Trendlines from 6/15/08: New, Hot, Unexpected

In this issue: Low-cost laptops; Wi-Fi on campus; Africa eyes outsourcing; Execs on globalization; Software piracy on the rise; and CIOs and social responsibility.

Microsoft Looks Beyond Low-Cost Laptops

Microsoft is looking beyond ultra-low-cost laptops to cheaper alternatives such as smartphones and shared computing in the drive to give people in developing nations a way to communicate and access the Internet.

The world's largest software maker has a few projects in the making, including a push to use mobile phones in computing and microfinance. Mobile phones have had an impact in the developing world, enabling people such as farmers and fishermen to find better markets and prices. Handsets give a person a way to be reached for jobs.

"Technologies like the mobile phone promise to take things like very small loans, microfinance, and allow them to operate in a very efficient infrastructure so that the price and the availability of financial products can be far broader," said Microsoft chairman Bill Gates at the Jakarta Convention Center last month.

One reason companies are looking more to mobile phones for developing nations is because of the huge number of handset users worldwide, estimated at 3 billion, and because mobile phone network coverage is widespread. Nearly 90 percent of the global population is covered by a mobile phone network, according to the GSM Association and CDMA Development Group.

Microsoft is also looking at ways to hook up smartphones to TVs to use the computing power and connectivity of the handset with the television's larger screen for a better and cheaper Internet experience in the developing world. It began working on Fone+ a few years ago and has tested prototypes, proving that such devices can lower the cost of computing for the poor.

Ultra-low-cost laptop PCs (ULCPCs) do have an important role to play in providing Web access to developing countries, but such devices are still expensive, according to Craig Mundie, Microsoft's chief research and strategy officer, and the head of its Unlimited Potential Group, which works on projects for the poor. That's why it is working on Fone+ and MultiPoint, a technology in which each student has his or her own mouse and unique cursor to use the same computer. That drops the price of computing dramatically, to one PC, a projector and 30 computer mice per classroom, instead of $200 per laptop.

Using ULCPCs to bring computing to students in developing countries began with the $188 XO notebook from the One Laptop Per Child Foundation (OLPC). The XO originally started with an open-source OS, but OLPC has worked with Microsoft on using XP, and Microsoft has dropped the price of a suite of Office software for such devices.

Microsoft and other organizations are concerned with bringing computing to the developing world. The fear is that modern countries with access to IT and the Internet will continue to expand the gap in technological know-how over developing nations.

-Dan Nystedt

Colleges to Speed Adoption of Next-Gen Wi-Fi

Though 802.11n is in its infancy and there's still no associated official wireless standard, 99 percent of all North American universities will be using it by 2013, according to a report by ABI Research. A proposed upgrade to today's wireless networking schemes such as 802.11b and 802.11g, the new standard promises far greater speed than its predecessors.

Less than 3 percent of North American universities are using 802.11n but adoption will grow rapidly during the next five years, ABI predicts. Wi-Fi usage in K-12 schools is also expected to grow during that period, due to a need for enhanced security and the fact that schools are instituting "anytime, anywhere" learning.

Europe is also starting to join in, according to ABI. However, Wi-Fi adoption there could be hindered by lingering health concerns associated with the technology.

Regardless, global revenue from Wi-Fi access point and controller equipment in the higher-education space will jump more than sixfold from $137 million in 2007 to $837 million in 2013, ABI says. "Wi-Fi access point and controller equipment revenue in the global higher education space will skyrocket," says Stan Schatt, ABI VP and research director.

And despite a common belief that the Wi-Fi industry in general is fueled by large enterprise wireless deployments, a separate ABI report found that consumer and small-business customers make up the vast majority of the marketplace for the technology. In fact, 95 percent of all access point shipments last year were to consumer and small enterprises, ABI says. Revenue from large enterprise purchases accounted for just 32 percent of all access point revenue in 2007.

-Al Sacco

Africa has outsourcing in its sights

Move over, India: Africa wants a piece of the IT outsourcing market. Egypt, Ghana, Nigeria, Senegal and South Africa are becoming increasingly aggressive in their push to compete with India—and the rest of the world—in outsourcing.

"There is an opportunity," says Yankee Group analyst Mindy Blodgett. "India is going to remain the offshore outsourcing leader probably forever, but you never know. That market is in trouble because of attrition. Companies are plagued by it."

