The year 2005 may well be the year of broadband in India. Or so it seems. With BSNL and MTNL launching services across India, other players are getting ready for a price war. But we still have two important hurdles to cross before broadband replicates the heady growth of mobile phones in India over the past five years: the cost and complexity of computers.

Ten years after VSNL launched commercial internet operations in India, broadband promises a major upgrade. It is all set to usher in a variety of services across entertainment, e-governance, telemedicine, education and software applications. For us to realise the true potential of broadband connections, we will need to first rapidly ramp up the installed base of computers in India from the present 14 million.

Computers comprise hardware and software. Even as the hardware is becoming more affordable (a low-end computer will cost about Rs 15,000), software costs have risen as a percentage of the total outlay. So far, many in India have used piracy or non-consumption as solutions. Both are not good enough to boost usage and build a software and content developer ecosystem, which increases the value of the computer by making more services available to end users.

Besides the affordability of the full solution, the other issue that needs to be tackled is that of manageability. Viruses and spyware have made life difficult for less savvy users. Backing up data from one's desktop is not something that comes naturally either. Support, especially for home users, is not easy to get from the vendors.

If broadband has to boom in India, the computing industry will need two innovations to reinvent both its architecture and business model. After all, what will people do with fat pipes without affordable and manageable access devices and a variety of services?

To reinvent computing architecture, we need to take a leaf out of the industry's past in centralised computing and create zero-management access devices. Think of these as "thin clients". To build these multimedia-enabled network computers, move the guts of today's personal computer (the high-end processor and the storage) to the server, and replace it with the innards of a mobile phone (with a low-cost processor and limited memory). The "thick server" delivers the virtual desktops to users over broadband connections.

This server-centric computing model has many advantages. First, the access device can now be dramatically simplified and has the potential to reduce the cost to about Rs 3,000. (Keyboard, mouse and monitor would cost an additional Rs 4,000). Second, the computers require no maintenance and can now be easily bundled with the connectivity without the worry of house (or office) calls for support. Third, piracy will be eliminated since all software and content is delivered via the server, and can be controlled and monitored by the service provider.

The second innovation needed is on the business model. Instead of asking users to make upfront investments, computing needs to become a utility-available on monthly subscriptions. Mobile phone users and cable TV watchers are familiar with the pay-as-you-go model. This reduces the entry barrier dramatically for new users and provides a full solution at an affordable price.

Using thin clients and server-centric computing, it should be possible for service providers to offer a bundle including broadband connectivity and support for no more than Rs 700 per user per month-which is about what is paid by most mobile phone users in urban India. This is the point where computing will take off and spur the creation of a wide variety of services, making broadband a catalyst for transformation.

The next platform will consist of network computers as zero-management access devices, ubiquitous broadband networks, server-based computing and storage grids as the underlying infrastructure, centrally accessible services built around hosted software and content, and a utility-like subscription-based payment model.

This utility computing framework also provides the building blocks for a unified digital infrastructure capable of supporting computing, communications and entertainment, and facilitating the creation of next-generation utilities. Just like previous utilities, which brought transportation, water, electricity and telecom to transform the lives of the masses, so also this utility has the potential to realise the hidden potential of today's forgotten masses not just in India, but also in other emerging markets.

Rajesh Jain is MD, Netcore Solutions. He can be reached at rajesh@netcore.co.in.
His weblog is at www.emergic.org

Claiming Biotech High Ground
To live up to its promise of making it by 2008-09, Shantha will have to make 2005 count.

Shantha's Reddy: The company still remains work-in-progress

In August 1997, Hyderabad-based Shantha Biotechnics shot into the limelight when it became the first Indian company to launch an indigenously developed Hepatitis B vaccine. To those watching the biotech space, however, it looked as if the company had frittered away the opportunity to parlay this research breakthrough into a commercial advantage. Between 1997 and 2004, the company's cumulative turnover was Rs 185 crore; between January and December 2004, it launched only one product, and in 2003 it did none (it did one again in 2002); and its management, especially at the middle-management level, looked woefully thin.

