DataWind Enabling Internet for the Masses Date:   Friday , July 02, 2010 It took 100 years to get 30 million landlines in India; but it took only ten years to get 600 million mobile phones. "Just imagine how powerful it would be if the same number of Indian homes had internet", asks Suneet Singh Tuli, CEO of DataWind. However today there are lesser than 10 million internet-enabled computers in the whole country. Tuli’s vision for India has a powerful social dimension and closely aligns with the model put forward by Sam Pitroda, Father of Indian Telecom Revolution. "The product needs to be low cost, but it also should make commercial sense" says he. Tuli knows fortune lies at the bottom of the pyramid. He knew, if internet and the devices become affordable, it is just a matter of time that every Indian home gets to use it. He along with his brother Raja Singh Tuli, embarked on their third entrepreneurial stint DataWind with a unique idea of a combining low cost device with free connectivity. "The combination of fast and free access to the ‘real’ internet will be a winner in the emerging markets where the volume is much greater, and the needs slightly different" says he. Over the next ten years, India will become the world’s largest and fastest growing internet market, and people will say that this revolution was obvious. The key question, then is to understand what circumstances will facilitate this revolution? The recent 3G network auctions will certainly help, but that will not be adequate. The masses can’t afford Rs.25,000 computers, and Rs.6,000 in annual internet costs. The cost barriers need to be broken, and once that happens, the flood gates will open. DataWind has thrown down the gauntlet in this regard, and challenged the industry with an aggressive price proposition. Datawind’s product Ubisurfer is a internet connected netbook, with the Microsoft Windows CE operating system and powerful Softmaker office suite at an attractive price of Rs7999. Today it is the most aggressively priced netbook in the market. "For any product to be successful and long standing in the market, the addressable market should be of a substantial size" says Tuli. He knew, that internet would sooner become inevitable to the lives of even the common man. To make the product stand ahead of competition, he knew he should position it in a way that the product not only provides seamless connectivity but also is portable and affordable. He was striking the right chord by focusing on the fortune at the bottom of the pyramid. To make the product really affordable, and to attract the masses at the bottom of the pyramid, he knew that the technology also had to be advanced, efficient and cost effective. "The bottom line we had in mind was that the technology should deliver web page 30 times faster than it takes to load it on any other handheld,"adds he Leading the Revolution With the lack of infrastructure for landline telephony, the revolutionary success of the cellular networks in India seems obvious. Today, India’s telecom market is the fastest growing in the world, at over 15 million new subscribers each month. Although these days, this revolution seems obvious, ten years back, that wasn’t the case. It was fascinating for Tuli to know the power of cellular phones when a taxi driver gave Tuli his number and asked to just make a call when Tuli needed a taxi service. Wouldn’t a similar revolution be possible in the area of computer and internet? Tuli is aiming to lead this obvious internet revolution in India. Both Computers and Internet access are too expensive. So, why would one bother buying a computer, since there could be already one at work, or that there’s an internet café conveniently located almost everywhere. That attitude, the high costs and the lack of infrastructure explains the reason why there are only 15 million internet subscriber base– that is, the same amount as those who subscribe to mobile phone services every single month. He engages in conversation with the common man in India whenever he can. "People think I am crazy when they see me talking to rickshaw wallahs and trying to figure out how to sell them devices at a price they can afford and in the way they want to use them! But the internet is too expensive for the average person in India” says he with a smile. He realizes that computers, notebooks and netbooks have really limited value without internet connectivity Tuli understands the Indian proposition. As Rama Bijapurkar, leading Market Strategist and expert in Consumer Behavior says "Emerging markets do not evolve the way the developed ones did, and consumption here takes off at far lower income levels, with low-priced innovations. Business Model The right business model defines the future and scope of the company and its products. Tuli realized it at the outset itself. He takes the example of the Apple’s iPhone. “iPhone is most successful in the geographies where Apple could make the most aggressive deal with operators and transfer the benefit to customer”. Tuli applies the same proposition here in India. Before launching in