Prices are also going up in India, which is a good thing for Africa. Many of its countries also have a time-zone benefit when dealing with European customers.

Several African nations have attracted outsourcing business but to compete they need to develop a larger, better-educated workforce. Problems with power grids, telecommunications infrastructure, transport infrastructure and unstable governments also must be addressed.

International capacity, a talent pool and a good environment for investments, with tax incentives, favorable labor laws, and economic and political stability, sum up what Orange Business Services looks for in a country. "Once you get that, the business will come and the customers will come. The demand is much higher than the available resources," says Yasser Radwan, vice president, Customer Services and Operations, Orange, Egypt.

There is reason for Egypt and other countries to be interested in IT and business process outsourcing. "These are good jobs...they tend to pay well, and it lifts an economy," says Blodgett.

-Mikael Ricknas

Source: EquaTerra and World 50
Source: EquaTerra and World 50

Execs Put a Positive Spin on Globalization

Globalization is viewed by top executives at leading organizations around the world as a business challenge that is here to stay, according to a study by EquaTerra and World 50 of 217 business leaders. Most say they view the trend as having a positive long-term impact on their business.

Study: Software Piracy Still Growing

computers First, the good news: The use of pirated software dropped in 67 of 108 countries surveyed in a study by the Business Software Alliance, which represents software vendors and their hardware partners and pursues companies that use pirated software.

Now, for the bad news: The software piracy rate increased by three percentage points to 38 percent in 2007 because the worldwide PC market grew fastest in high-piracy countries, according to BSA. Countries such as Armenia (93 percent piracy rate), Bangladesh (92 percent) and Azerbaijan (92 percent) led the way in software pirating.

"We are making much-needed progress in the battle against PC software piracy, and that's good news for governments, end users, businesses and the industry," says BSA President and CEO Robert Holleyman. "The battleground is now shifting, however, to emerging markets."

Several market factors contributed to a rise in piracy rates. First were the market dynamics in the PC segment, where the fastest growth is in the consumer and small-business arenas. "These are the hardest sectors in which to lower piracy," the report notes. Second was expanded Internet and broadband access in emerging markets.

Market research company IDC (a sister company to CIO's publisher) conducted the study for BSA, relying on proprietary statistics for software and hardware shipments gathered through surveys of vendors, users and the software sales channels; it also enlisted IDC analysts in more than 60 countries to review local market conditions.

In total, according to IDC's estimate, dollar losses from piracy hit nearly $48 billion in 2007, a 20 percent increase from 2006. That loss number has been controversial, however. Some critics say BSA wrongly assumes that every illegal software copy sold would have been purchased legally otherwise.

-Thomas Wailgum

Social Responsibility on CIOs' Agenda

Social responsibility isn't just for CEOs anymore. As the CIO role continues to change and expand into the business, some technology executives are also making it their mission to transform how IT is viewed by and can benefit the community.

One CIO who is making a difference is Steve Scopellite, winner of the CIO of the Year award from Computers for Youth (CFY), a nonprofit organization that provides computers for low-income families. Scopellite, managing director and co-CIO of Goldman Sachs, is committed to creating an environment that can sustain a diverse workforce at Goldman Sachs; he also works with schools and other organizations to engage young people in technology.

"We need to get technology in the hands of kids at an early age. And I don't mean Game Boys," says Scopellite. His work mentoring and recruiting future IT workers is why he was chosen as this year's CFY winner.

Recruiting new talent for Goldman Sachs became Scopellite's main focus after he realized the company could do a better job of getting women and minorities more interested in technology careers. "I visited schools, worked with our recruiters and vendors, and together with our management team, we changed the process with some very positive outcomes," he says.

Scopellite is the sponsor for the Technology Black Network within Goldman Sachs, a network that is part of its diversity strategy. He also helped establish the Career Development Committee and the Diversity Committee for the Technology Division.

"Recognizing CIOs for being socially responsible sends an important signal about how critical the role of CIO has become," says Elisabeth Stock, CEO and cofounder of CFY.

Previous CFY award winners include Becky Blalock, CIO of Southern Company, and Fran Dramis, CIO of Bell South. For more information about CFY, visit www.cfy.org.

-Jarina D'Auria

Copyright © 2008 IDG Communications, Inc.

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