critical application in many enterprises. This is the mindset that needs to change with the commoditisation of IT.

Tomorrow: TCO Focus

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TECH TALK: Tech Trends: 3. TCO Focus

As spending on IT has increased in enterprises, there has been an increasing attention being paid to the total cost of ownership (TCO) of technology. It is not longer just the upfront cost paid for hardware and software that needs to be taken into account, but the overall cost that goes into administration of the systems deployed. As growth has slowed, increasing attention is being paid to the TCO of technology in organisations.

The four primary costs are hardware, desktop and infrastructure software, business applications and management overheads. This is where three developments can play a significant role:

Open-source software, especially on servers, can take care of the basic IT infrastructure in enterprises, making it especially affordable to small- and medium-sized enterprises in emerging markets like India.

Server-centric computing, complemented with thin clients, can help reduce the administration costs, along with simplifying the management of desktops.

Internet-based application service providers are making available business software-as-a-service, providing an alternative for those less willing to spend large amounts on upfront licence fees.

Open-source software

While open-source applications have done very well on the server, attention is now turning to the desktop. A recent story in the Wall Street Journal wrote:

Open-source software not only is relatively inexpensive, it may require less-powerful PCs for some applications. Frederick Berenstein is chairman and chief technology officer of Xandros Inc., a New York company that sells open-source desktop software. He says one hotel customer installed his company's desktop software on 150 reservation clerks' aged PCs at a cost of $5,100. He says the hotel estimated it would have had to spend more than $20,000 to upgrade to Windows XP software and $115,000 for new hardware that could handle it. He declines to name the customer.

Michael Silver, a desktop software analyst at Stamford, Conn.-based research and consulting firm Gartner Inc., says that some of his company's large corporate clients think Linux desktops could save them substantial money and work fine for certain classes of users who don't need the full range of desktop applications. For example, he says, Linux desktops can serve as a cheap alternative for employees who only need PCs for functions like e-mail and for checking their company's Web sites -- workers in call centers, say, who need to check product information and communicate online in-house, but who don't create documents, spreadsheets or presentations. For these employees, compatibility issues are minimal.

Linux also has gotten a boost over the past year from some large computer and software sellers that initially viewed it as suitable only for the back office. Among them are HP, which is starting to install Linux instead of Windows on some of the PCs it builds, IBM, and software makers Novell and Red Hat Inc., which have set themselves up recently as providers of Linux desktop programs.

Companies and independent programmers that work on improving Linux desktop applications have made big strides in making the software look more like Microsoft's applications, as well as in improving compatibility. With some open-source software, for example, a user has a choice between saving files in an Open Office format or saving in a Microsoft format with the familiar .doc or .xls file extension. That feature means that a Microsoft Word or Excel user can open a file created on open-source software without trouble.

If anything, the use of open-source software across the organisation is only going to grow, especially in emerging markets where piracy and non-consumption have been the solutions so far.

Tomorrow: Utility Computing

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TECH TALK: Tech Trends: Utility Computing

Server-based Computing

Server-centric computing is the second mechanism to lower the total cost of ownership. By moving processing and storage to a centralised computing platform, it becomes possible to reduce the investment necessary on the client computers and reduce the administration costs since only the servers need to be managed. Despite the benefits, thin clients have not become the norm. They make up only 1% of the worldwide computer sales. Is the picture likely to change in the future?

In developed markets, the issue is manageability rather than affordability. This is where thin clients can shine. The current generation of thin clients provide the performance of thick desktops without the attendant problems in terms of administration of the desktops. The next two years will see more than 200 million desktops being upgraded in the developed markets. This is an excellent opportunity for thin clients to be deployed in enterprises.

In emerging markets, thin clients can open up new markets. Unlike the developed markets all employees already have computers on their desktops, the computer penetration in emerging markets is very low. This is where thin clients combined with server-centric computing can provide an opportunity for today’s non-users to be equipped with computers. This is when organisations can start thinking of automating their business processes.

Software-as-a-Service

Look at some of the most successful Internet companies: Yahoo, Google, eBay and Amazon. One of the attributes common to all of them is their use of a scalable technology platform which has given them immense leverage. In the area of business applications, companies like Salesforce and NetSuite are aiming to do the same. They are building out applications on the server which businesses can use through a web browser. In addition, they are also fundamentally changing the software pricing model from a large upfront charge with annual maintenance fees to one which is subscription-oriented monthly fees. From the financial point of view of an enterprise, this reduces the entry barrier to deploying software applications.

ASPNews wrote recently about the new crop of application service providers (ASPs) and the benefits they offer organisations:

These companies have had several years now to develop their products to match -- and often exceed -- the functionality found in traditional client-server applications. They have built up their customer bases steadily, so that now the true rewards of a subscription-based model can be reaped.

They have also used the unique attributes of the model to their advantage, creating applications that are highly customizable, quickly and seamlessly upgradeable, and quickly implementable. New features that take a year to get into the development cycle of packaged software can be deployed in an ASP product in a matter of months.

The result is that there is now a core group of service providers who have proven their long-term stability, who have a mature product, and who can deliver features that the traditional vendors cannot, and they can do it for less.

In fact, the nature of the subscription-based model makes it more customer-friendly than an installed software model. Once a traditional software vendor sells the product and cashes its large up-front check, it has a minimal incentive to satisfy that customer. There are ongoing maintenance revenues to consider, but the big payoff has already come and gone, and the software company has moved on to new targets.

Sun too has now got into the game with its President Jonathan Schwartz making a statement recently that hardware will be free. While I do not see that happening, it is possible that hardware will be subsidised in enterprises much like handsets and gaming consoles. What is likely to happen is that the entire solution (hardware and software included) is likely to become available on subscription-basis for monthly fees.

Tomorrow: India Action: Computing as a Utility

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TECH TALK: Tech Trends: India Action: Computing as a Utility

India needs 100 million computers to build out a digital infrastructure across homes, the workplace, government and educational institutions. To make this mass-scale deployment of computers possible at price points that match that of a cellphone, India has to look at nothing short of a radical rethink of the computer architecture. Luckily for us, the ingredients are already in place.

Lets start with the question of what families and enterprises are likely to pay for computing. To get an idea, take a look at the spends on cellphones: about Rs 5,000 on a handset and Rs 500 per month for the service. In the case of computers, my estimate is that we could look at a 40% higher investment: Rs 7,000 ($150) for the computer and Rs 700 ($15) per month for the service of computing (which would have to include connectivity, since standalone computers in today’s Internet-centric world would have a very limited appeal). So, the challenge before us to make computing a utility is to make a solution available at these price points. How do we make this happen?

A combination of low-cost thin clients, server-centric computing, open-source software and bundling with a broadband connection is what is needed. The 5KPC is what needs to become the thin client. With an always-on connection between the client and the server, it is possible to make server-centric computing work seamlessly. In enterprises, the server will be on the local network, while for home users, the server can be at the premises of the broadband operator.

The monthly fee of Rs 700 needs to be split across the the 5KPC maker, the software provider and the broadband operator. The 5KPC maker will probably get Rs 50 per month, the software provider about Rs 200 per month for the base set of applications and support, and the broadband operator about Rs 450. In the case of the broadband operator, the monthly fee is almost similar to what cellphone providers get so it should be possible for them to provision the connection for that sum. In addition, users would have the option of getting additional services for incremental payments.

By putting together this package, we can build out India’s digital infrastructure over 5 years and transform our lives and the way business is done. This is the only way to remove many of the pain points that exist in our lives and our lower productivity in enterprises. In addition, this can also make a huge difference in the way education and healthcare, two focus points for the less privileged in India, are delivered across the country. Computing as a utility is what can build the real foundation for a New India.

