OLPC 2.0: After Layoffs, One Laptop Foundation Reboots With New Focus and Big Plans

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took in $37 million. This past season, the foundation partnered with Amazon to sell the laptops and increased its advertising and marketing efforts substantially—to two or three times what they were in 2007, or close to $20 million, virtually all of it pro bono. Yet, sales fell off a cliff, coming in at about $2.5 million. Negroponte attributes “almost all” of the falloff to the poor economy, though others have theorized that the computers themselves had lost their appeal.

That was a huge blow to OLPC’s operating budget. But on top of the G1G1 nosedive, corporate sponsors of the organization also dropped out. Nortel, one of the biggest, recently filed for Chapter 11. EBay and SES, a network of satellite operators, had already ended their support. “There are a couple [others] at the moment whom I’m not expecting to renew,” Negroponte says. “They’re all cutting budgets and laying off people.”

Negroponte does not believe that people are turning away from the mission, or the vision, of OLPC. “I don’t think anybody has looked at OLPC and suggested to themselves that it’s no longer [viable]…I don’t think that’s happened,” he says.

Negroponte describes OLPC as having two economies. One is built around the laptops, the cost of producing them and the value they bring. The other, much smaller economy “is OLPC itself, which on the high months was burning about $1 million a month,” Negroponte says. “I never imaged that the smaller economy would be an issue. But it’s fueled by two things–Give One, Get One and corporate sponsorship.”OLPC Founder Nicholas Negroponte

The dramatic falloffs in those two programs necessitated the layoffs, which were designed to bring OLPC operating costs to under $500,000 per month, probably closer to $350,000, according to Kane (both Kane and Negroponte work pro bono). The OLPC president joined the organization last May—he had previously held executive positions at RSA Security and several other companies and helped negotiate RSA’s 2006 sale to EMC—with the job of bringing more financial structure and business-savvy management to the organization. The layoffs and refocusing are part of that effort.

Chuck Kane“You’re looking at a project that’s totally visionary that has to be converted into a business in he next phase: it’s already past that phase, and that’s the huge challenge,” Kane says. “To make it a business, you have to do certain actions that make it feel not non-profit anymore.” He says the foundation currently has enough cash to operate at least a year at its new staffing level.

The Laptop Economy—Poised for New Growth?

When it comes to the laptop economy, things seem far brighter. With roughly a million laptops in the field at a cost of about $225 apiece, Negroponte says he thinks of that economy as worth roughly $225 million. And he and Kane believe it is poised for more growth. The reorganization this month was designed to focus on opportunities in new markets, while turning relatively mature and already successful programs over to more business-like operations outside the foundation.

“The bulk of our success to date has been in Latin America,” especially in Uruguay and Peru, says Kane. By the end of this year, he says, Peru will have 600,000 XOs, while Uruguay will have 350,000. The maturity of the Latin American market—which he described as being in rollout mode, versus the seed stage—has spurred the OLPC to relinquish its management of programs in the region. “We’ve decided to, for lack of a better term, spin out that region and manage it out of Miami.” says Kane.

The spinoff into a separate entity is the first step in what Kane described as OLPC evolving into autonomous operating regions as XOs find success in different geographies. “I foresee OLPC from a sales and delivery standpoint as … Next Page »

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27 responses to “OLPC 2.0: After Layoffs, One Laptop Foundation Reboots With New Focus and Big Plans”

  1. Great piece Bob. The Sugar schism looks to be a watershed moment. The brilliance of the XO’s interface and applications like Tom Tom have always been underplayed.

    I’ll never forget the morning my daughter opened her “Give One, Get One” OLPC and proceeded to turn it on, figure it out, and dig through all the applications without referring to a single paper-based instruction. Conversely, she and her brother continue to struggle with netbooks due only to frozen Explorer windows. Digital natives hate Windows too.

    If OLPC is to be more like Google maybe they may want to look back at Sugar…

  2. joshuadf says:

    I don’t think Negroponte appreciates how big the open source community was in the first year’s G1G1 program. I only know a few people (including myself) who have an OLPC, but we are all Linux geeks. Unfortunately the One Laptop Foundation now has the reputation of being turncoat to the community. There is still a lot of great activity, but now when it is mentioned on Slashdot there are a lot of comments about how disappointing the Windows move was. Perhaps unfair, but that’s how reputations work.

  3. eric says:

    Probably would’ve been an interesting read. But not going to click through to see.

  4. annoyed says:

    Why split the story across 4 pages?

    And why split in the middle of a sentence!?!?

  5. Richard Howe says:

    The reason OLPC failed is that they almost immediately started downplaying the contributions from the open source community. The goal went from helping children learn to simply selling as many cheap Windows laptops as they could. By alienating the people most motivated to contribute to their effort, they stalled.

  6. Corrin Lakeland says:

    Alienating the community is what’s crippled the OLPC. Sure, that might be more perceived than real but as Richard says, perception is what counts.

