At the infrastructure level, Amazon.com now offers hard drive storage for rent through its Simple Storage Service (S3), and full computing services through it’s Elastic Compute Cloud (EC2). The EC2 rate of $0.10 per instance-hour works out to $72 per month for the equivalent of a 1.7Ghz Xeon CPU with 1.75GB of RAM and 160GB of local disk. And that doesn’t include bandwidth, billed separately at the S3 rate of 20 cents per gigabyte. Is this a fair price or not is anybody’s guess. It depends on who else is willing to rent out their machines at what price! In a recent paper titled “Market Design for Grid Computing,” forthcoming in the Informs Journal of Computing, Bapna, Das, Garfinkel and Staellert propose a market-based combinatorial auction mechanism for pricing Grid resources. The keyword in EC2 is elastic. The Grid approach to computing is a way to make infrastructure available to those who need it on an on-demand basis, without having to spend enormous amounts of capital. Interestingly, the Singapore government considers the furthering of shared service computing (yet another label for utility computing) a strategic national initiative and has pumped in millions of research dollars into industry and academia to develop and deploy robust models. The soil is fertile for Indian innovators to jump on the utility computing bandwagon and to begin with develop service based ERP, SCM and CRM applications that have localizes features and can be scalably deployed from Jharkand to Jhansi. For us in academia, this implies opportunities to pursue rigorous empirical and experimental research on related business models.

If we can make the benefits of ICT related productivity available to the millions of small and medium sized business in India, we may well be on our way to double digit GDP growth for the next decade if not more.

A Mobile Phone in Every Hand
No current Indian ICT story can be complete without the headline grabbing Hutch-Vodafone deal and more importantly its underlying fundamentals. With roughly six million new subscribers being added every month, Arun Sarin, CEO of Vodafone, was able to convince his skeptical and vocal minority shareholders of an $18.8b valued acquisition of an Indian telephone company. It was clearly a top-line growth story predicated on the potential to reach a100 million mobile subscribers by 2012. What makes it further interesting and different from the rest of the world, is that, contrary to analysts’ expectations, public statements by Vodafone suggest that they don’t expect ARPU’s to go up significantly in this period. With urban penetration levels in India’s tier-1 cities moving towards saturation, the next phase of growth is going to come from tier-2, tier-3 cities and rural India. Vodafone’s intentions are a positive signal from the country’s point of view as it suggests Vodafone’s seriousness about rural mobile infrastructure deployment. This is further validated by their almost parallel announcement of a partnership with Airtel to share the costs of such an infrastructure rollout. Incidentally, Airtel’s lean, high-growth, high-volume, low-margin business model appears to be the recipe for success in the new India.