EE Times reports on the low-cost PC market in India: “Aiming at India residents with no PC experience, Novatium is developing the Nova NetPC, a thin client expected to cost just $100. The PC is now in beta-stage development and will reportedly be maintenance-free and appliance-like. Novatium’ three founders include Analog Devices’ chairman Ray Stata, Ashok Jhunjhunwala of the Indian Institute of Technology, and Indian entrepreneur Rajesh Jain.”
Novatium’s vision: “As you read these lines, 600 million people use computers as an extension of their lives. Yet, this very impressive statistic hides a remarkable market-truth. The benefits of computing have been largely limited to developed markets and the top layer of emerging markets. An untapped vibrant market of atleast 1000,000,000 users exists. For these users, computing must be radically different. Only such an innovation can take the benefits of computing to them. In October 2004, Novatium was formed by three admired visionaries to realise this new world of computing.” Read Rajesh Jain’s analysis of the opportunity with The Next Billion PC Users.
In the last few weeks, I have had conversations with a number of friends in the Venture business about their India strategy. One thing is clear, that, once this next Billion PC Users join the electronic universe, a new generation of market opportunities will open up in a way that we have not even begun to understand yet.
Forget the Enterprise Sales Force and the blue-print for building highly predictable business applications companies with Autodesk, Cisco, and HP as your beta customers.
I think it was in 3rd Grade that we first learnt the term BODMAS, but it was in the context of Arithmetic, not Algebra. That came later.
To refresh memories: The simplification of an algebraic equation or expression must be completed in a set order. The procedure follows the rules of BODMAS – any elements in brackets should always be calculated first, followed by power of (or index), division, multiplication, addition, and subtraction.
Try solving this one:-
HP Shareholder Return = ((HP – HP Corporate Computing) + Xerox + Kodak).
Then, take the subtracted value and do this:-
Infosys Shareholder Return = (Infosys + HP Corporate Computing).
I want to point my readers to Peter Redford’s experiment in creating a Publishing Empire by using the web as a democratic medium akin to Open Source …
Browse Books, Inc. is a concept that Peter is experimenting with. A hypothetical press release could read … “Merged-media book publisher, BROWSE, announced today that it is unveiling a web portal designed to make book publishing efficient and entertaining. Book authors will be able to submit manuscripts into the portal and work with affiliated editors, content and service providers and even book distribution agents to fully produce the book and secure distribution deals…”
For the writers out there, this may be a project worth getting involved in, and contributing your visions to! Peter writes his business plan ideas openly, in a public Blog format, and you can add your ideas to it via comments.
All coventional instincts of Venture Capitalists and Entrepreneurs go out of the window in this experiment. It is counter-intuitive to be so open about the ideas, and so callous about protecting IP.
At the same time, one wonders, How and Why did Open Source come about?
… But it hasn’t quite hit yet, either.
Peter Redford writes: “A federal judge ruled against Microsoft on October 14, 2004 in a TVI vs. Microsoft patent suit challenging “AutoPlay” technology included in Microsoft Windows. All three motions for summary judgment filed by Microsoft were denied, CD-TV as prior-art, invalidity and priority of invention, A jury trial is expected in early 2005. TVI filed the first patent for the AutoPlay function in Windows in the Summer of 1994. Microsoft filed it’s own patent for AutoPlay six months later (and references two of TVI’s AutoPlay patents in their patent). In all, TVI is asserting four AutoPlay-related patents against Microsoft and 8 of the largest PC manufacturers.”
Peter is a notable inventor, the CEO of TVI, and a good friend. Peter is using his blog at TVI to communicate with his shareholders, a minute-by-minute update on key developments in the case against Microsoft.
TV Interactive Data (TVI) is a Californian company specialising in video on demand technology. TVI claims that the Autoplay features in Windows 95 and all subsequent versions, which automatically runs applications on loading a CD, infringes its patents. TVI filed the suit in 2002, alleging that AutoPlay technology included in every PC version of Microsoft’s operating system since Windows 95 infringes on its US patents 5,795,156 and 6,249,863. AutoPlay examines the contents of a CD-ROM or other type of optical disc that is inserted into a Windows PC and automatically executes the most appropriate task, such as launching the installation program for a new software application.
If you want to follow the trajectory of a certain David’s sling-shot on its way to Goliath’s forehead, read Peter’s Blog.
Wired News: “But until recently, internet users who don’t patronize peer-to-peer sites had few options for tracking down video content outside of entering a query in a standard search box. Large net portals and a handful of smaller sites are looking to change that. In recent weeks, Yahoo, Google and MSN have each rolled out services designed to make it easier to upload or locate video online. The portals’ rollouts come as a handful of startups and independent film sites are creating tools to make putting video online nearly as simple as publishing text. Citing forecasts it commissioned from AccuStream iMedia Research, Yahoo said net users are expected to stream more than 21 billion videos in 2005, up from 14.2 billion last year.”
Yahoo! has added more media sources for its video search, including CBS News, MTV, the Discovery Channel and The Food Network. “We want to be the place to go whenever people are trying to find on-line video,” Bradley Horowitz, Yahoo’s director of media, said. Yahoo’s major rival, Google (GOOG), ofcourse, is also testing its own video search tool.
Key Rhetorical Question: Who understands the content game better? Semel or Schmidt?