India, he held talks with various operators in India and decided to go along the most aggressive one provided by Tata Teleservices in India. After the initial cost, customers who wish to use more than 30 hours per month, simply need to subscribe to DataWind’s unlimited-usage compression service for Rs.99, and in turn DataWind will subsidize the corresponding airtime. For subsequent years, the customer needs to only subscribe to DataWind’s annual compression service for Rs.999, and again DataWind will pay Tata Teleservices on your behalf for the corresponding amount of airtime. This will bring in recurring revenue to the operator as well as to DataWind. “Obtaining recurring revenue is critical for any business” says Tuli. The success of Google and Apple comes from the fact that it keeps generating revenue through its consistent revenue stream. The product also offers transparency for the customer, where they do not need to figure out how many MB or GB of data they need to subscribe for, or be burdened by varying monthly fees. They also don’t need to be surprised by unexpected monthly bills. Although in each case, the customer is buying the device or DataWind’s compression service – the result, is that they are getting free mobile internet access, because the wireless network airtime costs are paid by DataWind. So, where does DataWind make its money? With such aggressively priced hardware, there couldn’t be much margin in the sale of the device. DataWind hopes that by breaking the cost barriers, and delivering free mobile internet, it would help millions of new Indian citizens become netizens. Millions of users, in turn would create a huge opportunity for advertising and related revenues. “There is a lot of opportunity to generate ads both search ads and display ads and since the user information is easily available to us, we can target ads to cater to specific geographies, age group and profile” says Tuli That is DataWind’s long term strategy. Like TV stations, as long as they can create viewership, the advertising revenue will follow. Market adoption in other geographies Armed with 18 patents covering hundreds of claims for its technology, the company first launched its ‘PocketSurfer2’ product in the UK in late 2007 and became very successful in UK. Available through traditional channel partners like Amazon, Dixon’s Duty Free, Maplin and other high-street vendors, the PocketSurfer also found another distribution channel, not commonly reserved for high-tech gadgets: TV home-shopping. Partnering with Ideal World TV shopping, DataWind offered the PocketSurfer to a broader range of consumers. "Not only has the product hit a chord with technically oriented folk and travelling executives, but it is helping bridge the digital divide with retired people responding to the simplicity of the solution", says Tuli. He has also launched multiple versions of Pocket Surfer and its latest offering include Ubisurfer netbooks. After the tremendous response from developed countries like UK, ermany and Australia, Tuli recently launched the product in India. “The product is ideal for an emerging market like India, where the Internet revolution is just round the corner". While costs and the lack of landlines has limited internet penetration, DataWind’s solution takes advantage of the broadly available Indian CDMA GPRS networks and helps overcome the cost inhibitor by providing free-usage. Free mobile internet, this could truly be the next big thing It is by late 90’s that Tuli brothers became excited about the possibilities of the internet. To be more exact the wireless internet. The idea of a portable device which ensures seamless connectivity was powerful. He explored the market for a handheld device with connectivity. But no product could satisfy him. He felt a gap in terms of what is available in the market and what customer needed. This made him come up with the idea of pocket surfers and later Ubisurfers. He worked out that the volume of web traffic had be sufficient, and data costs low enough, to offer free internet access. To increase its popularity he offered the product free to anyone who could find a faster mobile internet device. This caught the attention of geeks and bloggers the world over, but was a no-risk ploy because it really is faster. They were impressed with it and spread the word. With Ubisurfer and Pocket Surfer, Tuli has not only unlocked a new market, but is also taking the power of the internet to the masses. This path breaking product has a greater chance to be successful than Nicholas Negroponte concept of One Laptop Per Child. The OLPC concept failed in providing connectivity. DataWind has the power to penetrate the market and create a revolution. Also, Tuli hopes to see competition in the field. "Competition will bring in awareness and bring prices further down and make technology more advanced” says he. ”This will inturn help the masses interms of affordability" DataWind, is marching towards an inclusive growth and there by plan to etch their name in the pages of history for redefining the internet saga of the country.