Novatium: Computing for the next billion Date:   Monday , August 31, 2009 Jayaraj and his wife is a common face in the sub-urban part of Chennai. The hot idlis and fresh puri’s sold by the couple is quite famous in this area. Street vendor Jayaraj thus earns around Rs.8000 every month from this business, which makes life comfortable for this family. Though he has just completed his high school education, this 34-year-old entrepreneur is not satisfied with this. He aspires to break away from his modest middle class existence. PCs and especially Internet had always been alluring to him. Having heard about the business opportunities available in this space, he bought himself a PC with access to broadband Internet. Today he searches, chats and even writes emails and hopes to start a small cybercafe soon. Unlike the normal PC, Jayaraj bought his PC at an affordable price of Rs.4500 thanks to Novatium, the company, which came out with what it calls as Nova Net PC and revolutionized the concept of computing. A computer at nearly one-third of current prices has always been a dream for most Indians. And yet, buyers are not holding their breath for these devices because experience has earlier proved that expectations are seldom met. However, this time around, those propagating low-cost computing solutions have taken a different route. Nova netPC is designed to make computing simple and economical without compromising on the user experience. Uncompromised computing implies that the users are able to do everything he/she expects out of computer without compromising on performance and features of the applications available. Novatium’s netPC allows the user to work with the desktop of his/her choice - Linux or Windows. The user can use any of his/her preferred applications. The netPC comes without a hard drive. It is a complete desktop with in-built internet access, chat webcam reaching your home just like cable TV service. It costs less than Rs.4500 with monthly rental plans beginning at Rs.400 for a broadband connection. However Jayaraj is not the only case in point. Today, several thousand homes in India are able to enjoy the luxury of having a computer at an affordable price as low as Rs.4500. This technological vision which was laid out in the labs of IIT Chennai by Prof. Ashok Jhunjhunwala, and taken to market by serial entrepreneur Rajesh Jain and Ray Stata (founder and chairman of Analog Devices) in 2004, Novatium is today not only a forerunner in the low cost computing market but also is redefining the concept of computing to make it available to the next billion people. According to the latest study by MAIT, the apex body of IT hardware firms, the total PC sales is likely to grow by 7 percent in 2009-10 with total sales expected to cross 7.3 million units. “Indian market is mainly dominated by the assembled PC vendors. Though assembled PCs are cheaper, they lack a holistic approach”, explains Alok Singh, CEO of Novatium. This presents a gold mine opportunity for the company especially when the overall market is still reeling under the heat of recession. Computing as a Service Though the India Inc. has made many noteworthy attempts in the past to introduce low-cost computing solutions, everything ended in vain. Be it Wipro’s Janata PC, iNabling Technologies’ e-mail device, iStation, or the much-talked about handheld device, the Simputer—all brilliant concepts that have not quite made it commercially yet. However in its new avatar, the Nova netPC seems to have ironed out the technical snags faced by its predecessors. This time round there is a robust, technologically sound, smart looking product that has hit the market. Realising that consumers are discerning enough not to interpret “low-cost as cheap PCs.” The applications would work without any degradation in performance, from both the speed and features point of view. The user can use any of his/her preferred USB peripherals. Novatium has built in simplicity into the netPC solution such that the user does not have to worry on the usual PC maintenance factors like Security updates, antivirus updates, firewall setups, data backup, etc. The netPC also reduces the cost requirements of the user, both from the initial acquisition point of view and the cost of ownership point of view (low power requirement, does not require UPS). Many of the the 100$ efforts provide compromised computing by stripping down the capability of the device and by compromising the viewing experience of the device. With the absence of a hard disk in the NetPC, all applications in the PC run virtually, i.e. all applications run on Novatium’s central network server that are centrally based. So if one wants to use Microsoft Office, it will not run on the hard disk but on the central server. Users just need to log on to the PC and all software and web applications will be accessible at one’ finger tips. This is also the reason behind the netPC’s low booting time at just five seconds, claims Singh. Novatium allows the usage of various applications on a subscription basis. “Most people use the computer for Internet access and a few basic applications. Hence, it made sense to provide only the basic applications such as MS Word, PowerPoint, Excel, messenger and a few more to the users and allow them to subscribe other applications as per necessity,” says Singh. The basic package at Rs. 400 (which included broadband charges) provides Mozilla for Internet, Microsoft Word, Excel, Powerpoint, Adobe Reader, few games and media applications