Next Week: Tech Trends (continued)

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TECH TALK: Tech Trends: 4. Real-Time Enterprise

The dream of the real-time enterprise (RTE) has been there since the earliest software systems were written. Success has been achieved to varying degrees by different organisations. The challenge is what fuels the various business software companies and the looming consolidation in the industry (considering Oracle’s bid for PeopleSoft and the discontinued merger talks between Microsoft and SAP). The RTE is the Holy Grail of every business – getting a snapshot of the business as it is at this instant across the extended value chain. Companies like Dell and Wal-mart have probably made the maximum progress in moving towards this vision, and this is reflected in their dominance of the industries in which they operate.

In business, the differentiator is increasingly not in the machines used for production, but in the processes that make up the information refinery. According to Vinod Khosla, “Any business process within the enterprise, including relevant processes in use by its trading partners, must be reflected instantaneously in all enterprise systems. In other words, within a real-time enterprise, all information is real time.” An example of a real-time enterprise is Cisco, which is known to be able to close its books every day. Service-oriented architectures are helping glue the various information silos within the enterprise to create an event-driven platform, built around business processes. SAP’s Shai Agassi said: “Ten years ago the challenge was to reduce the time a market opportunity was spotted to the time a company was able to develop an appropriate product, get parts from suppliers and ship it to the customers. By and large we have brought that down. Companies can do that in two weeks to a month. The next phase will be about change management.”

An extract from the introduction of a book, “Realtime,” published by SAP as a tribute to one of its founders, Hasso Plattner says: “Real time is a clear path from stimulus through decision to an effective enterprise…The essence of the real-time enterprise is reducing the excise tax of inefficiency at all levels of a company.”

Ram Reddy wrote on the Real-Time Enterprise in the Intelligent Enterprise, saying that the RTE offers operational more than strategic benefits:

The RTE concept has been around for many decades. The goal of early information systems was to capture transactional and operational data as it was created and share it instantaneously across the enterprise and its supporting supply chain. But technology limitations made RTE elusive. And although RTE technologies in some form or another have been around for a while, their use has been limited to a specific customer service function — such as credit verification at point of sale. Even then, paying by credit card in certain parts of the world can take anywhere from 15 to 20 minutes. (Lacking real-time connectivity to a credit verification bureau, a store clerk must phone a credit bureau to get approval for the purchase.)

Now, the increasing availability of affordable high-speed network connectivity and extensible markup language (XML) and its derivatives is letting certain functions within the enterprise interact in real time. The business drivers for RTE technologies continue to drive adoption: Reducing the amount of time it takes for information to be transmitted between functional areas within an enterprise and its supporting supply chain will yield significant business benefits. RTE ideally would provide these business benefits at the operational, managerial, and executive levels.

RTE technologies promise meaningful and measurable business benefits — as long as the focus is on reducing cycle times and improving operational efficiencies. In some instances, especially in service industries, RTE technologies also can deliver managerial benefits by automating routine decision-making, such as credit authorization and approval. For manufacturing enterprises and supporting supply chains that have been exchanging information using traditional mechanisms such as EDI, RTE technologies will have to demonstrate a clear ROI from incremental time reduction to zero latency. Until the difficult problems of data cleansing, integration, and supplier relationships are solved, strategic benefits from RTE technologies will be limited.

Called by various names – Agile, Adaptive, Intelligent, Event-Drive – the RTE dream is now coming true as applications software, service-oriented architectures, mobility, business process management and personalised dashboards all come together.

Tomorrow: SOA

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TECH TALK: Tech Trends: Service-oriented Architectures

XML.com provides an overview:

SOA is an architectural style whose goal is to achieve loose coupling among interacting software agents. A service is a unit of work done by a service provider to achieve desired end results for a service consumer. Both provider and consumer are roles played by software agents on behalf of their owners.

This sounds a bit too abstract, but SOA is actually everywhere. Let's look at an example of SOA which is likely to be found in your living room. Take a CD for instance. If you want to play it, you put your CD into a CD player and the player plays it for you. The CD player offers a CD playing service. Which is nice because you can replace one CD player with another. You can play the same CD on a portable player or on your expensive stereo. They both offer the same CD playing service, but the quality of service is different.

The idea of SOA departs significantly from that of object oriented programming, which strongly suggests that you should bind data and its processing together. So, in object oriented programming style, every CD would come with its own player and they are not supposed to be separated. This sounds odd, but it's the way we have built many software systems.

The results of a service are usually the change of state for the consumer but can also be a change of state for the provider or for both. After listening to the music played by your CD player, your mood has changed, say, from "depressed" to "happy". If you want an example that involves the change of states for both, dining out in a restaurant is a good one.

The reason that we want someone else to do the work for us is that they are experts. Consuming a service is usually cheaper and more effective than doing the work ourselves. Most of us are smart enough to realize that we are not smart enough to be expert in everything. The same rule applies to building software systems. We call it "separation of concerns", and it is regarded as a principle of software engineering.

How does SOA achieve loose coupling among interacting software agents? It does so by employing two architectural constraints:
1. A small set of simple and ubiquitous interfaces to all participating software agents. Only generic semantics are encoded at the interfaces. The interfaces should be universally available for all providers and consumers.
2. Descriptive messages constrained by an extensible schema delivered through the interfaces. No, or only minimal, system behavior is prescribed by messages. A schema limits the vocabulary and structure of messages. An extensible schema allows new versions of services to be introduced without breaking existing services.

As illustrated in the power adapter example, interfacing is fundamentally important. If interfaces do not work, systems do not work. Interfacing is also expensive and error-prone for distributed applications. An interface needs to prescribe system behavior, and this is very difficult to implement correctly across different platforms and languages. Remote interfaces are also the slowest part of most distributed applications. Instead of building new interfaces for each application, it makes sense to reuse a few generic ones for all applications.

John Hagel has proposed the concept of service grids.

Tomorrow: ASPs

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TECH TALK: Tech Trends: Application Service Providers

The Economist, in a story on Salesforce.com, wrote:

The technical term for a company such as Salesforce.com is an application service provider (ASP). That may make anybody who remembers the boom and bust of the first generation of ASPs during the dotcom bubble sceptical. Those forerunners also promised a software revolution by hosting the software applications of companies. But they failed because they simply recreated each client's complex and unwieldy datacentre in their own basements, and never overcame the old problems of installation and integration with other software. With each new customer, the old ASPs had, in effect, to build another datacentre; there were few economies of scale.

The second generation of ASPs is different. When Salesforce.com signs up a new client, it simply creates an account on the software platform that ties together its farms of server-computers. In investor jargon, it therefore has huge operating leverage: the initial start-up costs for hardware and software were high, but since break-even each new client's revenues have been almost pure profit.
They use two main arguments against the ASPs. First, software as a service is much harder to customise for the special needs of big firms. Second, it is harder to make it work with a firm's existing software applications. “Companies want their CRM to integrate with their billing system and everything else,” says George Ahn, the CRM boss at PeopleSoft. Salesforce.com's motto—“No Software”—is thus hot air, says Mr Ahn, because it takes lots of software and fiddling to get it to link to the rest of a client's systems. “There is no magic pixie dust that makes integration go away.”

Mr Benioff [of Salesforce.com] shrugs. The evolutionary advance of the second generation of ASPs over the first is precisely that customers can now customise their pages, as easily as consumers arrange their Yahoo! or AOL pages to their liking. And the task of integration too has been solved. In fact, argues Mr Benioff, clients can do themselves a favour by letting Salesforce.com worry about hooking their various systems together. Increasingly, the vision says, all that users need to understand is how to navigate a web page, leaving them to get on with life. That is the same for Salesforce.com as for Google.