Monetizing Video content is inherently more difficult than Text because the KeyWord AD phenomenon that has served Google well in the Text-centric search world, will not be as effective in Video. The simple and “algorithm” oriented Text-search paradigm does not work in the Video world. Google’s strength is in algorithms. But as it grows up, algorithms will not suffice. (Not to mention the fact that Google’s weakness is in its bad attitude, that even their customer communications carry …)
Key thought-provoking question: What will?
The software industry is going through much turmoil over licensing versus subscription, concurrent user versus named user, maintenance fees versus not, per processor …
A survey from Macrovision shows how Enterprises prefer to buy software (64% prefer perpetual licenses, versus 36% subscription). Surprisingly, they still prefer Perpetual License models, as opposed to Subscriptions, although all trends indicate that in the long run, software will be sold as a service, and an on-demand, Software as a Utility model will prevail, as championed by Salesforce.com and Webex.
Granted, this will be true ONLY for a certain class of applications, not all, and the demise of software altogether, I do not think is a given – no matter how much Marc Benioff rants about it. To Mr. Benioff’s credit, he has chosen an application that can indeed be served as a Utility, and has therefore successfully disrupted the existing world-order that had Siebel as the reigning champion.
While it is simpler to resolve the Utility versus License alternative, it is more subtle to resolve the License versus Subscription debate. Some segments of the software industry have effectively painted themselves into a corner by offering Flexible Subscriptions to their entire product portfolios, the Electronic Design Automation (EDA) industry being a prime example. Flexible Subscription can only work in the case of a monopoly, but in any other situation, it hands over the entire negotiating power to the customer, and triggers a negative spiral of price erosion that is singularly undesirable.
At the next level of detail, Enterprises still prefer a Concurrent User pricing model (42%), with floating licenses that can be used flexibly, across the team. Only 9% care about CPU-based pricing.
In an article in CNET, David Znidarsic vice president of technology for Macrovision explores the complexity of per-CPU pricing in light of the emerging multi-core processor trends: “For years, enterprise software has been sold on a per-CPU basis. The process was simple, easy-to-track and made sense for both vendors and users. But now a rapidly emerging technology called the multicore processor is fundamentally changing the way computers interact with software. This change is adding multiple layers of complexity to the once-simple per-CPU model and forcing software companies to re-evaluate the way they are licensing their products.”
But does it matter, if less than 10% of customers buy in the per-CPU model, and the number is likely to decline further, trending towards Zero? It does, because for certain segments of the industry, this pricing model will continue to dominate, a case in point being the Database business.
The diversity in pricing models is likely to be a lasting phenomenon, thus, continuing to need attention from product marketeers. It is simplistic to state that all software will convert to service.
EE Times reports: “End markets are presenting a serious problem to traditional ASIC design. Especially in consumer applications, but increasingly in other areas as well, markets tend to be fast-moving and fragmented. The system-on-chip that is perfect for midrange portable media players in China now is wrong today in the rest of the world and will be wrong tomorrow in China. SoC developers talk about product lives in months and hundreds of thousands of units, not years and millions.”
This is the problem statement, but the solution has so far been elusive. Hundreds of Millions have been invested already.
The author, Ron Wilson, however, cites a number of proof-points from the collaboration of eASIC and ST, as well as Lightspeed. This is encouraging. “We have so far created six derivative products from this design,” said Michele Borgatti, front-end technology and manufacturing manager on the overall project at STMicroelectronics. “In one instance, we were able to move from completed RTL to tapeout of the necessary via mask in 24 hours.”
Big implications for platform-based designs and building derivatives of a product family.
Also to watch, some stealth companies in the space: Ambric, this morning, announced a new CEO hire (Howard Bubb) out of Intel. Founded in 2003, the Beaverton, Ore.-based start-up closed $10.4 million in Series A funding in September 2004. Investors include ComVentures, OVP Venture Partners, Northwest Technology Ventures and individuals. Tabula has also been awfully quiet!
More than ever before, Indians are going back to work in India. Rajesh Jain wrote in July 2003: “There is an optimism in the air. Opportunities abound. India is rising. The time to think about a return to India is Now.”
Two years later, the trend is really and truly gaining ground.
Most US companies are chartered with the goal of reducing the % of employees in Silicon Valley or other equivalently high cost location. Anxieties abound on whose jobs are going to get dislocated, and when. There is a win-win, though, which companies and HR departments worrying about this phenomenon should try to understand.
Culturally, India is a diverse and very large country. The language differences, the cultural nuances, the cuisine variations are all dramatic and significant. Yes, there has been movement and inter-mingling. But still, a remarkably distinguishable ethnic identity prevails in each part of India.
So here is pseudocode for an algorithm on how to address the “India Relocation Strategy” for companies:
In your Team-of-Twenty-One you have already designed in management scalability to sustain a 200-300 people operation from the get-go. You’ve set the culture, the tone, the pace.
I believe, companies that are building 1000 people operations in one Indian city are making a mistake. They would be able to draw much higher degree of loyalty and emotional bond from their employees if employees are provided the opportunity to speak their own language, eat their own food, be close to their loved ones (India still has extended family structures), and raise their children in a familiar cultural environment that they themselves grew up in.
India is not America. People do not move as easily. Language and Food are very crucial ethnic phenomena, which Americans don’t understand because it is not part of their cultural heritage. Americans also do not understand the need and desire of older cultures to have access to their history, their legacy, their ancestors.
Hence, my recommendation of five Teams-of-Twenty-One : chosen from Bangalore, Delhi, Pune, Kolkata, Hyderabad, Ahmedabad, Chennai, Kanpur, Indore, Cochin.