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Kish on: 
Why Asia is hot
The handheld device market
A "Flash-less" technology
Thin-client and open source |
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The argument really was that if you look at the thin-client market as a whole, which has been growing at about 22 to 24 percent a year, and then try to figure where the greatest areas of growth would be in the next five, it is very easy to see that they are in the Asian markets.
Consequently, if you are going to put development teams somewhere, you put them as close to the [growth] markets as you can, you tend to get better response. Especially given the nature of some of the Asian markets, where you have to be very fast in the ability to make changes, and customize products. So we made the decision to move the engineering team here. The decision was to put the muscle where the markets were, and if I look at not just the thin-client markets base but other related markets like the consumer markets, China and India represent some of the largest markets in the world.
The company had traditionally not done a good job servicing these markets, so we simply made the choice to be aggressive here.
Are you here mainly because it is cheaper to operate here?
If I had to list three reasons why we are here, cost ranks only number three. The most important thing was proximity to the Asian markets. The second thing--and people laugh when I say this, but it is honestly true--it is easier to get high-level talent in Asia than it is in US right now. There are more software engineers coming out from the universities in China and India, than there are coming out of US.
For me, it's really the ability to recruit world class talent, in the market that we want them to work in. The less expensive part of the equation did not drive the decision. What drove the decision was: Where in the world can I find a hundred engineers like this, bring them up to speed, and get them going? And I tell you, you can't do that in Silicon Valley. There're just not enough people there. You can do that Bangalore, China or Eastern Europe. Those are the three areas where you see a concentration of engineers.
Why are you bullish about Asia's thin-client take-up?
Because the economies here are much more vibrant and there is a lot more infrastructure investment going on today. If you look at IT spending in Asia in the last few years, a great deal of it has been network infrastructure and back-end servers. Once you have a powerful network and backend, what you realize is that you don't need a powerful PC on the front-end. And so those companies are now seeing that thin-client model can be a very real alternative.
Another thing that's going on in Asia is that all the privacy issues are finally coming up. India, for example, is right now building its citizens' database and is having a hard time figuring out whom to give access of that database to, because it doesn't want people to steal information from it. Japan has a new data protection act. We'll see that, I think, cascading across Asia over the next few years.
How much does Asia contribute to revenues now to Wyse?
It is about 12 percent of our revenues. The goal is to get it to about 30 percent over the next two years. So that calls for a doubling each year in size. Europe contributes about 30 percent, with US accounting for the remainder. But if you look at the growth factors of the markets, the investments need to be made in the 12 percent market, not the 58 percent market.
We think that the thin-client market growth in Asia will be between 40 to 60 percent. The growth in US has flattened, between 6 to 10 percent a year, because the penetration is much higher in US. IDC reported a compounded annual growth rate of 22.8 percent in its last report, with Asia outperforming US.
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