Data Mining

Extracting information on customers in real-time is the realm of data mining. The Economist wrote recently:

The field is now advancing on three new fronts. The first is the ability to mine data in real time, and use the results to adjust pricing on the fly, for example. The second is the vogue for ‘predictive analytics’, the art of using historical data not just to explain past trends, but to predict future ones. Finally, there is growing interest in systems that can analyse messy ‘unstructured’ data, such as text on the web, rather than just structured data stored in orderly databases.

Mike Rote, head of data mining at Teradata, a firm based in Dayton, Ohio, says a key element in making real-time analysis possible is that “data warehouses” are now integrated with the analytic software. In the past, the data lived in databases that were good at handling day-to-day transactions, but not so good at analysis. Preparing the data for analysis was a slow and laborious process. Another thing that has helped, says Mr Rote, is parallelism, where different processors within a large computer can tackle different chunks of data. This speeds things up and allows very large data sets to be analysed. For example, a large telecoms firm with a record of all telephone calls made by each customer may wish to monitor local and international calling patterns from day to day. This requires the rapid aggregation of a mountain of data that may take up many terabytes (millions of megabytes, or trillions of bytes)—just the sort of thing modern BI systems can do.

Tomorrow: India Action: Visual Biz-ic and BPM

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TECH TALK: Tech Trends: India Action: Visual Biz-ic and BPM

Indian companies can definitely capitalise on the real-time trends. The focus needs to be on the business process. Considering that most Indian enterprises have a very limited legacy of technology usage, there is now an opportunity to leapfrog to the intelligent enterprise. How is this going to happen? Think Visual Biz-ic.

Visual Biz-ic (a term I have coined) is about creating a integrated development environment for business processes. Just as Visual Basic from Microsoft transformed software development, Visual Biz-ic can create the platform for a similar transformation in how enterprises in India manage information flows across their extended enterprise.

Visual Biz-ic consists of a forms designer, process designer, process engine and reports generator. The forms designer allows the creation of interfaces to connect with databases and display the necessary information to users. The process designer is a graphical environment where the business flows are encapsulated. The process engine is the run-time execution system, which makes the processes come alive. The reports generator creates the custom reports that provide the necessary information to users.

Visual Biz-ic is complemented by four other components: a digital dashboard, which provides all the information that a manager needs to know on a single screen; an events manager which provides notifications of exceptions; an information aggregator, which provides a way to manage subscriptions to event feeds and display the appropriate events (in an email client or a browser); and a weblog to help team members share tacit knowledge.

Taken together, these components create an integrated platform for the “information refinery” in an enterprise.

Visual Biz-ic needs a process library. This can be done by considering the key 10-12 industries and the 8-10 types of companies in each industry. The 100-odd process models will be sufficient to cover most enterprises. Unlike the large enterprises which needs uniqueness in their business processes, most small- and medium-sized enterprises need completeness and integration via off-the-shelf components. IT is indeed a commodity for them. Visual Biz-ic’s built-in process models provide the necessary platform to cover 80-90% of their needs. If needed, they can easily tailor specific processes to their unique needs via the graphical interface provided by the process designer.

Visual Biz-ic is a dream. It does not exist. But if created, it can herald a transformation for Indian SMEs in terms of technology adoption. I can imagine a day in the not-so-distant future when companies will go to a website, navigate through the industry classification directory, select their type, and instantly get all the business processes for themselves. They can either then modify some existing processes that are currently being followed to match the standard or suitably modify the inherited processes for their needs. Either way, they have an integrated eBusiness suite necessary to make them into real-time enterprises in a matter of minutes.

Tomorrow: Security

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TECH TALK: Tech Trends: 5. Security

If there is one single word that is uppermost in the minds of IT managers today, it is security. The proliferation of viruses, spam and spyware have caused headaches aplenty. In addition, the ability to connect various company locations via a virtual private network (VPN) over the Internet also means that data needs to be sent securely. Firewalls, Intrusion Detection, Encryption have all become part of the technology vocabulary. If anything, the emphasis on security will continue to increase in times to come. The recent purchase of Brightmail, an anti-spam services provider, by Symantec for $370 million highlights the growing focus by vendors to provide integrated solutions in this space.

Business Week provides an overview: “Software and services that deliver early warnings of trouble on the Net are the latest big advance for the $27 billion computer security industry. Unlike traditional antivirus or intrusion-detection software that builds walls around corporate networks, early-warning systems scan the Web for new viruses and alert companies to the danger. Instead of waiting for the virus to hit, they dispatch instructions on how to close network holes, patch faulty software programs, or, like IronMail, automatically erect defenses against new outbreaks. While early warnings can't yet make corporate networks impervious to attacks, computer security experts predict they could eliminate as much as 50% of the damage from viruses over the next three years -- when used in conjunction with traditional defenses.”

Symantec's John Thompson elaborates in an interview with Business Week:

What's driving the desire by chief information officers around the world to invest in security is the change in the threat environment. Our Internet Security Threat report clearly identified three important trends: the rate of propagation in virus and worm activity is accelerating, the new number of [computer] vulnerabilities is also accelerating, and there's a desire on the part of the malicious attackers to perpetuate this stuff more frequently then ever before. That's driving not just large companies, but midsize firms and individuals to want to protect themselves from this newfound activity.

What has changed is the relative proportion of [IT] budgets that companies are contemplating to allocate to security. Not too many years ago, it wasn't unheard of for a company to allocate less than 2% of their IT spending to security. Today, that's starting to creep up to the 4% to 5% range. And some of the enterprises that are more digitally oriented -- financial services, insurance companies, and health care -- are starting to push up into the 10% to 12% range. That's an important trend for not just our business, but the [computer-security] industry in general.

A glimpse of the future comes from Cisco’s recent release of products which takes steps towards a “self-defending network”. A News.com report wrote:

The release is the first phase Network Admission Control (NAC), a collaboration program between Cisco and antivirus companies. Through this program, Cisco has developed technology with three antivirus specialists--Network Associates, Symantec and Trend Micro--that will let Cisco's networking products communicate with antivirus products. Devices running NAC technology will allow network access only to compliant and trusted endpoint devices, like PCs and PDAs (personal digital assistants). NAC can also restrict access of noncompliant equipment. This decision can be based on information about the endpoint device, such as its current antivirus state and operating-system patch level… Extending security to these network elements helps Cisco fulfill its vision of protecting the entire network. Eventually, all Cisco routers and switches will be checking end devices connected to them for worms and viruses. And a remote user will not be able to connect to the corporate network unless his or her device is free of viruses and worms.

Next Week: Tech Trends (continued)

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TECH TALK: Tech Trends: India Action: Integrated Security

Indian organisations need to take security far more seriously than they currently do. There are many elements which need to be understood and acted upon. While security services can be expensive to deploy, the solution of not using them can be even more costly. Security needs to be considered at four levels:

Internet: An Internet-based can help filter email for spam and viruses. Considering that the majority of email received is spam, this can help kill spam earlier in the value chain. In India, this also helps save on bandwidth. The same applies for viruses. In addition, ensuring that most spam does not reach the user also helps reduce the frustration levels in having to deal with spam.

Local Network: The perimeter of the enterprise needs to be guarded. A security appliance which provides the essential functionally of a firewall, virtual private network and intrusion detection is what enterprises needed. This could also be integrated with the messaging server, and complemented with local anti-virus and HTTP virus scanning. Care must be also taken to put in place the right security policies.

Desktop: User actions at the desktop are a source of vulnerability. By clicking on innocuous-looking attachments in email, viruses can be unleashed. In today’s world of connected networks, all it takes is one unprotected computer to create havoc. Server-centric computing with open-source applications on the desktop can help almost eliminate the threat at the local desktop level.

