India shows how to cut IT costs with open-source thin clients

What does a developing country like India do when plans to accelerate the adoption of computers by businesses and consumers have to overcome the high price of computing hardware and software?

It builds a computer that doesn't use costly products from Microsoft Corp. or Intel Corp., and seeks out cheaper alternatives that can get the job done, said Deepak Phatak, a professor at the Indian Institute of Technology Bombay.

"Affordability is the key to making IT happen in developing countries," Phatak said.

The problem is that existing notions of affordable prices for IT products, such as PCs and software applications, have been defined by the Western world and do not match what developing nations can afford, he said.

"This leaves only two choices. One, if you can't afford it, well, don't use IT: use paper and pencil and continue to lag behind. Or two, build your own affordable solutions," Phatak said.

For India, this means finding a cheaper alternative to the PC for local companies, he said.

The country currently has just seven PCs for every 1,000 people, far behind the 37 PCs per 1,000 people in China, Phatak said. And while India is on a drive to accelerate the adoption of computers by business and consumers, there is a lot of ground to cover before it can match China's PC penetration rates, let alone those of developed nations in the West.

Meanwhile, the gap between India and other countries continues to widen. Desktop PC sales in India are expected to reach 2.6 million in 2003, according to Kitty Fok, the director of personal systems research at IDC Asia-Pacific. That pales in comparison to China where desktop PC sales are predicted to reach 12.9 million this year, she said.

The problem, as Phatak sees it, is that PC prices are too high for Indian companies to afford.

"The PC costs are not coming down below 35,000 rupees ($763)," Phatak said.

To overcome this obstacle and spur the wider adoption of computers in India, Phatak is pushing for increased investment in IT and lower prices for hardware and software.

"I'm telling the government, the large companies, small companies, 'Quadruple your investments. Invest four times as much as you are investing.' And to IT companies I am saying, 'Give me solutions at one-quarter the total cost of ownership,'" Phatak said.

"They call me mad for that," he said.

To help bring down the cost of computers, Phatak is promoting the adoption of a low-cost thin client based on Via Technologies Inc.'s 800MHz C3 processor, rather than a more expensive chip from Intel, and Linux applications that run on a PC server.

Opting for a thin client instead of a desktop PC saves money in two ways. Thin clients don't require a hard disk and the 800MHz C3, which costs $22 in 1,000-unit quantities, is cheaper than processors from both Intel and Advanced Micro Devices Inc (AMD), he said. The cheapest desktop Celeron processor listed on Intel's Web site is a 2.1GHz version of the chip, which is priced at $69 in 1,000-unit quantities.