    Unless they manage to get the community back onside, the OLPC is an interesting piece of history. I hope the sunlight readable displays make their way onto other computers but apart from that, I don’t really care what happens to them.

  7. Josh says:

    Today I got an acer one, I love those little netbook things,a very useful tool with ubuntu, and I knew that the first time I heard about the XO(before it was made), and nobody believed.

    But I’m sorry, I’m not going to get one, give one XO unless I know exactly who is going to receive it, simple.

    People care for people they know much more than others, and there is a lot of people that could spend 600euros in their three sons but not 1200.

    And not all the world is America, more than 90% of the world population find it very expensive to buy dollars, middle class could live well in their countries but to buy something in dollars they have to work much much more than an american).

  8. paul says:

    Nick Negroponte killed the OLPC movement. 100% of OLPC’s support infrastructure is volunteer-based, and OLPC deliberately keeps them in the dark about everything. Bug reports get marked invalid if they’re not filed by an OLPC insider. Serious, crippling wifi problems have gone unresolved for years (in many cases, even untriaged) while they focus on supporting CD-ROM booting for Windows. The Windows-centric BIOS emulation routines are closed-source and under tight NDA. Sugar sucks because nobody bothers to fix it; they just identify one or two problem areas a year and completely rewrite everything. The stylus part of the touchpad has never worked. They never addressed the stuck-keys problem. Spare parts are expensive and hard to acquire. They ship the things locked-down securitywise and expect users to manually enter things into a website and wait days for permission to install other operating systems. The rationale for that last bit is “the G1G1 users are our test bed.”

    Dozens of support volunteers have dropped out because the support crew is expected to handle basically all of the public relations, even though they don’t know anything and aren’t authorized to speak for OLPC. Hundreds of e-mails from people willing to help go unanswered and are eventually deleted because OLPC fundamentally doesn’t give a damn about anyone who isn’t a direct employee of the company.

    The last handful of companies that Chuck Kane ran were all sold off or put under soon after he took the reins. OLPC has an undisclosed number of NDAs with Microsoft, Marvell, Quanta, and other companies. They ignore offers of help from major open-source figures, and then complain about how long it takes to develop software. QA is backlogged by about six months, and doesn’t have a testing regimen in place anyway, and probably never will because it’s run by the same pack of in-the-dark volunteers who valiantly try to provide end-user support. Kane explicitly dropped the education mission of OLPC, and claimed it was now basically about distributing laptops and to hell with what is done with them. Regardless, OLPC (in keeping with Negroponte’s amazing hubris) will only deal with national governments, and the few programs that are getting the machines into the hands of whatever schools want them (the Give Many program) never took off because (again) nobody at OLPC gives a crap.

    Basically, Negroponte started out with a great idea, then made every possible wrong decision and turned it into a steaming pile of failure, and it’s pretty damn depressing.

  9. Fred says:

    Interesting to see how a great project evolved into something that a big part of the Open Source Community has learned to hate now. The funny part is that non-geeks credit the Netbook market to Asus and still haven’t heard of OLPC.
    The good news is that there are alternatives such as the Gdium (a MIPS based netbook) which will never run Windows and has similar (initial) objectives. I hope they (we) will keep promises and achieve much more. Some people are spending time to port Sugar on this machine and a lot of other Open Source stuff.

  10. Beeba says:

    Paul – you said it best. Moreover, Negroponte still has money to keep going especially after Microsoft bought him out. He has never apologized to all those volunteers for leading them down the garden path while he pressed flesh with important people and preached to the world about what matters and then eventually settled for “money”.

    He is a loser of the first order. Long long ago I actually thought he was cool.It is sad to see the shell the man really is.

  11. Peter Griesar says:

    Why not merge the OLPC hardware program into the Kindle development program?

    Since they are already working together it seems like a logical next step.

    The kindle is very low power and has a sunlit readable epaper screen. It just needs to be GSM for the devo world.

    It’s a bad idea to try and build a wifi network in the devo world when the GSM network is already in place and fairly ubiquitous.

    Also, Amazon would then have the killer student reading tool to sell to the developed world.

  12. I see many theories that may explain these facts, but I think these are the two most plausible:

    (1) OLPC is near bankruptcy, and is just offloading anything that could plausibly be done by non-staff members for free. This is what I would like to think.

