For the month of October, I have decided to highlight a company as the Disruptive Leader of the Month. NComputing has been on my radar for awhile as one of the few for-profit startup companies that are targeting emerging markets and the digital divide, but I had not looked at them as a serious player due to their “thin computing” or “network computing” model.

If you recall, in 1995, Larry Ellison famously predicted the demise of the PC and introduced the Network Computer concept in which processor-less devices would hook up to servers to access applications and services. This is like Kryptonite to Intel, which makes its money selling a chip in every computer. Intel dismissed it and marketed against it. As such, I had been effectively brainwashed over the years as a marketer who had to convince users that a “fat client” or “full functioning computer” is the only way to go.

I recently reconnected over coffee with a former colleague who had just joined NComputing’s board. My first question was: “But isn’t it the same as a thin computer? These have all failed, or barely made a dent anywhere.” His response was that what NComputing had gotten it right in three ways:

  1. The technology IP is primarily in the software, not the hardware, allowing decent margins in a computer business that is now highly commoditized and in which ahardware players barely eek out a margin.
  2. Their business model is about scaling through big and small channel partners, and in some cases, allowing the partners to put their own brand on the devices.
  3. They have a cost that is substantially lower than the cheapest PC (about $70 per seat/user depending on the size of the deal, which doesn’t even take into account the power savings—at <1 watt per user, it blows away the average for a PC at ~110 watts).

So since then I’ve been taking a closer look and I’ve been very impressed. They’ve sold a million units to 20,000 organizations so far in 70 countries. They just inked a deal in India last week where they will provide 5,000 schools with NComputing devices to create 50,000 computing seats reaching 1.8M students, beating out Intel and Nicholas Negroponte’s OLPC.

Here’s how it works. The low end of their product line is the $70/user device that hooks up to an ordinary PC and allows up to seven people to access that PC doing basic computer work. They have a great interactive demo on their Korea company site (the Koreans always have a flavor for cool flash videos).

I think they are the closest thing to a disruptive innovation to the PC that we’ve seen in a while (with the exception of possibly the mobile phone if it truly becomes a mobile internet computer). Nicholas Negroponte recently said this about NComputing and the India win in a recent USA Today article:

One Laptop Per Child founder Nicholas Negroponte deflects Dukker’s criticism by saying his nonprofit and NComputing are addressing different needs. OLPC expects governments that buy its computers to give them to children, for them to keep and use at home, not just in a school computer lab.

“If you want to bring a touch of the computer experience, IT savvy, if you will, to each student in a school, the cheapest way is to build computer labs and the least expensive way to do that is NComputing,” Negroponte said in a statement. “If, by contrast, you want every child to have their own pencil, inside or outside school, that means a laptop.”

But fast forward five years. What if WiMax or a similar broadband technology becomes pervasive in emerging markets? What if NComputing creates a “thin” notebook … no hard drive, CPU, etc., … just a keyboard and screen that you can move from place to place connected to a broadband wireless network.

I’m not the only one that sees the potential here. Wolfgang Gruener of TG Daily predicted that NComputing could be the next Google.

So hats off to NComputing and its team for making what appeared to be yesterday’s technology into a potential winner that could change the PC world forever, and for bridging the digitial divide and promoting emerging market development while they are at it.