Novatium's CEO Alok Singh

Ashok Jhunjhunwala met Rajesh Jain in the most unlikely of places-in a taxi speeding through Bangalore's rush hour traffic to the airport on a cold November evening. It was during that fateful drive in 2003 that Jain sounded out Jhunjhunwala about developing a low-cost computing device. Jhunjhunwala, a professor at IIT Chennai, and founder of the TeNet Group, had already incubated several high technology companies in the telecom and networking space; and Jain, currently the Chairman of Netcore Solutions, had become famous during the dot.com boom for selling his Indiaworld.com to Sify.com for Rs 500 crore. He had been talking of affordable computing since early 2003. His vision: develop a computer that supports most of the applications already in the market and one that would always remain "current". The solution: server-centric computing. Shorn of the jargon, it means the monitor at the user's end has little or no storage space and computing power; it is merely an access device that allows users to link up to and work on a central server. The benefits for the end user: little chance of obsolescence (since software upgrades are done centrally), few maintenance and breakdown issues and total security from virus attacks. The concept is not new. Corporates have been using thin clients (computers without processors), but these had only limited functions. "To make computing a mass market phenomenon, we needed to utilise the power of broadband. The solution needs to address the problems of computing by providing an access device that requires zero management and is affordable and operates on a 'pay as you go' business model, much like in mobile telephony," says Jain.

Jhunjhunwala carried out the R&D validation of the concept in 2004 at IIT Chennai and the technology was transferred to Novatium Solutions Ltd, the company he, Jain and Ray Stata, co-founder and Chairman of Analog Devices, set up for the purpose. The first alpha, or base-level, products rolled out in June-July 2005 (the products are outsourced from WeP's plant in Mysore), following which some fine-tuning was carried out. The Nova Net pc-price: Rs 4,500-resembles a flat voltage stabiliser, allows users access to a central server and is compatible with any monitor and keyboard, which can be purchased for Rs 4,500. Thus, one can get a fully loaded computer for Rs 9,000; and the cost of accessing the server is Rs 250 per month. It will by launched by the end of April. Says Yuvaraj Galada, Head of Business Development at Novatium: "For telecom operators in the country, this will be one way of increasing revenues."

THE NOVATIUM RANGE

Nova Net PC What is it: A box that is actually a network computer. It has to be linked to a server. It has no configuration as there is no processor. Server-centricity allows for generous storage, high speed and guarantees data privacy through an authentication process. The server can be hosted by a company for its own use or by a telecom/cable operator who has the last-mile running to the home, and can provide the computing services inclusive of internet for a monthly fee. How much: The basic set costs Rs 4,500. A new monitor, mouse and keyboard will cost about Rs 4,500. Total price: less than Rs 10,000. Alternately, all the equipment can be leased, depending on the business model offered by the service provider who could be the telco/cable operator/internet service provider who has the last-mile access to the home. Companies can set up the servers for their own use. What does it do: Supports applications based on voice, streaming video, data and graphics. Needs no upgrades at the server level, which acts as the processor and storage device. The service provider provides the upgrades and the applications you need and takes care of the viruses with his anti-virus software. Has virus protection and needs no UPS because data is stored and protected in the server. You can switch on to the page you left in case of power failure without losing any data. It provides for rich graphics and multimedia capability. Advantages: Low rate of obsolescence; technology will remain "current" for at least eight years as upgrades are done centrally; zero maintenance costs; offers roaming access under the grid system as data is not locked up in a hard disk. Disadvantages: User has to pay a fixed sum, perhaps around at least Rs 250 per month to the service provider; does not have a CD-ROM, though a pen drive can be used. Nova Net TV What is it: A home network computer that doubles as both a home entertainment and a computing device. It can connect to both television and computer networks. How much: Rs 5,625 for the home network computer. The television doubles up as a monitor. Novatium provides the remote keyboard and mouse if the user wants these for an extra cost. What does it do: It allows for digital audio and video recording and storage for later viewing; supports simple online interactive games and has Voice over Internet Protocol capability. Advantages: Does not require a computer monitor; low power cost, no maintenance. Disadvantages: Resolution not at par with PCs; is best used for limited applications unless one is using a plasma TV. As it is server-centric like the net PC, user has to pay for computing services.