    (2) NN decided a long time ago that XO 2 would run Microsoft Windows as the default / recommended by OLPC option, and he has been moving the composition of the organization to not oppose that announcement when it comes. There are some facts that would support this.

    a. With the change is management away from Walter Bender a while ago and the recent layoffs, the number of staff members that care enough about user freedom to quit if an announcement such as this were made has moved from the vast majority of employees, including top on-site management, to a much smaller number of people (approaching zero). The successful outsourcing of XO 2 hardware design would allow OLPC to lay off some of the last remaining people who really care about the freedom of users.

    b. Looking at http://trac.laptop.org/query (blocker bugs) is scary. The majority of “owners” are people who were among the laid off or otherwise no longer getting money from OLPC – from memory, at least jg, cscott, erikg, dilinger, walter, djbclark, mstone, mbletsas, mchua, and mako.

    c. Microsoft has previously surprised the OLPC staff, who initially thought Windows would not run well at all on the XO 1, by going from vague rumors of a port to having a port that worked shockingly well. They did this by throwing lots of engineering time at the problem (I believe more than the entire paid OLPC development staff as it was before the layoffs). There is no way to know that Microsoft doesn’t currently have a large number of people working on a coherent educational suite for the XO 2 to replace Sugar, or to somehow embrace and extend parts of Sugar when running under Windows. And since changes have already been made to the boot firmware to allow it to boot Windows in the XO 1, there isn’t a good reason to believe there will be any hardware-level reasons Windows won’t also work with the XO 2.

    d. John Gilmore’s post in reply to “Free Software Foundation Files Suit Against Cisco For GPL Violations” on the olpc devel mailing list –
    http://lists.laptop.org/pipermail/devel/2008-December/021841.html – and the “OLPC needs to comply with the GPL” bug – http://dev.laptop.org/ticket/4265 – point to the difficulty of continuing with the OLPC’s Digital Restrictions Management (DRM) “anti-theft” measures if running under GNU/Linux. Running Windows would solve this “problem” (said with sarcasm).

    If you have been developing for the OLPC XO 1, these would be my (personal) suggestions:

    (a) If you have been working on Sugar / Activities, continue doing so – that project has been split off from OLPC at http://sugarlabs.org – I’d suggest licensing any new activities you create under GPLv3, to combat current and any future XO tivoization. Sugar is generally useful, and can be used on non-XO devices, such as the education-focused gdium liberty 1000 – http://www.gdium.com – or any other GNU/Linux machines.

    (b) If you like hacking on operating system level stuff, take a look at http://wiki.gnewsense.org/Projects/GNewSenseToMIPS – a project to port gNewSense, one of the most freedom-respecting GNU/Linux distributions (based on Debian and/or Ubuntu), to the mipsel architecture, so it can run on the first generally available laptop that will be supportable by free software with no binary blobs (including the wifi, unlike the XO), the lemote yeeloong – http://www.lemote.com/english/yeeloong.html – this work would also help get Sugar running on a completely free, mobile platform (the gdium uses the same processor as the yeeloong, and people are porting sugar to work on the gdium).

  13. cam says:

    OLPC could have been marketed far better if it has simply been sold for the lowest sustainable price possible. The GiGo project was one of the most idiotic self-limiting pieces of shoot-yourself-in-the-foot idealism conceivable. If the machine had been successfully marketed to the developed world it would have been far more acceptable in the developing world. It would have enjoyed the benefit of extensive and intensive development as more and more programmers came aboard and leveraged each other’s efforts.

    The OLPC could have been the Kindle. It could have changed the world if only the people who managed it had understood more about the world.

  14. Ralph Green says:

    I bought the G1G1 offer last year. This year, I had several people ask me about it and I recommended they all skip it. With the changes in the program, we could not be sure that the laptop we gave away would be Linux. It would be cruel to give the kids a Windows PC, so we could not take a chance.

  15. Henry Wertz says:

    “I don’t think Negroponte appreciates how big the open source community was in the first year’s G1G1 program”
    I don’t think he appreciates it either. I’ve seen interviews, he’s like “I don’t know why so many people left all of a sudden, using XP isn’t a big deal” more or less. My sister asked about OLPC and was going to buy one recently, I told her “It runs Windows now and it’s underpowered for it. I do not recommend it”. I give him props for essentially founding the netbook market.

    But his decision to switch from Linux to Windows was and is disasterous for OLPC. The machine just doesn’t have the specs to run Windows well, even with the costly (for a $225 machine) extra RAM and storage put in to make Windows work at all. Many people quit at this point. Negroponte had recruited volunteers by introducing his vision of a fully-open educational machine running open software. So they had less than 0 interest in working on an underpowered Windows machine. The individual buyers also did not want an underpowered windows machine. I think he could have had a successful middle ground by offering a distro where you could run Sugar, *or* run openoffice+firefox for more conventional usage This would not have alienated the open source backers he recruited, or purchasers.. but I think would have appeased the bulk purchasers who “wanted XP” (keep in mind they are not getting XP OLPC boxes to run other XP apps on… the machine has Office only, no room for more software to be installed, and Windows XP Starter addition doesn’t support file shares so they couldn’t load an app off a file server either.)

  16. You have fired up the world with hope – we’re not letting you down. We’re going to keep it going.. We’re behind you .. ready to support the nexgen the hope in children’s eyes on every photo in your archive