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ICG Risk Blog - [ Emerging Information Technology (IT) themes in India and China ]

Emerging Information Technology (IT) themes in India and China


Stepping out into prediction space on the Indo-Chinese IT sector:

  1. India will, for the foreseeable future, become the low-cost IT counterpart to China low-cost manufacturer
  2. India and China will complete a shift to Linux, of increasingly indigenous versions, that, given the region's user volume and technical expertise, could see the center of Linux development shift to Asia
  3. India will use its IT expertise to develop "asymmetrical" low-cost efficient computing devices driven by its 'disadvantaged' position on the Digital Divide. Much like Japanese vehicles in the 1960s, those devices will mature and expand out of Asia
  4. India's IT-based products will take advantage of both rising local manufacturing efficiency and Chinese low-cost manufacturing (rising price-volume efficiencies in both nations) along with their rising broad based consumerism
  5. India will increasingly outsource to, and acquire, IT/tech resources in China such that supply chain risks will reach similar proportions in both countries
  6. India will become the recipient of Chinese attentions in IT intellectual property (IP) much as have US and European firms in the heavy manufacturing segment

Acting as drivers, India and China, along with smaller Asian nations, acting as consumers, will invent new paradigms and take leaps unencumbered by legacy infrastructure. In 2002 for example, the third world explosion in wireless networks over traditional landlines was typified by this unacceptable cost fault line in both long line and last-mile connection:

"Unfortunately telecom networks are designed for people who can afford to pay around US$35 in monthly bills, and very few people in the rural areas can afford that," said Ashok Jhunjhunwalla, a professor at the prestigious Indian Institute of Technology (IIT).

The upshot was Wireless in Local Loop (WiLL) technology, rugged electronic switches that need no air conditioning, and solar-powered relay stations providing both voice and data. The Simputer (from "simple computer") followed at $250 on the back of Linux SW and a simplified design using low cost components. A "WiLL kiosk with a personal computer, printer, telephone, and power source" fetched about $900, which compared quite favorably with the Indian government's $800 cost of a telephone line.

Fast forward to 2005 and the Linux-powered, hand-held tactical battlefield C2 SATHI (Situational Awareness and Tactical Hand-held Information), or 'buddy' in Hindi, whose commercial versions sell for some $200. (One would expect such devices to enter terrorist inventories for similar purposes.) Indians value Linux's cost, ease of installation, and security (open source over proprietary code with possible trap doors) for both military and commercial apps:

Officially, India's strategy is to make Linux the standard for students in all academic institutions while the government trains employees to help them work in a Linux environment with support from IBM. In Bangalore, a global information-technology hub, Linux now runs a Center of Competency (CoC), equipped with IBM hardware, that offers consulting, education and certification and allows users to test and gain insights into how Linux can help them. Jyoti Satyanathan, general manager for Linux-IBM in South and Southeast Asia, believes that the CoC is set to play a "significant role in the worldwide Linux community". Red Hat, a leading purveyor of Linux, now has offices in several Indian cities.

We can expect to see IBM repatriate code and devices here. On the high end, that can be a C-DAC (Center for Development of Advanced Computing) supercomputer built after the US halted supercomputer shipments to India due to diversion to weapons and nuclear programs. Now making teraflop machines, C-DAC differentiates themselves from English or Romance language-centric devices in that they design to enable nationals of many countries to "use computers while working in their own languages." That is a powerful advantage among the largely double-byte character languages of Asia. Another interesting item, equally at home in rich areas or poor, is the Amida, a Simputer variant that is a hybrid PDA, hand-held, and phone that includes a smart card reader so that rural poor can buy a card and rent an Amida for a short period. Indians are designing for a broad use spectrum of developed world to third world.

Such advances will draw the attention of those interested in the code and architecture embedded in Indian devices, especially as Indian firms move through increasingly more complex devices while they expand their outsourcing to China and other low cost countries, retaining BPO (business and process outsourcing) from the US while outsourcing the IT/technical services that do not require English proficiency to China. As Indian firms expand both outsourcing to, and acquisition within, China, it will be increasingly impossible from the client's viewpoint to distinguish supply chain risk between India and China. One wonders how clients and end-users will evaluate the critical path of risk.

Bridging India's digital divide with Linux
By Ranjit Devraj
Asia Times
Jan 28, 2005

China no threat to India's IT industry - just yet
By Priyanka Bhardwaj
Asia Times
Feb 2, 2005

Gordon Housworth

InfoT Public  Intellectual Property Theft Public  Risk Containment and Pricing Public  Strategic Risk Public  


  • Gordon - Re: India. I thought that you would find this article interesting (ht...more
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