I met with a good friend of mine last week and we were discussing Apple’s iPad. He believes the iPad is a game changer, but I’m not convinced. It’s a $500 device that allows you to access content, but it is not great for creating content since it doesn’t have a keyboard – you can purchase a keyboard to $70. With 16 GB of memory, it’s basically a Netbook.
Virtually everyone I know that purchased an iPad are raving Apple fans. What the rest of us need is an inexpensive device that offers quick and easy access to the Internet.
The $100 laptop is a great initiative designed to make computers affordable to developing countries. In order to make this initiative viable there has got to be significant volume which I’m not sure developing countries can sustain. The question is: Why wouldn’t the manufacturer also offer this computer in Europe or North America? There are a lot of people in these countries that can’t afford a computer and would jump at the chance to purchase a $100 laptop. There are also a lot of people that don’t need a lot of computing power and use it mainly to surf the Internet and access email.
Every day more and more processing is done via the web rather than on the computer. Reminds me of the old mainframe days when everyone had a “dumb” terminal at their desk. There are a significant number of people that want something similar to a “dumb” terminal which would allow them quick and easy access the Internet. I would buy one if the price was right (i.e. $100) because there are numerous times either my wife or I want to search the Internet for something. Since both of us use our laptops for business, we want to keep it out of the way so it doesn’t get damaged. Also, it takes 10 minutes to boot up my computer. I’m too impatient to wait.
An inexpensive “dumb” terminal (aka thin client) that only allows access the Internet would be perfect. Since the device would be have limited features, boot up time should be instantaneous and access to the Internet would never be more than seconds away.
I believe it is a matter of time before an Internet only computer takes off. Here is my prediction of how it will materialize. The technology will be adopted in developing countries as well as consumers in Europe and North America. People will love the simplicity of the computer – no upgrade hassles and they can turn it on in seconds. With a low price point, they will be less concerned about damaging it so it will be in places such as the kitchen which often spells disaster for laptops.
In the mean time, more and more cloud applications will become available and Internet access will continue to improve – faster, less expensive, and reliable with greater reach. Most consumers work and some will start using these inexpensive devices at work. Initially, SMB office workers (people that don’t travel) will use the device because it is not only inexpensive to buy, but it is also less expensive to maintain. Less complexity equals less cost to operate. As cloud applications and Internet access continues to improve, other employees will adopt these devices. As the eco-system becomes more reliable, bigger firms will start using the devices because of the significant cost savings without the drop in productivity. Power users would be the last group to adopt if they adopt at all.
The point is there are a significant number of people that are over served with today’s PCs and software. There are a lot of low tech people out there that just need to do a few basic things. If they can save hundreds or even thousands of dollars, scores of people will adopt this technology.
The problem with the automotive repair business is they are not incented to fix the problem the first time or fix it in a cost effective manner. I’m sure I’m not the only one that was screwed by a mechanic. For some, the more problems you have the more revenue for them. Many mechanics are ethical, but it’s hard to be ethical when you need to pay your bills and put food on the table.
The IT industry, especially firms that focus on the SMB market, used (I’m using past tense because the model is starting to change) a similar model – billable hours. Companies hired an IT consultant to come in and implement the hardware and software businesses needed to run their business. They charged a hourly rate to do so.
After the project is complete, the only way consultants made money was when a problem occurred. Businesses call them up screaming that the system is not working and someone needs to come out and fix it right away. Assuming the consultant was available (the good ones rarely are available); they rush out and eventually correct the problem. If the consultant was not available, your system could be down all day or longer. You are charged a fee for this visit.
Think about this relationship for a second. After the initial setup, the only time the consultant makes money is when it breaks. Sounds like the auto repair model.
Most consultants want to do the right thing and do their best to implement a system that is reliable. However, it is difficult when someone has a morale code that is at odds with their financial incentives.
Another model that is gain popularity is managed services. Managed services have a broad definition depending on who you talk to. For most consultants, it means pro-actively managing the system you purchased. For example, you are charged $100/month for a consultant to make sure your server is updated with the latest patches from Microsoft, free of viruses, etc. This model is much better aligned with your goals (unless you enjoy calling our IT consultant to fix problems) since the consultant is incented to keep the system up and running.
However, managed services may not be cost effective for your situation. You must purchase the hardware and software, hardware failures are not covered under most agreements and software/hardware upgrades are not covered either. At a minimum, every 3 – 5 years you get the joy and expense of footing the bill for upgrades.
Wouldn’t it be better to have all costs included with your service eliminating the need to spend your hard earned capital to pay for new systems as well as upgrades?
What if you could buy a system that was much more reliable, included hardware, software, and upgrades, all maintenance (even unplanned maintenance) and easily scaled with your business – up or down – no long term contracts? Would you consider it? This model, Cloud Computing/Software as a Service, is clearly aligned with your company’s objectives. Companies offering Cloud Computing services must provide a reliable, secure, and cost effective service. High support costs and security problems are the kiss-of-death for cloud computing companies – they have the same goal as you do – keep your data safe and the system running so you don’t call. Unless you enjoy calling your IT guy or gal, you should consider cloud computing as an alternative.
My blog is focused on how software, even more specific, information, can improve your business as well as uncover different options for IT ownership. Most business owners wear many hats and their least favorite is IT. It is difficult for most people to understand technology because of the extensive use of acronyms and other terms unique to IT. It’s like learning another language for most people – who has time for that?
Through my experience running Workplace2go as well as my consulting experience, I’ve learned a great deal, in some cases the hard way, about using information technology to improve sales, customer service, and reduce costs. My objective is to share what I’ve learned and explain how information can help you grow your business, improve productivity, and position your business for the future. My initial topic introduces you to the option of “renting” software rather than buying it.
Renting software is commonly referred to as Software as a service (SaaS). SaaS is a model for using software as a subscription service instead of buying the license and installing the application files on a local computer from a CD, or increasingly as a download from a vendor website. I am a big believer in SaaS, but I tried to be somewhat objective.
According to a large technology analyst firm, key characteristics of SaaS include:
- Network-based access to, and management of, commercial software.
- Server management from a central location rather than at each customer site.
Software as a service generally is priced on a per-user basis for each application, with billing managed by a major credit card or invoice. Sometimes there are minimum user requirements, minimum subscription time periods, as well as additional fees for setup, extra bandwidth and storage.