The $100 Laptop was really Jack Tramiel’s Vision

by Mike Levin SEO & Datamaster, 08/31/2006

What happens when an entirely brand new laptop costs less than a Microsoft Windows software upgrade? We will be finding out in a couple of years. And while the $100 MIT Laptop, spun off as the One Laptop Per Child (OLPC) foundation will not be on the open markets, the global pricing pressure this will exert on hardware cannot be overstated. Even though it’s now $140, the process is set in motion.

The press is already full of reports that Windows Vista is going to be the last big Windows OS update of its kind, due to the bloating complexity of the software, disruptive impact of virtualization and resulting new licensing models. But couple that with the fact that an entire PC can be delivered for the same cost, and you’ve got a complete recalibrating of expectations.

The $100 PC is the perfect delivery medium for a host of free services, meaning that it’s ripe for offsetting the cost with advertising, or pay-per-access services, rendering the PC essentially free and disposable, like today’s cell phones. When this happens, Windows as we know it today would be the most expensive component. Microsoft will have to make full-fledged Windows available to manufactures at a MUCH reduced cost, cutting into their main revenue stream, the reliable round of upgrades every few years.

In the same way that Microsoft worked its way to market dominance, alternating between focus on the operating system, office application suite, and programming languages, so will the open source community need to advance the state of software on each front. As Microsoft showed us, it doesn’t really matters whether you have the best product. What matters is the opportunity to penetrate a market first, being good enough, and using that as a beachhead for further activity.

And that’s exactly what the $100 per laptop crowd is doing. Underdeveloped countries are not a lucrative enough market for Microsoft, but they are potentially an educated workforce of information workers who will be growing up never even being exposed to Microsoft software. And exactly like you fix problems of prejudice, you can’t beat Microsoft by converting all of us who drink at the teats of Microsoft Office and who are full of fear at the idea of a non-Microsoft operating system. Instead, you raise a generation of developers who don’t even know what Microsoft is, and you wait for us to die off.

It’s long-term strategic thinking that was usually only characteristic of industry–not social causes. The last time you found PCs for the masses, and not the classes, you where the average price of PCs was around $100 instead of the average $1500, you have to go back to the Commodore 64 and Jack Tramiel. Had Jack not been driven out of Commodore, and got wrapped up in bitter entanglements, the world would have had the $100 laptop about 10 years ago.

Instead, the world waited until Microsoft had a near market dominance lock on the computer industry, and a sense of desperation had to motivate and color the entire endeavor. And even then, to get an individual who identified the opportunity, as Jack Tramiel did in his day, you had to go outside of the computer industry. It took MIT Media Lab founder, Nicholas Negroponte, had the same vision and developed enough clout to go out and make it happen.