The business proposition looks compelling. The country has 110-120 million TV sets; cable penetration is at 70 million; there are over 50 million landline phones and 75 million mobile phones but only 5 million pc users. The new technology could turn computing into a mass market phenomenon like television and telephony, both of which were considered elitist preserves till not so long ago.

But this is not the only thing Novatium is offering. It has also developed Nova Net TV, which is targeted at people who need to do only basic computing. The Nova Net TV, which costs Rs 5,625, is another convergence appliance that transforms normal television sets into basic computing devices and does away with the need to buy a pc monitor. It allows users to browse the internet, send e-mails, chat and also supports simple computing. The display quality is not very good, but Novatium is working on improving this. A third product, the Nova Nion, enables connectivity with either PCs or TVs.

THE OTHER CHEAP PCS

HCL Ezeebee Pride Price: Rs 9,990. Specifications: 128 MB RAM and 40 GB hard disk. Processor: 1.6 GHz VIA or AMD chip. The 15-inch monitor has a CD-ROM drive and internet ready keyboard. Comes with Linux. Advantages: Supports word processing, spread sheets, internet-browsers, e-mail, video conferencing and some games-and enables presentations. Disadvantages: Limited applications; high risk of obsolescence, needs a UPS and regular maintenance. And an operating system. Zenith Premium PC Price: Rs 15,750. Specifications: 128 MB RAM and 40 GB hard disk. Processor: Celeron 2.4 GHz. Operating System of buyers' choice (so, it comes with nothing at all). Advantages: Comes with current technology double data random access with other accessories, such as optical mouse, speakers, 4 USB ports and multimedia kit apart from internet-enabled keyboard, CD-ROM drive and a one year comprehensive warranty. Is Rs 2,000 cheaper than other computers in its class. Disadvantages: Needs UPS; and additional cost of maintenance at home from the second year. Xenitis Apna PC Price: Rs 9,790. Specifications: 128 MB RAM and 40 GB hard disk. Processor: Cyrix 833 MHz or Celeron 9 MHz. Comes with Linux. Advantages: Useful for first time users and others with limited computer usage. Disadvantages: Limited use in graphics works. Almost outdated technology; needs a UPS.

The big challenge before Novatium is to sell its concept to telecom companies and multi-service operators. But, company officials don't consider this a very daunting task. Says Alok Singh, CEO of Novatium Solutions: "Media centre PCs"-these enable seamless downloading of content from a TV to a computer-are coming into vogue. And telecom operators are looking for ways to provide video on demand through their existing networks." But media centre pcs cost at least Rs 35,000. There are also additional charges for this 'premium' service; and maintenance becomes a big issue. "The Nova Net pc and Nova Net TV offer all the features of a media centre pc but at far lower price points and, thus, guarantee service providers their revenues."

But, the business model has to evolve. Equipment vendors, telcos or cable operators have to offer consumers winning propositions-either lease the monitor, keyboard, mouse and Nova Net for about Rs 250 per month; or offer an outright purchase option with only computing charges levied per month.

Several overseas players are very enthusiastic about the Novatium concept. Its products are being pilot tested in the US, the UK, Canada and Brazil. Says Victorien Ndounou, who runs the us-based Versa Global LLC, which is working on bridging the digital divide in Africa: "Even at its present stage of development, the Nova Net pc is a very valuable tool. It's quiet and small and does not take a long time to boot. I've used it for hours for browsing, gaming and edutainment and it's actually cheaper than some cell phones." Terry Bienstock, CEO and co-founder of the us-based WorldExtend, which provides software solutions relating to securing remote access to networks and individual computers, is another convert to this technology. "Novatium's products open up opportunities in the us market that did not previously exist. I believe both cable companies and telecom companies will be interested in these devices. But, they have to come with wireless capabilities as consumers in the us don't like a lot of wires."

But, one worry is that cheap pc's aren't exactly setting the markets on fire. The Kolkata-based Xenitis Group, which launched one in April last year, has shipped just 1,300 units till date. Says Indrajit Sarkar, Country Manager (Product R&D) of Xenitis Infotech: "That's because the low-end PCs are not really 'current' and have only limited uses."

But Jhunjhunwala is unfazed. Novatium's products do not suffer from the infirmities plaguing other sub-10k PCs, he says, "And I want Novatium to become a billion-dollar product company." Adds Singh: "Novatium is really a big organisation in its early days."