Sunday, March 15, 2009

One Laptop Per Child In the USA

In 2002 (after a couple years of controversy and wrangling after the issue got national press), Apple provided Maine a laptop computer for every seventh- and eighth-grader in the state's public school system -- 17,000 machines in all. Maine intended that students take the machines home for use in both school and non-school purposes. Maine's idea was to enrich all the kids' lives with a computer and to bring their families into the digital age. Although initially regarded as a stunt and subjected to national press and claims Maine had made terrible resource allocation decisions, the program has been considered enough of a success that despite the economic climate the program is expanding to include ninth-, tenth-, eleventh- and twelfth-graders.

The new program will include 30,000 machines, and will increase annual fees from $13m to $25m.

The more material impact for Apple, however, may be much more than the difference in $12m in gross revenue per year. Since delivering a Unix desktop, Apple has fought from behind to regain relevance as a computing platform since being eclipsed during the '90s by Microsoft's one-two combination of (a) the functionally acceptable graphical user interface of Windows 95 and (b) Windows NT's ability to be navigated by non-Unix administrators. The result was that by the end of the '90s, Microsoft had taken effective control of computers' desktops, browsers, and servers and had created a Microsoft monoculture in business and higher-ed software (the latter of which fed the former (due to familarity among new hires), which in turn reinforced use in the latter (because its dominance made it the most relevant platform for training future IT professionals). The answer to questions about Mac deployment was largely "why bother" and the explanation was largely that "we can afford to use Microsoft" because "we already know its products." Microsoft monocultures were both an established fact and a self-replicating phenomenon, because virtually all new IT hires had Microsoft administration experience and nothing else ... and therefore (to protect their own positions and because they knew nothing else) supported more of the same.

By establishing a desktop sweep in an entire public school system, Apple will redefine normalcy for an entire generation of the school system's graduates. After accepting Apple's UI and performance norms, these users' inertia will support rather than thwart future Mac sales. Students taking Macs to higher ed will, in turn, create demand within higher-ed for administrative expertise (fulfilled in many cases by students learning support while performing on-campus jobs, wherein future IT expertise is germinated). Apple's effort to replace all-Dell enterprise contracts with all-Apple contracts is not just a blow to steady revenue at Dell, but evidences weathering of the bulwark Microsoft built to protect its integrated software monopoly. The monopoly was Microsoft's to lose.

The recent decision to expand a contract to provide Macs to the entire student body, not only for school use but for use at home, enhances Apple's effort to unwind the effect of Microsoft's successful NT advance against Unix by creating stable and ongoing demand for Apple's products and for the expertise to operate and support them in large numbers. Expertise like this will make more Macs easier to sell, and experience creating profitable high-volume enterprise supply contracts will place Apple in a better position to make other large-scale sales. As hardware becomes more powerful at the same price point, Apple's ability to offer differentiation on the basis of Apple-owned software will enable Apple to offer profitable competition at as low a price point as Apple feels is required to achieve its purposes. Moreover, as software becomes an increasing part of Apple's revenue stream, the ability to deliver both Apple-owned solutions and Apple-vended third-party solutions will enable Apple to profit from a larger and larger user base that buys lower and lower cost hardware.

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