India's take on the '$100 computer' gets U.S. venture funds

Novatium Solutions, which has come up with a thin-client computer for emerging markets, has landed an investment from New Enterprise Associates (NEA).

The company has mostly installed its computers around Chennai (formerly Madras) in southern India. The systems work on the thin-client model. Most of the actual computing and the Internet connection goes through a central server. Users then tap into the server through desktop units.

With thin clients, updates and security patches are easier to manage, according to Rajesh Jain, one of Novatium's founders. Energy can also be conserved. In a novel twist, Novatium's clients use a digital signal processor rather than a standard processor. NEA did not state how much it has invested in the company.

Jain, who sold his IndiaWorld portal in 2000 for $115 million, is one of India's better known technology execs. After selling IndiaWorld, he turned his attention to expanding the computer base in India. He also writes a popular blog. (Interestingly, another founder is Ray Stata, chairman of DSP maker Analog Devices.)

Novatium's computer will play in the same market as devices such as the Intel Classmate PC and the XO from the One Laptop Per Child organization created by Nicholas Negroponte. Some of these devices will be sold to schools, while others will likely be bought by Internet cafe owners, who will then recover their investment by selling time on their computers. Many phone booths in India are actually owned by individual entrepreneurs.

Even though Negroponte popularized the "$100 computer" name, no one is actually hitting that number. The XO will cost about $188 after a series of price hikes. Taiwan's Asustek is working on a $200 computer based around Intel's designs.

Novatium says that its machine costs about 500 rupees a month, including Internet connectivity, software and hardware. That's about $12.44.

Novatium has also experimented with ways of using old monitors and TVs to cut the price further. In a 2005 interview, Jain said that he could get the total price down to around $120 with a used monitor.

Chennai is something of a center for cheap computing devices. Ashok Jhunjhunwala of the Indian Institute of Technology of Chennai has developed a $1,000 automatic teller machine that can also serve as an Internet kiosk for villages.