One Laptop Meets Big Business

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Three students, photographed in Luquia, Peru with their brand new, child-size XO laptop computers Jeffery Salter/Redux

Former MIT Media Lab director Nicholas Negroponte, photographed at OLPC’s offices in Cambridge, Mass. Dana Smith

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Nor do they still insist on open-source software, a change that has caused some of the deepest rifts within the group. Originally, rather than using Microsoft's pricey Windows and ready-made commercial applications, they chose the Linux open-source operating system and created a new user interface and applications designed specifically to aid in learning by doing. A key reason to support open source: It allows students to tinker directly with software. However, some countries, such as Libya, which initially agreed to buy more than 1 million laptops, backed out and chose a Windows-based alternative from Intel. One attraction: Microsoft cut the price of a software package for poor schools from $150 to $3.

So when Negroponte chose to do business with Microsoft, turmoil erupted within the organization. After an Apr. 1 meeting during which the board agreed to break bread with Microsoft, Bender resigned. For weeks, OLPC's online message forums lit up with an angry debate. The anti-Microsoft side believes software shouldn't be owned but shared freely. To Negroponte, the choice was simple—and necessary—pragmatism. "It's like Greenpeace cutting a deal with Exxon. You're sleeping with the enemy, but you do it," he says.

Negroponte has had to fend off critics from the start. Early on, Intel and Microsoft executives, confronted by this charismatic rabble-rouser with his promise of affordable computing for the masses, called the XO a toy. They rushed out alternatives. Suddenly, Negroponte and his band were up against two of the most powerful tech giants in the world. And the giants played rough. Even after Intel joined with OLPC last year to help design a version of the XO powered with its chips, some of its people belittled the XO to governments who had agreed to buy it. Negroponte accused Intel of undermining his cause. Intel complained he was pressuring it to stop selling its Classmate PC for poor students. Negroponte now says he wishes he had been able to hold his temper and avoid a split.

He also faults himself for not managing his organization more effectively. "I'm a visionary, not a manager," he says. He ran the organization like a science project rather than a business. People had overlapping responsibilities. The staff of 23 regular employees and 26 consultants lacks the resources to support the needs of the pilot programs and deployments now under way—much less massive expansion. Negroponte, who travels incessantly to visit heads of state and education ministers, was spread too thin. So was Bender. Kane, who joined the organization as a part-time chief financial officer last year, is now running day-to-day operations. Already, the operational chaos has diminished. Now he's busy closing deals with countries and lining up business partners to help produce the technology for the next-generation XO. "We're moving from academic brainstorming mode to execution mode," Kane says.

DEBATABLE USEFULNESS

OLPC might not be in such turmoil if Kane had been promoted earlier. Nigeria had agreed to buy 1 million XOs, but after a competition among three alternatives, the country chose Intel's Classmate PC instead. Why did OLPC lose out? Intel provided more support, writes Isa Muhammad Ari, director of administration for Nigeria's Federal Capital Territory, in an e-mail.

With OLPC, most of the weight of training is carried by local education officials. In Peru, the Education Ministry is racing to prepare teachers. It gives them a 40-hour course that includes an introduction to the learning programs, instruction on basic repairs, and tips on how to use the laptops to enhance their lessons. Teachers BusinessWeek spoke to in two villages where the machines have been distributed seemed excited about them. One recent morning, teacher Ananias Richard Inga played a catchy song programmed in Spanish into the laptops to teach his first- and second-graders how to write and pronounce vowels. When seven-year-old Idelma Huarocc, her brown cheeks burned and peeling from the sun, typed "Idelma ama a mamá" (Idelma loves mama), she wiggled with pleasure as the computer's voice read her sentence. "