on a Linux platform. It also allows a memory space of 10 Gb on the server other than which a user would have to use an external memory such as a pendrive or a hard disk. But if a user wants to opt for other operating systems such as Windows and Mac or additional software applications such as the complete suit of MS Office, Media Player and more, he can subscribe for it on a monthly basis as and when required. Since, only a few people in many emerging markets like to pay for software, having server-based subscriptions also helps reduce piracy and diminishes any type of security threat via viruses. Having explored the Nova NetPC, G. Mani, an employee of India Railways, said, “I never dreamt of owning a PC in near future but Nova NetPC has made it possible. Now I can access mails, teach my children online and manage accounts.” Building a Networked PC In the initial days, the sole idea was to be able to develop a low cost computer that is easily affordable by most. But when the team went into the dynamics of the idea, it realized that it was not about cost alone, rather there was a need for a computing device, which was both flexible and inclusive. Flexible so that it could be scaled up as per a user’s need and inclusive so that it could provide all the basic applications that a user would want from a computer with no compromise in quality. To start with, it was important to analyze what these billion people needed and what was available to them. While on one hand Internet (broadband) has witnessed a tremendous penetration, hardware and software on the other hand have been predominantly the same. The latter has evolved only with respect to the complexity of design and application and increased vulnerability to security threats. Hence, in order to create a low cost PC, it was necessary for Novatium to make conceptual change in the fundamental architecture of the computer itself. After years of intense research and with inputs from IIT Chennai, Novatium developed the Nova NetPC. Unlike the then typical x86 architecture, the core processor is an Analog Devices digital signal processor, traditionally used in cell phones, and works over LAN, Wi-Fi and broadband networks. Based on inexpensive cellphone chips, Novatium’s NetPC is stripped out of most hardware that could give rise to complications. It comes without the hard disk drive, extensive memory and packaged software that usually adds on to the cost in a regular PC. Instead, this concept PC has a keyboard, screen and a CPU with a couple of USB ports, and the entire ensemble costs just Rs.4500. It also comes with an option of a 160GB internal hard disk for an additional cost of Rs.2500. Challenges and Lessons Learnt Though Novatium is not a pioneer in this race for providing low cost computing devices but it has been the most successful one. This is a result of observing the market and the needs of customer. “Personally, I believe that Simputer and Inabler had been excellent technology ventures but their downfall was the failure to transform the technology into a consumer product. Nova NetPC engages innovative technology but is completely a user-friendly consumer product. Though we had our share of technology challenges, we learnt from the mistakes of our predecessors,” says Singh. Two years ago, the Novatium team had thought that the product was market ready and had lunched a pilot testing in Delhi in partnership with a leading ISP. It had then deployed close to 500 PCs and in almost all the cases observed that the network condition of the telco was unstable and unpredictable more than anticipated. Packet drops were too high and so was latency, varying from 1 millisecond to 200 millisecond. Also there were few problems at the customer end. For example, if an underground power cable was running anywhere nearby the broadband cable, there could be high data loss during intensity changes. Such problems are even out of telco’s control. A pilot in few other regions with several other telcos also yielded similar results. “Though our product was good, it was unable to handle the unexpected variation in the product. We realized that there were only two ways to solve this problem; either partner with only select few telcos for broadband network or else make some changes in our product. The team went back to the design board and made technical changes to the base architecture such that today the device works on any type of broadband connectivity, even if its is via GPRS. Also changes were made to shift several applications from Novatium server to the client side. Since the speed between the local host of the broadband or ISP and the user is faster, a whole lot of content like movies, educational software and music can sit on the local host’s server which the consumer can download. But the positive aspect during the experience was that though the company had decided to deploy only 500 PCs, the product had been an instant hit among users and received 24000 requests in Delhi alone. By the time the pilot testing was completed, Novatium had deployed close to thousand PCs in Delhi alone. Competency Edge Though the attempt to make simple and affordable computing devices started way back in 1999 with ‘Simputer’—simple, inexpensive and multilingual people’s computer, Novatium with its innovative PC has set the path for a severe competition from several other players who are trying equally hard to break the price barrier. Several PC manufacturers such as eSys has rolled out 10K Peoples PC which is available at just