Tuesday, September 25, 2007

A better alternative to One Laptop per Child?

For those interested in bridging the digital divide, two seemingly-unrelated headlines in today’s news together tell a fascinating story. The first headline topped the tech news: Nicholas Negraponte’s One Laptop Per Child (OLPC) initiative will start selling their laptops to buyers in rich countries. But there’s a wrinkle: Rich-country buyers must buy their machines in lots of two, one they get to keep, while the other goes to a needy child overseas. Why the 2-for-1 charity promo?

“I have to some degree underestimated the difference between shaking the hand of a head of state and having a cheque written,” said Negraponte to the New York Times recently. In short, weak demand.

The second item appeared on the front of a special section in today’s Wall Street Journal: N-Computing, a Redwood City-based start-up, has won the Journal’s 7th annual technology innovation award in the category “Computing Systems.” What’s the connection? Well, N-Computing essentially brings “thin client computing” from the Western enterprise to the developing world. That is, the company makes low cost hardware devices that turn regular PCs into servers. (Think VMWare (VMW) or Citrix (CTXS) for poor people.)

Equipped with the $11 N-Computing device, a garden-variety PC can host up to seven simultaneous users. Each user requires only a screen, keyboard, and a mouse, but they get a full Windows (MSFT) desktop experience.

While Negraponte and OLPC have generated most of the buzz in recent years, N-Computing and its CEO Stephen Dukker represent a different approach to solving the same problem: how to get computing power into the hands of the world’s neediest students. And while not-for-profit OLPC has faced nothing but headwinds, for profit N-Computing appears to be getting real market traction. Last week, for example, the company closed a deal to outfit most of the school children in Macedonia with “desktops.” Yes, it’s Macedonia, but that’s upwards of 100,000 “seats.” And, the reseller that is doing the installation is China’s Haier Group, which clearly expects to make a buck on the deal. So there’s a real business model here, beneath the altruism.

Dukker, who was the founder of eMachines, stopped by the office recently and made a compelling argument for his case. “Even today’s lowest cost laptop has become a supercomputer,” he said. By sharing a single high cost processor and memory, Dukker says he can deliver “desktops” to kids at a “fully-loaded” cost of just $70 $220. (Ed. Note: $70 is the unloaded, per seat cost.) By comparison, he argues that the “fully loaded”cost of an OLPC, each of which comes with its own processor and memory, is actually over $800.

The architectural logic would seem to make sense, and Dukker says he’s sold 400,000 devices in just the last year. My favorite example: an entrepreneur in Mexico has used NComputing devices to outfit a mobile home with a dozen or so Windows terminals. Apparently, the man drives his home from one village to the next, parks, and opens up a temporary Internet cafe. That’s called grassroots demand, and it’s the sort of story that makes it easy to be bullish on Dukker’s thin-computing model, and increasingly skeptical about Negraponte’s costly laptop in every pot crusade.


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