Two recent announcements, however, indicate that things could be changing. On January 8 this year, the company announced a new delivery system for its Hepatitis B vaccine; a fortnight later, it announced the launch of Shanpoietin, a recombinant DNA erthryopoietin in pre-filled syringes (to be used in case of renal failure); and it plans to close this fiscal (2004-05) with two more launches and Rs 65 crore in sales.

Then, there are the seven Indian Institute of Management graduates the company has hired to beef up its middle management, the efforts to strengthen the board, and the progress being made by Shantha West, a joint venture with the San Diego, US-based East West Laboratories that is working to develop novel therapeutic monoclonal antibodies (these are produced by cells that are in turn derived from a single antibody-producing cell, rendering them pure, specific and safe for use in humans) to treat different kinds of cancer (non-small cell lung, breast, pancreatic, colon and melanoma). Of these, Shantha West has already developed and patented the antibody tb94 that targets lung cancer. "Each of these molecules has a market size of around $1 billion (Rs 4,400 crore)," says Varaprasad Reddy, Managing Director, Shantha, adding that the company has a real chance of making it big by 2008-09. There's still the question of some $40 million (Rs 176 crore) the company needs to get there, but Shantha is hoping an initial public offering, a private placement of equity or a debt issue could raise the money required.

-E. Kumar Sharma

Is Mangalore The Next Bangalore?
A growing base of skilled workers, vibrant trade, and a cosmpolitan feel are helping the coastal city give Bangalore a run for its money.

Infosys @ Mangalore: The tech boom comes to town

Not too long ago, Mphasis BFL was in a bit of a spot. Although it realised that its BPO arm, MsourcE, had to locate its new centre outside its headquarters of Bangalore for lower costs, it didn't know where. That is, till its hr managers paid a visit to Mangalore. By the end of March this year, MsourcE will get its fourth centre, and Mangalore, its first BPO outfit. Says Ravi Ramu, CFO, Mphasis BFL: "After evaluating all the alternatives including other metros and tier-two cities, we zeroed in on Mangalore since it seemed to be the best bet for us."

It's not Mphasis alone, though. Infosys already employs a thousand-odd people in the city, and Wipro has asked the state government for 25 acres of land to set up a software development facility. So has First India Corp., a subsidiary of First America Corporation, which wants to build a similar facility but on a 10-acre plot. Even smaller firms like Chennai's Lasersoft want a presence in the city.

What is it about Mangalore that's attracting the IT giants? To put it simply, it's a mini-Bangalore, but without painful traffic snarl-ups, expensive real estate and soaring wage costs. Located 357 km away from the Garden City, Mangalore was until recently better known for its banking industry (Canara, Vijaya, Syndicate and Corporation banks are some that originated here), a lovely coastline and a thriving agricultural sector. Then, there is the port.

Now, the city's hidden potential is being tapped. Mangalore boasts 100 per cent literacy (it was the first district in the state to achieve that), and has more than 50 institutes of higher education that graduate 7,500 students each year, including 2,500 engineers. It also helps that real estate and support services costs in Mangalore are a third Bangalore's. "Given its multi-cultural and educated workforce, Mangalore will increasingly figure on the international it map," says B.V. Naidu, Director, Software Technology Parks of India, Karnataka. STPI Mangalore's 18 companies already do Rs 456 crore in it services exports and this year the figure could touch Rs 600 crore.

Unlike Bangalore, Mangalore's growth will not be tech-led alone. There's a clutch of power projects that has been proposed. Energy giant ONGC is setting up a 2,000 mw gas-based power plant; the GMR Group is considering expanding its 220-mw naptha-fuelled plant; and the Jindals want to build a 500-mw power plant. For a power-starved state, the new projects could be a big boon. The problem: in anticipation of the coming boom, land prices have started heading north.

-Venkatesha Babu