Application-level: An oft-ignored area is application security. Since more and more companies are putting their business online, it is important to also ensure that web applications are protected. A presentation by Jerry Berkman captures the concepts involved.

Looking at from another side, there is an opportunity for Indian software companies to create security solutions and services and offer them to organisations globally. Walter Mossberg provides a sense of the opportunity:

[Today,] you have to buy each of [the security components] separately, because each takes care of only a narrow slice of the growing problem of criminals and slimeballs who want to invade your computer. Antivirus programs can't stop hacker intrusions or recognize spyware. Firewalls and spyware programs can't detect viruses. Windows updates close vulnerabilities the criminals use, but don't clean up any damage done.

Yet, few consumers really care whether an invasion is classified by the experts as a virus, a worm, a Trojan horse, a browser hijacker, spyware, adware or just spam. Focusing on the difference between a virus and a spyware program is like focusing on what kind of lock-picking equipment was used by the burglar who just broke into your home. The experts may care, but all you know is that you feel invaded.

What we consumers need is a simple, unified protection plan to counter all of these threats. And the computer, software and Internet industries have badly failed us in this regard. They would rather dump the security mess in the laps of users than solve it at the level where a solution really belongs: in the operating system, or the hardware, or the online provider's servers.

So, anyone up to it?

Tomorrow: e-Business

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TECH TALK: Tech Trends: 6. e-Business

The Internet has become a key ally in doing business, or what Paul Saffo has called, “trading in a world of electrons.” The Internet is impacting many industries – not just the likes of books, music, recruitment and finance, but also more complex ones with deep back-ends like travel, real estate and telecom. The Economist wrote in a recent survey on e-Commerce: “E-commerce is already very big, and it is going to get much bigger. But the actual value of transactions currently concluded online is dwarfed by the extraordinary influence the internet is exerting over purchases carried out in the offline world. That influence is becoming an integral part of e-commerce… A company that neglects its website may be committing commercial suicide. A website is increasingly becoming the gateway to a company's brand, products and services—even if the firm does not sell online.” In India, too, we are seeing an increase in online commerce. The Indian Railways have been at the forefront of this through their online booking website. Jet Airways too has launched e-ticketing. The world of e-business is here in full force.

Back in the late 1990s when the Internet hype was at its peak, the belief was that the Internet would change everything. Every industry would be transformed. If something wasn’t on the Internet, it didn’t exist. Then, reality set in. While the impact of the Internet has not necessarily been earth-shattering, it hasn’t been something to scoff at either. There are many businesses which the Internet has made a difference too. By reducing transaction costs, it has helped consumers get lower prices and forced producers to become more efficient. By bridging geographical barriers, it has allowed companies to open up new markets. Search engines like Google have allowed small businesses to reach out to potential customers far more cost-effectively than other media. Electronic marketplaces like eBay have seen many build businesses around them.

The Economist wrote how the Internet is becoming a key part of the search-find-obtain process for consumers:

What is going on…is arbitrage between different sales channels, says Mohanbir Sawhney, professor of technology at the Kellogg School of Management in Chicago. For instance, someone might use the internet to research digital cameras, but visit a photographic shop for a hands-on demonstration. “I'll think about it,” they will tell the sales assistant. Back home, they will use a search engine to find the lowest price and buy online. In this way, consumers are “deconstructing the purchasing process”, says Professor Sawhney. They are unbundling product information from the transaction itself.

One of the biggest commercial advantages of the internet is a lowering of transaction costs, which usually translates directly into lower prices for the consumer. So, if the lowest prices can be found on the internet and people like the service they get, why would they buy anywhere else?

One reason may be convenience; another, concern about fraud, which poses the biggest threat to online trade. But as long as the internet continues to deliver price and product information quickly, cheaply and securely, e-commerce will continue to grow. Increasingly, companies will have to assume that customers will know exactly where to look for the best buy. This market has the potential to become as perfect as it gets.

As with any new infrastructure technology, it takes time for its full potential to be realised. The Internet is now reaching the stage where it is becoming a utility for many aspects of business, especially in the developed markets. Increasing broadband availability will only accelerate the trend. As the ecosystem around the Internet gets put in place, we are moving closer to the future where e-business and e-commerce become synonymous with business and the commerce, and the “e”-prefix simply disappears.

Tomorrow: The Next Wave

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TECH TALK: Tech Trends: The Next Wave

It would have been hard to imagine people buying jewelry online. Yet, according to Business Week, this is just what is happening as a new wave of transformation impacts industries:

Jewelry e-tailers are the leading players in the Web's second act. Selling diamonds, double-strand pearl necklaces, sterling silver bangle bracelets, and more, online jewelers made up about $2 billion of the industry's $45 billion in U.S. revenues last year. Startups such as Blue Nile, Ice.com, Diamond.com, and now Amazon.com are textbook cases of how the Web fundamentally undercuts traditional ways of doing business. The secret? Knock out the middlemen and expensive stores to lower costs, then slash prices. Amazon.com Inc. for example, is betting it can make money on 15% markups instead of the industry's usual 60% to 100%. Amazon charges $1,000 for a pair of oval emerald and diamond earrings that it gets from a supplier for $850. Traditional jewelers typically charge $1,700. "We believe over time customers figure these things out," says Thomas J. Szkutak, Amazon's chief financial officer.

The diamond market is where changes are happening first, and Blue Nile is the leader there. The five-year-old Seattle company has become the eighth-largest specialty jeweler in the U.S. Last year, sales jumped 79%, to $128.9 million, and net income hit $27 million. Selling diamonds for up to 35% less than rivals, Blue Nile is not just profitable -- it has higher margins than No. 1 chain Zale Corp.

Blue Nile packs a punch by streamlining a famously byzantine business. It has just 115 full-time staffers and a 10,000-square-foot warehouse. To sell $129 million worth of jewelry, a chain would need 116 stores and more than 900 workers, estimates analyst Ken Gassman of Rapaport Research. Blue Nile also bypasses the industry's tangled supply chain, where a stone can pass through five or more middlemen before reaching a retailer. Instead, Blue Nile deals directly with major suppliers through its own network online.

To get to where they are, the Net upstarts had to defy conventional wisdom that diamonds couldn't be sold online. The companies solved this problem by giving people the same information a jewelry expert would give them. They dish up educational guides in plain English and independent quality ratings for every stone. For example, a customer at Diamond.com can pore over the rating scales for cut, clarity, and color, pick out a one-carat stone with the preferred criteria -- and then shop around for a better price. These resources are now standard practice, as is a 30-day money-back guarantee.

Self-Service Web

What can small businesses and retailers do to leverage the Internet and the presence of their customers online? Craig Danuloff writes about the emergence of the self-service web and what businesses need to do:

The brief history of the internet is that people are getting more and more comfortable making increasingly complex buying decisions entirely based on a web-based interaction. Several years ago, the argument went, books and CDs were the first ecommerce success stories because people knew what they were buying so the 'trust' hurdle was low. It took a few years for online clothing and financial transactions to take off. Today there is virtually nothing that isn't sold online - and in substantial quantities.

If your business isn't finding customers making purchase decisions based solely on interactions with your web site, then your web site needs more work. The first step: ask your sales people to list the most common initial questions and issues that customers bring when they first make contact. Take a look at your site and see if the answers to these questions are already there and need improvement, or (as is more likely) these issues aren't yet addressed online. Improve the site to cover this ground, and re-poll the sales people in a few weeks. Repeat this cycle until the first thing your sales people hear when they pick up the phone is "I'd like to place an order".

Then move ordering online...