Rs.10, 000. Most manufacturers fail to realize that cost is not the only criterion for a consumer for the uptake of computing. Earlier attempts to entice consumers have failed miserably. Be it the MIT Media lab’s $100 laptop for students (which was taken by Intel for its OLPC program), Simputer, Inabler or Microsoft’s Student Innovation Suite, none have managed to make dent in the market. Apart from affordability; usability and maintenance are two key factors that consumer look at when opting for a computer. And the team at Novatium was quick to recognize this factor. Shankar, an ex-government employee sold his branded desktop two months ago and bought a Nova NetPC. The reason for this shift he says is the promise of low maintenance and ease of use by NetPC. “My earlier PC was a hassle. Frequent virus attacks and post purchase service was becoming a cumbersome process,” says Shankar. Unlike the server centric computing that traditional PCs offer, Nova NetPC provides complete desktop computing experience, supports multiple operating systems and applications from Windows and Linux on the same hardware device and reduces problems of hardware asset management. Apart from audio and multimedia support it offers VoIP support too. With ability to connect to LAN & WAN deployment, Broadband, Wi-Fi, it offers a multiple choice for connectivity. Lack of local application also increases manageability. Though other players have tried to woo the consumers with facilities that a NetPC may not offer; for example, CD/DVD drive, inability to support download of some rich media experience; Singh believes that Novatium’s success is its ability to be a networked device that has multiple services to offer. Novatium has launched Navigator that delivers comprehensive computing experience with special emphasis on Internet, gaming, digital entertainment, online education, telephony and business productivity over any broadband connection. For the first time, a user can seamlessly use multiple operating systems on a single screen. With enhanced features such as 3G connectivity Nova Navigator hopes to provide unparalleled computing experience to its users. With all such enhanced features, the zero maintenance PC works as a plug and play device at the customer premises with all the data residing in the backend fully secure and high availability data centre. The future in store In the past 5 years India has seen an increase in penetration of PCs at 20 percent year on year. This reflects the market prospective a company like Novatium can make use of. In the four and a half years since its inception, with over 20 pilots, Novatium has deployed nearly ten thousand NetPCs, mainly in the Chennai and Delhi region. Today, with over a million orders in the pipeline, the company is looking at a minimum of three thousand deployments per month. The buzz has already been created and it hopes to attain a subscriber base of 2 lakhs by the end of financial year 2009-10. In a continuous effort to enhance its offerings, Novatium has been partnering with several organizations like NIIT, www.classteacher.com, Biglaksh and more to bring their online trainings to the NetPC users. One of its major partnerships is with ZOHO, which provides online suit of office and CRM applications and saral-Al an erp solution provider. It has also formed several partnerships with network providers to deploy NetPCs in different regions of the nation. Since, NetPC would also be sold as a package deal with the Internet connection, the success of the service would depend on partners and their dedication to concept, thereby leveraging the customer experience. In the near future, Novatium hopes to emulate the same in many other parts of the world too. Apart from India, it is already receiving considerable traction from other emerging and emerged markets like South East Asia, Brazil, Venezuela, Africa, Mexico and the U.S. “We are extremely excited about the kind of response we are receiving from countries other than India. We now have the opportunity to take an Indian product global and assert its importance in the global arena,” says Singh. The company is already flying high with 11 technology patents for its product. “When one looks at the mobile industry today, I feel that the two most revolutionizing products have been Blackberry and iPhone. I’m not talking in the context of the number of units sold but rather the services these have been able to offer to their customers. While Blackberry pioneered the concept of email service in a mobile phone, iPhone revolutionized the way people can customize their mobiles with the applications they need. At Novatium all we care about is the customer’s satisfaction,” explains Singh. While Novatium has been working on making the device small, portable, affordable and stylish, it is also striving hard to make it independent of the hardware. It is trying to develop an operating system that would offer all the Novatium services on any laptop or desktop. “Already, the users are free to buy the monitor and other peripherals as per their choice but in the future we want them to be able to use Novatium on their personal desktop/laptop so that the hardware is not forced down upon them,” says Singh. The next in line is a Nova Laptop and NION ,both are smaller form factor and are in beta stages .to be launched in the near future. With its aim to make computing available to the next billion users, it is poised to realize the dream that a giant such as Intel had hoped for with its $100 laptop.