Monday, April 11, 2011

Time for Assembled Servers ?

In India , most of the desktops other than used by corporates are not branded but configured and assembled by small companies or users themselves. As in many cases, Indian Market is unique and western business models may not suit for India.

For the past 3-4 years, there is shift from Desktops to Laptops for home/personal use due to reasons like- cost of laptops going down, easy portability and obviously more people joining in the middle class club. I have been thinking about a concept of assembled Laptops for some time, but that seems to be a distant reality due to practical challenges viz size and specific designs of internal hardware for each model.

But another big market in India which is growing and untapped in servers market. Following west, most of the big corporates go for branded servers and storage. Also DELL , Lenovo , HP are compete well in the Indian market with competitive pricing. Most of these branded servers are used by corporates serving foreign customers and Indian Biggies.

But when we take small and medium businesses which operate in Indian business model of less investment , low margin and a safer business, say spending INR 10 Lakhs for computer servers is a hard decision to make. Unless their customer forces or we see a immediate business benefit, we will not be ready to invest money in new technology. Even small software/web development firms with few dozen employees serving Foreign customers may go for 1 or 2 servers and try to utilize 90-100% to get most out of it.

After the recent initiative of opencompute, I believe this would be a Game changer for India. Though the cloud services market is big (amazon elastic cloud, Racksapce, microsfot azure etc) in US, AIRTEL , SIFY , TATA are also in the business of cloud in India. Recently TCS introduced TCSION as IT-As-A-Service for small and medium businesses. The one challenge I believe for Indian companies for cloud is internet speed. Broadband for home is still in 512 Kbps range and are lot expensive for very high speed and business use. All these cloud based offerings are good for medium and big companies with multiple branches, saving several overheads and costs. But still there is market where we need small servers to manage say a network of a dozen computers in a 3 floor super store , jewellery shop , a web development firm. In these cases a powerful desktop can manage this but when we consider additional applications (eg: web server with live updates on stock/price) business continuity, availability and more importantly security, the complexity begins. Most of small companies are privately owned and they do not want their sales info to be in a cloud which could be accessed by others. Also take a small datacenter in each small town serving dozen small shops/companies in the town (any fancy name like meta-cloud ?). This will create a new business model , many small businesses and more jobs (and not consolidation / big cloud/less jobs) which is needed for India. Even small businesses will give it a try as the data is stored in their vicinity and they can get into datacenter any time if they want.

If those small computer shops selling assembled desktop computers started assembling small servers, it will open up a big market and attract small companies to computerise when they see the cost of setting up a small server would be of 2-3 times the cost of a desktop. Since they provided even CAD designs of all racks and mounts, I believe its already in protype/production in coimbatore:) which is known for reverse engineering. My dream is to see businesses using complete open source based softwares. Now I dream a open compute businesses using open hardware and software with a freedom from licensing/restrictions.

Your thoughts on this and any further info on this ?