Tomorrow: The Enablers

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TECH TALK: Tech Trends: The Enablers

There are a number of enabling factors for this new wave of interest in e-business:

Search Engines: Five years ago, despite the presence of many search engines, it was hard to find things online. And then along came Google. Search was now again fun, with relevant sites showing up in the first page of the results. Over the past few years, search technology has improved by leaps and bounds. The other thing that search engines like Google and Overture (now owned by Yahoo) did was that they gave advertisers a way to link their ads to the searches being done by people. This has given small businesses with limited budgets a great way to reach out to potential consumers, and pay only for performance (on the ad clickthroughs). What the likes of Google did have done is balance the needs of the various entities, according to David Evans and Peter Passell: “Google's most impressive achievement, we would argue, was to use its technology edge to create a balanced, "multisided" market -- that is, to satisfy very different classes of customers whose demand is nonetheless interdependent… Good technology was certainly a prerequisite to [Google’s] success. And in light of Web surfers' notorious reluctance to pay for anything, it's no shock that the search engine users' side of Google get the service at no charge. The company's singular achievement was linking search results to advertising in a way that was both productive to advertisers and inoffensive to users of the search engine.”

Backend Digitisation: Companies have also now managed to digitise significant portions of their value chain, making the entire process much more efficient. This makes it possible to have near real-time information on inventory across the extended enterprise, allow customers to query status of their orders online, and use customer-relationship management software to build deeper relationships. What has made this digitization process is the commoditisation of IT, making it affordable and standardized to even the smaller businesses, who have been the weak links in the information value chain.

Small Business Push: Under pressure from the online giants, small businesses have been fighting back, realizing that unless they use the Internet, their customers will simply go elsewhere. Yahoo Stores, Google’s AdWords and eBay have given them the ammunition to fight back with a deeper online presence. Esther Dyson wrote recently in a Release 1.0 on small businesses (April 28, 2004) on why this is happening now: “Broadband is becoming prevalent, especially in businesses, and their customers are online. It’s possible to outsource almost any noncore function, and small companies can get purchasing economies of scale, not by joining some specialized exchange, but simply by searching online.” What the Internet is helping small businesses do is to find growth and increase revenues.

Local Search: The other big change that’s happening is how consumers seek out local businesses. So far, it has been primarily via yellow pages. This is changing as local search offerings are enriched. It is now possible to search for businesses in a targeted geographical area, see the locations of businesses on maps, and get to their websites. In turn, businesses can finely target their ads. In the coming months, as the publish-subscribe web takes shape, it will be possible for consumers to also receive notifications on specific events in their neighbourhood.

Taken together, these developments are helping re-shape the world of e-business to a more personalized and deeper experience for buyers, and a more cost-effective solution for sellers.

Tomorrow: India Action: Create STIM and PIN-News

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TECH TALK: Tech Trends: India Action: Create STIM and PIN-News

In India, e-business has lagged primarily because of the lack of an Internet infrastructure in the country. There are signs that this is going to change in the near-term as cheaper computers combined with affordable always-on broadband connections will bring more consumers and businesses online. India’s current base of 17 million users is expected to grow rapidly and touch 60-100 million in the next 3 years. Add to this the rapidly growing mobile users (already at 35 million) and India could be set for a boom in e-commerce in the coming years. A harbinger of this was the recent entry of eBay into India via the acquisition of Baazee.com for $50 million. Given this context, there are two platforms which can help dramatically accelerate e-business in India: the creation of an SME Trade Information Marketplace (STIM) and PIN-News.

STIM is about helping small- and medium-sized enterprises build and maintain an online presence, and connect with each other. By using two-way publish-subscribe technologies (wikis, weblogs, RSS aggregators), it will become much easier for SMEs to get out of the marketing trap that they find themselves in and grow their business. Each business needs to have an online presence comprising of four components: an “About Us” page in the form of a wiki which can be easily edited, a “What’s New” page which has the new developments at the company both on the buy and sell side, a meta information page which gives contact and industry information and can be used by search engines to filter results, and a set of subscriptions based on keywords or topics which deliver the relevant updates from other SMEs, thus helping connect one business to other based on interest.

PIN-News is about building a bottom-up community information system. It is built around PIN codes. Neighbourhood events can be posted on to specific pages, organised in a weblog-format. By using standardized forms to do the post, it is possible to capture the information in XML format and use a matching engine to send out alerts to people. For example, if I am interested in book exhibitions or special offers, I can set up an alert on a few PIN codes around my home and workplace. When the book shops in the area do their updates (as part of STIM), I can be immediately alerted. PIN-News thus fills the gap in communicating dynamic information to people who are most likely to benefit from it.

Taken together, STIM and PIN-News can help make the Internet a utility in the lives of Indians and give the ones who do not have access a reason to get connected. It leverages the fact that much of our lives is spent in neighbourhoods and yet we know so little about it because our current media cannot get narrow enough to cost-effectively reach us. This is where the Internet and electronic “information marketplaces” can make a difference.

Next Week: Tech Trends (continued)

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TECH TALK: Tech Trends: 7. Collaboration

Productivity emerges from teams of people working together to achieve a common goal. Even as computers have made individuals more efficient, it is only now that software is emerging to make teams work much better together. Categorised as social software, these solutions are using bottom-up knowledge sharing and management solutions like weblogs and wikis to ensure that the “whole” organisation is greater than the sum of its parts. The Economist had this to say about wikis recently: “Wikis offer a middle ground between e-mail and a conventional web page, which makes them useful for collaborative projects, particularly those involving far-flung teams. Rather than maintaining multiple copies of a document and sharing ideas by e-mail, a wiki allows members of a team to pool their thoughts more easily.” Blogs and RSS, an XML-based syndication format, even found a mention in a talk given by Bill Gates to CEOs recently. Gates said that blogs could be a good way for firms to tell customers, staff and partners what they are doing. He said blogs had advantages over other, older ways of communicating such as e-mail and websites.

Jon Udell, writing in InfoWorld, wrote about the “social enterprise”:

We are social animals for whom networked software is creating a new kind of habitat. Social software can be defined as whatever supports our actual human interaction as we colonize the virtual realm. The category includes familiar things such as groupware and knowledge management, and extends to the new breed of relationship power tools that have brought the venture capitalists out of hibernation.

Computer-mediated communication is the lifeblood of social software. When we use e-mail, instant messaging, Weblogs, and wikis, we’re potentially free to interact with anyone, anywhere, anytime. But there’s a trade off. Our social protocols map poorly to TCP/IP. Whether the goal is to help individuals create and share knowledge or to enrich the relationship networks that support sales, collaboration, and recruiting, the various kinds of enterprise social software aim to restore some of the context that’s lost when we move our interaction into the virtual realm.

In networked environments, everything we do can be monitored. Absent the natural cues that establish social context — it’s hard to see groups form at the water cooler or hear voices in the hallway through e-mail or IM — social software systems ask us to strike a bargain. If individuals agree to work transparently, they (and their employers) can know more, do more, and sell more.

Making groups more productive is the next big challenge that is being tackled by many companies. The focus now has been on tools that make writing – individually and in teams – easier. This is where blogs and wikis are rising in popularity. They do away with the rigidity that the previous generation of collaborative and knowledge management solutions had. A term used by Jonathan Spira of Basex to describe the new set of solutions is CBK: “Collaborative Business Knowledge is the intersection of Knowledge Management and enterprise communities and collaboration tools. Basex invented the term because KM wasn't broad enough (KM does not emphasize the collaboration aspect enough) nor was communities (which doesn't emphasize enough the capture of knowledge.)”

