This post is the third part of a three-part series exploring the ongoing “battle” between Nicholas Negroponte’s OLPC laptop project and Intel’s Classmate PC. Part 1 focused on the role “ego” plays, creating unnecessary acrimony, and potentially thwarting progress on both sides. Part 2 focused on Negroponte’s decision to make his company a nonprofit. Part 3 discusses the role customer engagement has in “fueling the fire.”

Who are Nicholas Negroponte’s (NN’s) OLPC target customers? School children in emerging markets and developing countries.  Those living at the bottom of the pyramid.  Many times the poorest of the poor.  But who actually will BUY the laptops for these kids?  Governments. Politicians and bureaucrats who like being in the press as much as NN and Intel executives.

So here’s a typical scenario that repeats itself country-to-country.

NN meets with the president, the prime minister, or the <fill-in-top-leader’s-title-here>.   The government “leader” thinks this is great.  A cheap laptop for his country’s school kids.  The press is invited.  Pictures are taken.  Headlines are made.

Then the behind scenes thrash begins.  NN’s “people” start talking to the government’s people … typically other politicians or career bureaucrats.  Once the topic of “money changing hands” begins, things grind to a halt.  “Where’s the budget for these laptops?”  “But the president promised $X million?”  “That money hasn’t been approved or allocated.”  “I thought you said the laptop would only be $Y.”  “Oops, and there is that election in six months so we’ll have to get back to you…”

Then Intel shows up and meets the same government’s “leadership” … could have been me in 2006, or a score of other Intel executives (most likely Craig Barrett, Paul Otellini, Sean Maloney, John Davies, or Lila Ibrahim — the executives still involved with the Classmate PC).  We show them the Classmate PC.  The government’s leadership thinks “hmmm … not too bad.”  Says they’ll consider it … asks that Intel show it to “their government people.” Intel’s sales people start working with the ministry of education, showing comparisons betweent the two products, etc.  The government changes its mind, decides to go for Intel’s Classmate, and Intel and the government call out the press hordes for more pomp and circumstance.

NN grits his teeth and cries foul. In the press.

So not only do you have the egos of the two players and the for-profit/nonprofit competition fueling the fire, you have the press covering each deal that is won in each country, fanning the flames as the government politicians seek some publicity. The “fuss” is fueled by egos, for-profit/nonprofit competition, and the fact that governments are the customer.

The irony of it all is that whoever ends up winning the deal gets the joy of working through the governments education bureaucracy and budgetary quagmire to actually sell and deliver the laptops.  In a future post I will cover how hard it is to sell to the education ministries in any emerging market government … with one story from a Mexican deal that Intel had won that then went sour.

So what’s the silver lining in all of this?

  • Negroponte has done a great thing … he has single-handedly created focus and attention on the role a computer can play in improving lives, something I believe in passionately.  The mini-laptop category might not exist if it wasn’t for the high-profile nature of NN and OLPC, which ultimately got Intel and Microsoft’s attention and their competitive juices flowing.
  • Companies are learning to work with these governments, even if the progress is slow.  Governments are also learning to work with these companies.
  • The bigger companies are investing more money in philanthropic projects that will benefit poorer school children.  The expansion of philanthropic Intel’s Teach to the Future program by 5X with their World Ahead program is one example.

So maybe a little ego, competition and publicity can lead to good things in the long run, as well as create a boon for journalists and bloggers worldwide.

Jump to Part 1 on “Ego” and Part 2 on “For-profit vs. Nonprofit”