Tomorrow: A Dream Workspace

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TECH TALK: Tech Trends: A Dream Workspace

Sometime ago, Dina Mehta and I had met a large Indian company who wanted to make their Intranet more effective, and making the various teams more productive. These notes, made by Dina, capture what would be the ideal information workspace:

We asked the question - what is the dream system you desire - and that was really interesting. What it revealed is the need is not as much for a Content Management System as much as it is for a system that allows them to dialogue and converse effortlessly and seamlessly, brainstorm on ideas and projects, in a manner that is as 'face-to-face' as possible. Here's the gist of what an employee told us :

I know X is not here in my office (in Mumbai) but in another city. I want to be able to talk to her, as if she's in the same room as me. I want to be able to feel all the nuances in talking with her - its got to be touchy-feely and not a cold email or a phone call where I know the time ticking away means my bottomline suffers.

Underlying what this employee told us is her desire for flow. Easy, hassle-free, inexpensive flow. Flow that allows a dialogue as if the other person is right there with her.

Incorporating :

Presence indicators

Communications system

Collaboration space

One of the key requirements - really a very simple one to have, but something so sorely left out in the current system, is a presence indicator. Much like in current IM systems - telling us who's available, who's logged in and therefore present in the office, who I can ping for a query, and ensuring that a response is received. In the case of his organisation, currently, they'd send an email, wait for a response, followed by more emails as reminders, and finally in sheer frustration, pick up the phone and make a call - which can be expensive if outstation (as is the case very often in their line of business) and does not always ensure that they will get a response - what if the person is away from the office?

Tied into this requirement for presence indicators is the need for 'real-time' 'live' communication. This is where voice applications, small cam shows, conferencing facilities would be useful. Skype with its conferencing facilities has really shown its possible to do this with terrific quality. Combine this with some of the 'soft profiles' that make a person far more approachable than just another colleague, like those on Ryze or Orkut.

And finally the need for collaboration spaces - where one can play around with Wikis and Blogs. Not having to rely on a whole host of asynchronous emails - or bothering to archive them systematically - these tools can do that automatically for you. And more food for thought pinging its way in through RSS in Newsreaders.

Picture this scenario - you have a project on and are racking your brains about how to approach it - you check your presence indicator - see who's available - ping them with a request for conferencing - hitch up the webcam, enable voice - and bingo - in minutes you have a virtual team ! Record the conversation, take notes on the wiki, synthesize it in a team blog which has comments enabled, feed in current thinking on the topic from your newsaggregator, and you have real flow. And, ridiculously easy group-forming to borrow a wonderful phrase from Clay Shirky.

We aren’t there yet, but getting close. A combination of new technologies are coming together to make it easier for us to work together in groups – be it in the workpace or among friends and family.

Tomorrow: India Action: Create Contentrix

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TECH TALK: Tech Trends: India Action: Create Contentrix

There is change afoot in the world of content creation and consumption. We are moving from a one-way, broadcast world to one that is two-way, interactive and based on publish-subscribe technologies. Weblogs and wikis make mass publishing very easy. RSS enables the syndication of content such that consumers of content need not go to websites (or weblogs) trying to figure out what has changed. Taken together with other interactive technologies like IM (presence), social networking, FOAF (friend-of-a-friend), the time has come to think about a new content platform, which can better facilitate interaction between groups. This is what Contentrix is about. Think of it as the next-generation content lifecycle management platform.

Even today, email remains the least common denominator in terms of sharing information and for many, even “collaborating” together with others. For a long time, email has worked well. But today, given the problems caused by spam and virus on one side, and the explosion in messages that overload us, email’s limitations are becoming apparent. Simultaneously, we are seeing the emergence in communities of alternative interaction technologies like blogs, wikis and RSS aggregators. These form the building blocks for Contentrix.

Perhaps the most important aspect of the new age content is that of community involvement. No longer does an idea have a finality to it – readers can build on it interactively among themselves. I have seen this happen with some of my blog posts. It happens regularly on community forums like Slashdot. Content development has become iterative and continuous. Readers are no longer passive consumers as has happened with most of the media sites. The difference between authors and readers is breaking down.

Contentrix would provide an integrated content creation and consumption platform, built around blogs, wikis, search, social networking, instant messaging, a publish-subscribe backend, syndication and notification via RSS, IRC and visualisation. It would allow any user to create a content vertical, with control on who it is available for (public, private or a closed user group). This would be the foundation on which next-generation vertical portals would get built. Contentrix would be the building block for constructing the Memex.

Contentrix could add tremendous value to a weblog by enabling the community to start discussion threads around blog posts. It could enhance a corporate website by providing an RSS feed of the updates thus allow near real-time notification to interested readers. For specialised vertical sites, Contentrix would provide an out-of-the-box solution to leverage the knowledge of the readers and build in reputations. For enterprise Intranets, a platform like Contentrix would offer a bottom-up mechanism to create an information flow which can amplify the knowledge embedded in the staff.

Contentrix does not exist in its entirety. The various elements needed to make it happen do. Building Contentrix is an interesting opportunity for Indian software companies. It could also be used to create the next-generation Indian portals.

Tomorrow: Always-On World

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TECH TALK: Tech Trends: 8. Always-On World

Two years ago, it would have been hard to imagine that Indians would be buying cellphones at the rate of nearly 2 million a month. Similarly, today, it is hard to imagine a broadband India – but that is exactly what we are about to see. The next couple years will see Indian consumers and enterprises enveloped in ubiquitous, high-speed connectivity from multiple sources – wireless, DSL, cable and satellite. Complement this with WiFi-enabled laptops and smartphones, and the always-on world is at hand. This will necessitate a change in the not just employees work, but also the interactions between enterprises and customers. Orange has recently launched a service which allows their GPRS users to access their mailbox on a Microsoft Exchange server via Outlook from the cellphone itself. In India, Reliance Infocomm's data services have become very popular with laptop users as they provide instant access from anywhere. In the coming years, we will start seeing radio frequency IDs (RFIDs) which will allow every machine, device and object to start communicating with others. So, a shampoo bottle could notify a smart shelf in a supermarket when it is picked up a customer, causing a message to go out to the manufacturer who could then replenish supplies. The world of a pervasive, always-on network is here, with far-reaching implications.

The world of Always-On is being driven from multiple directions:

Access Devices: 2004 will see cellphone sales of nearly 600 million. Each cellphone makes its owner instantly connected to a worldwide network. As more and more features are packed into cellphones, they are becoming cameras, radios and TVs, gaming devices, and even computers. Smart radios are being embedded into all kinds of devices. Also, microchips embedded in products are creating an “Internet of things.”

Access Infrastructure: A mix of broadband and wireless technologies are providing bandwidth aplenty anywhere and everywhere. From WiFi to WiMax, Zigbee to Ultrawideband, Mobile-Fi to 3G, there is no space which can remain unwired and no device which can stay unconnected. Backhaul networks on fibre are creating a world where it is now even more economical to carry voice over packet-switched IP networks. It is a world where, according to one of the Skype co-founders, telcos will become software application providers.

Applications: The Always-on world provides a platform real-time everything. Combined with publish-subscribe, it will create a world where individuals and business users can be instantly notified of exceptions. So, instead of me checking every few hours to check the status of my waitlisted train ticket has been confirmed, I will be notified on my cellphone (or via email and IM) as soon as it is confirmed.

Nicholas Negroponte said in a Business Week interview, taking the developments to their logical conclusion: “Peer-to-peer is key. I mean that in every form conceivable: cell phones without towers, sharing leftover food, bartering, etc. Furthermore, you will see micro-wireless networks, where everyday devices become routers of messages that have nothing to do with themselves.”

The world of always-on in a natural manifestation of the convergence of various industries – computing, telecom and consumer electronics. It is a world which telecom- and computing-poor countries like India can leapfrog to, with the right vision and will. Just like South Korea has done.

Tomorrow: South Korea Leads

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TECH TALK: Tech Trends: South Korea Leads

South Korea provides a glimpse of the Always-On World, as Business Week writes:

Glitzy new services by mobile carriers are the rage in South Korea, which has emerged as a test bed for the global wireless industry. Cell phones in Korea shuttle data at broadband speeds, up to 2.4 megabits per second. Increasingly, young commuters are shunning newspapers and books in subways and gazing instead into phones for TV, videos, and music downloads. And phone execs are racing to offer services that do everything from trading stocks to finding restaurants. Why? In a country where 75% of the population already talks on cell phones, new data services are the only path to growth. "What's important is who could be more imaginative or creative," says SK Telecom senior manager Park Tae Jin.

At the forefront of the race is SK, with 52% of the wireless market. Some 2.5 million SK customers, including Han, have signed up for its June phones, which cost $350 to $550 and are specially designed for multimedia. These handsets, made by local manufacturers as well as Motorola, run processors three times faster than normal phones and have enough memory to download nine hours of music or two hours of video. The payoff? June subscribers spend more than twice the average for data. Han's bill runs an average of $135 a month.

Real-time TV access is popular -- but only for those who can afford it. To lower costs, SK is looking to the skies. In March, it launched a satellite that will beam DVD-quality video to a new phone using digital multimedia broadcasting technology. The service, which provides access to 39 channels of movies, news, and information, will go for a fixed monthly fee of $10 to $12.

Phones are doubling as credit cards as well. Here's how they work: Instead of pulling out a wallet, a shopper points the cell phone to a tiny terminal next to the store's cash register or the ticket machine in the subway. An infrared beam sends the user's credit-card information straight to the card company. The phone asks for a personal ID number to close the purchase. "It's great to be able to walk into restaurants and shops without worrying about leaving your wallet behind," says Park Sang Eon, a marketing manager at a logistics company who purchased a credit-card phone last October. "I hope the phone will also work as my driver's license and my ID card in the future."

News.com wrote recently about the boom in online gaming in South Korea, thanks to the proliferation of broadband networks:

The seemingly overnight emergence of online gaming serves as a successful case study in South Korea's drive to strengthen its flagging economy with new technologies. An unprecedented program to build a national broadband network has provided the fast Internet connections required for online gaming to thrive. The digital pastime has, in turn, created new businesses looking to meet the demand for more products.

More than 28,000 gaming parlors operate throughout the country, according to various estimates--one for every 1,700 residents. Three cable TV channels are dedicated exclusively to covering tournaments and how-to shows on games like Blizzard Entertainment's "StarCraft," a real-time strategy game not unlike the Milton Bradley analog classic "Stratego."

The gaming boom also shows how quickly a relatively new technology can inspire widespread cultural changes. In just a few years, online games have become serious competition to movies for mass entertainment in South Korea, despite the stereotypical images of game parlors as ill-lit rooms filled with cigarette smoke and budding criminals.

"PC baangs," as the parlors are known, are usually clean and wholesome places where teenagers often go for dates. Last year, Webzen invited gamers and their families to an event to help dissipate some of the negative reputations of online gaming in downtown Seoul. Around 30,000 people showed up.

Next Week: Tech Trends (continued)

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TECH TALK: Tech Trends: India Action: Replicate the Famous Five

If there are five devices that define the new world in the developed markets, they are Vonage VoIP box (and service) which uses the Internet to route calls and has dramatically cut the cost of phone service for Americans, TiVo’s personal video recorder which timeshifts television, Apple’s iPoD which delivers music wherever and whenever we want, the Treo 600 from PalmOne which is a smartphone, and Microsoft’s Xbox which is a gaming console. Can we create similar such devices for the Indian market?

Let’s start with Vonage. VoIP can help cut costs of telephony further in India and give a big boost to the rollout of broadband networks. There’s plenty of backhaul fibre that exists in India. The challenge is in the last (or first) mile. That has still been the domain of the local phone company (primarily BSNL and MTNL). Telephony is where the money is today. By creating a box which can work with cable or DSL lines and route calls over the Internet, competitors get the necessary incentive to deploy networks with good revenue potential until the time that data services start picking up.

A TiVo-like device is bound to do well in India, given the craze for television and the evening soaps! Families will no longer have to make a choice on which programme they will have to watch. This device could also be used to deliver other digital content (education, for example). Again, it leverages the broadband infrastructure and provides services that people are likely to want to pay for.

Music is part and parcel of our life in India. Thanks to the movies, there is a song for every occasion. Music consumption is now largely limited to radio or television. The iPod-like device can now be used to deliver music on a handheld device. More importantly, it can create an additional revenue stream for the music companies.

The Treo 600 with its small keyboard (like the Blackberry) can be used as a computer-on-the move with a thin client interface. There is plenty of “dead time” that we face in India. A device that can become an adjunct to the computer, besides serving as a cellphone, can work wonders.

Gaming hasn’t really taken off in India, even though India has the world’s largest youth population. Piracy has been a deterrent, along with the costs of gaming consoles and the games themselves. A device, which can complement an online gaming service and build aspects of the console into a residential gateway or a set-top box, can help launch a new industry.

There is another agenda in creating these devices. Along with low-cost thin clients, these five devices can spur the development of a local hardware industry. The key in all these cases is to have price points which are very affordable in the Indian context. By building two or three multi-purpose hardware platforms for consumer devices, India can start to define, rather than follow, the consumer market.

Tomorrow: Outsourcing

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TECH TALK: Tech Trends: 9. Outsourcing

India has been in the limelight over the past year for the business process outsourcing that international companies have been doing in order to cut their costs and sharpen focus on their core businesses. Some Indian companies too have started to outsource their non-core operations. Bharti recently decided to outsource its IT operations to IBM in a multi-year, $750-million, deal. Various banks are also starting to do the same. Think of this as the IT equivalent of the “build-own-operate” model common for infrastructure development.

Thomas Friedman writes how globalisation 3.0 is making outsourcing possible: “These work-flow platforms can chop up any service job — accounting, radiology, consulting, software engineering — into different functions and then, thanks to scanning and digitization, outsource each function to teams of skilled knowledge workers around the globe, based on which team can do each function with the highest skill at the lowest price. Then the project is reassembled back at headquarters into a finished product. Thanks to this new work-flow network, knowledge workers anywhere in the world can contribute their talents more than ever before, spurring innovation and productivity. But these same knowledge workers will be under more pressure than ever to constantly upgrade their skills in this Darwinian environment.”

John Hagel looks at the wider view: “Offshoring is not just about cost reduction through wage rate arbitrage. Instead, it is a powerful way to improve performance by accessing distinctive resources and accelerating capability building. Bottom line: offshoring will force all of us to become more specialized and to make some difficult choices to exit certain activities along the way. In fact, by viewing offshoring too narrowly as simply a way to access cheap labor, companies risk unleashing a vicious cycle that will lead to value destruction.”

Outsourcing is a fundamental trend, and there is little any US government is going to be able to do anything about it. What is clear is that companies globally are relooking at their cost structures and leveraging the commoditisation that has taken place in IT as well as services to focus on what they do best. It is hard to overlook a 30-70% cost savings for certain processes, but that is just the start. What outsourcing also allows is to also fundamentally redesign business processes. This is what companies like IBM are onow offering the global majors.

From the Indian viewpoint, outsourcing has been the key driver in making it a critical component in the global value chains of organizations. The Economist wrote about four trends in the context of Indian outsourcing: “Some multinational firms with ‘captive’ offshore operations in India, such as Phoenix, are thinking of selling them—in effect, outsourcing through divestment. Second, young, fast-growing India-based firms, flush with cash and besieged by would-be investors offering more, are thinking of acquisitions as a way to sustain growth. Thirdly, while these upstarts race to expand in their target markets, the big western IT consultancies are reversing the process. Last month, mighty IBM bought Daksh, one of India's biggest call-centre firms, with about 6,000 employees. Finally, as these multinationals bulk up in India, extending the range of their wares to include call-centre and other BPO operations, Indian firms such as TCS have been matching them—as well as expanding overseas.”

Tomorrow: The Future of Services

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TECH TALK: Tech Trends: The Future of Services

Business Week writes that services is moving beyond outsourcing:

While doing a lot of work in low-wage countries is a necessity for most tech-services outfits, it's not the only way to trim labor costs. Smart companies are coming up with creative ways of automating their operations, reusing valuable technology, and streamlining business processes. In this most labor-intensive part of the tech industry, they're reducing the number of bodies they need for everything they do -- whether it's operating data centers, consulting, writing software, or running their clients' customer-service and accounting operations. The changes not only make them more efficient, they result in more effective services.

Writing software traditionally has been a productivity sinkhole for services outfits. Now, rather than starting from scratch with each new project, companies are using Web technologies to package complex pieces of software into reusable components -- like so many Lego pieces. Project leaders can pull the pieces they need from online libraries, mix and match to produce a desired set of functions, and get their work done with much less effort.

Even business processes themselves can be packaged and used over and over again. This is crucial in the fast-growing corner of the services world called business-process outsourcing. When companies take over human resources, customer service, and accounting for their clients, they routinely promise that they can do the same work for 25% to 40% less money.

The trick for services outfits is to automate their operations without alienating their customers.

IBM’s David McQueeney talks to Business Week of the new science of services:

A new science is being invented, which is an outgrowth of computer science but also an outgrowth of research and project management and a bunch of other things. In a few years we'll look back and say this was the beginning of the scientific and technical base underneath services.

Clients always want the maximum value from their investment in information technology with the minimum need to be IT experts. It used to be they had to have huge inside IT staffs. They had to know every detail of all the plumbing. But over time as we as an industry get better and move up the stack of technology abstractions, we can give them the power to change their business and require them to be less and less the experts -- and focus their energy on the things that are higher in the food chain.

This is a big step in making all the things we offer to our customers more coherent, more clear in terms of its value, and its impact on the business. Our customers are telling us to solve more of the details, and to do it for them in a way that creates the end result without them having a lot of expertise.

The goal is not to replace people. The people are where the creativity comes from. But you take the repeatable, standardizeable pieces and put them in software that we deliver either as products or as specialized services. The humans can apply more of their creativity to the piece that only humans can do.

The emergence of Web services is the technological base and the lingua franca that makes the idea of a services stack possible. You have to somehow bridge the world of software to the world of business processes.

Tomorrow: India Action: Build Infrastructure to Support BPO

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TECH TALK: Tech Trends: India Action: Build Infrastructure to Support BPO

While it is a good start, the way we have been looking at BPO in India is not necessarily the way it is likely to be in a few years. First, many of the BPO operations are concentrated in cities where the cost of operations are high. But given the problems with infrastructure, companies have little choice at this point. Second, the people being employed in the BPO sector are among the upper end of the educated pyramid who are attracted by the high salaries. Given the mundaneness (and in some cases, the hours) of the work, they quickly tend to get bored – this is reflected in the high attrition rates at most of the BPO companies. Going ahead, if India is to build a deep backend in outsourced services, both these factors need to be addressed.

India has 784 cities and towns with population greater than 50,000. BPO needs to spread outside the top few cities into the hinterland. But for this to happen, the infrastructure in terms of power and telecom has to improve dramatically. The same applies for education. India’s Tier 2 and 3 cities need to the ones where the new BPO centres need to come up. In fact, if one looks at the US, this is what has happened – outsourcing centres are in low-cost and relatively less wealthier states and cities. India too will go along the same path. But for that, a concerted effort needs to be made to improve the infrastructure in these cities. Today, in fact, other than Mumbai and Delhi, most Indian cities do not even get reliable 24x7 power! There’s a lot of work to be done if the BPO dream is to be sustained.

Indian companies also need to start addressing the internal SME segment for outsourcing. This is where the opportunities are far greater – and a market that hasn’t really been addressed. IT services would be a good place to start. By using the commoditisation of IT and a near zero-cost of communication through VoIP (Skype, for example), Indian companies can provide the IT backend for the millions of US, European and Japanese SMEs. What is needed is standardisation of the offerings and solutions by industry. This is where the real benefits of the Internet start getting used to substantially reduce operating costs for SMEs. In addition, Indian companies can also help create new opportunities – whether it is by offering outbound marketing services or attending to customer calls. This twin strategy – using IT to automate and streamline business processes, and then helping them grow their business – can open up new business opportunities for Indian companies.

Tomorrow: Emerging Markets as Drivers

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TECH TALK: Tech Trends: 10. Emerging Markets as Drivers

The first phase of the technology revolution over the past few decades has touched the lives of the top of the global pyramid of consumers and enterprises. It is only in the past few years that technology has started making its way into the lives of businesses and families at the bottom of the pyramid – in the emerging markets. Because of the lack of legacy and an inherent need, adoption of some technologies has turned out be extremely rapid. In India, about 300,000 computers are purchased every month, as compared to 2 million cellphones. Now imagine what would happen if computers were available at the price points of cellphones. We will then see annual computer sales at 12-15 million for many years to come, making India among the top three markets in the world. What does that mean for the global IT players for whom India has so far been a rounding off error in their revenues and profits? Emerging markets, by virtue of their large numbers, have the potential to be the hotbed for disruptive innovations. They are the new markets which can ignite growth at technology companies. But at the same time, they need solutions which need to be at different price-points from what the developed world has been paying. This is both a challenge and an opportunity.

The opportunity for emerging markets like India is to create solutions using the newest technologies to leapfrog the present infrastructure gaps. Emerging markets are where more than two-thirds of the world resides. They are the next 90% of the market. They are, in the words of CK Prahalad, “the fortune at the bottom of the pyramid.” Technology today offers the building blocks to put solutions together which can help build out the digital infrastructure of these countries at a fraction of the price point of that in the developed markets.

India Action: Build the Emerging Market Tech Utility

Business Week wrote recently about how technological innovations are helping the poor in rural India: “No laptop, however cheap or durable, can compensate for India's lack of a nationwide power grid, or a comprehensive network of highways. But digital technology can deliver information -- information the rural poor desperately need -- about crop conditions, fertilizer prices, health care, and more. Reliable information can help India's poor stretch their resources -- to plant the right crops, deal with bureaucrats more effectively, operate on a level playing field with customers and merchants. The digital revolution in India is largely an information revolution.”

What India needs to do is build out the equivalent of an “tech utility” which makes available “commPuting” as a utility to the masses across the country. A centralised platform that makes available computing as a service and accessible via thin clients over a high-speed broadband infrastructure, neighbourhood computing centres that provide access on a pay-per-use basis, a community-centric content platform which makes available local information and helps SMEs connect with each other, investments in education and healthcare to make sure they reach rural Indians – these are the elements of the tech utility. India can use the technology trends to its advantage by looking ahead. By making things work in India, entrepreneurs can open up new opportunities for themselves in other emerging markets also.

The world of technology, like time, does not stand still. Innovation and change are the only constants. Indian organizations have the opportunity to leapfrog by simultaneously leveraging many of the new innovations that the technology industry is making available. The force of digitisation is at once a threat and an opportunity. The choice is for each one of us to make.

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