India, like most developing countries, does not have reliable water systems, and as a result is vulnerable to water-borne diseases. Half a million Indians die from diarrhea each year, and many of those deaths would be prevented by access to clean drinking water. Household water treatment could reduce India’s diarrhea-related mortality figure by 39 percent, yet two-thirds of Indian households do not treat their drinking water.

In India, the prevailing policy is to follow the lead of developed countries and build a piped grid that provides each household with 24-hour drinkable water on tap. But this expectation of infrastructure is unrealistic for emerging markets and is unsustainable globally. Piped water remains elusive even in cities, as poorly maintained pipes and pilferage leads to large losses in supply, and shortages lead to restricting supply to a few hours a day, leading to a booming demand for groundwater supplied in tankers that lowers the groundwater table. Indeed, the cost of laying such a water grid is so expensive that many western countries are unwilling or unable to proactively repair their own aging infrastructure.

But not every drop of water coming out of a pipe needs to be drinkable. Of the 135 liters of water per person per day recommended by the Bureau of Indian Standards, only 10 liters is needed for drinking and cooking—one-third of the amount allocated to flushing toilets. Why should we spend all of our effort cleaning 135 liters of water in an attempt to ensure that 7 percent of it is actually potable?

Sarvajal has approached the problem of providing potable water from a novel direction. Instead of looking at water through the utility model and try to solve the intricate infrastructure problems inherent in that model, we decided to sell water as a service. This approach has decided advantages, but comes with its own set of technical and human- centered design challenges.

Water as a Service

Organizations working in the water sector—such as Water Health International, the Naandi Foundation, and Safe Water Network—find it financially untenable to pay for the capital expenditures of water filtration equipment and buildings in which to house the equipment. Instead, they receive money from the government at the time of installation. There is little incentive for them to improve machinery or the process of getting potable water to the last mile. The result is a model that depends on the whim of government to find scale, with a cost structure that is increasingly obsolete because of the lack of flexibility inherent in such a model.

Although water from the municipal drinking supplies in India is generally untrustworthy, wealthy households are able to obtain clean water. They split their water supplies by installing point-of-use filtration systems to extract drinking water from the piped supply that they use for everything else.

Not every drop of water coming out of a pipe needs to be drinkable. In India, only 7 percent of the recommended daily amount of household water is needed for drinking and cooking.

Could a similar split model work for poor Indians as well? That was the question that led us to start Sarvajal, a for-profit business that gets its name from the Sanskrit word meaning “water for all.”

We based the Sarvajal business model on several underlying hypotheses and intentions: We wouldn’t sell water but instead sell a service to clean local water. Instead of a network of pipes, our “grid” would take the form of above-ground kiosks within villages where water could be available in 20-liter re- usable containers. We also decided to keep the price of water below every alternative option, including point-of-use filters. We initially set a price of 25 paise or US$0.005 per liter (now 30 paise) of reverse-osmosis treated water in rural Rajasthan, cheaper than the per-liter total cost of ownership of the cheapest bacteriological home filter on the market.

As we developed our business model, the challenges at first seemed to be about operations, supply chain, and collections. But as we refined our focus to one basic question—Could we imagine a solution to ensure people at the last mile get water that is safe to drink in a way that works for them?—we realized that this was actually a technical and human-centered design challenge that presented an incredible opportunity for us to innovate.

For instance, people in India are not accustomed to paying for water. Even if they are willing to pay, cash collection is an incredibly expensive task in villages that are far apart. And, even if you could get the cash, a distant company selling a locally available natural resource is simply untenable.

Our solution was that local water should be treated and consumed locally. Villagers would buy the Sarvajal service from a local franchise, not directly from Sarvajal. And, to best support a franchisee model, the technology needed to be a turnkey solution.

We had early success. Of the communities in the Shekhawati region of Rajasthan where we first began our operations, roughly 20 percent of households started buying from Sarvajal within weeks. Franchisees started making money.

But we ran into problems. Water had to be available as we promised—daily and dependably—and we quickly learned that it is an unimaginably difficult task to keep hundreds of complex machines running in dispersed villages with unskilled operators, unreliable electricity, intermittent mobile phone service, with franchisees who are likely to blame you for any and every failure. Although our business was fundamentally hardware, the challenges of distributed infrastructure for water in India began to seem a lot like the challenges of distributed infrastructure in information technology.

Frugal innovation was the only to fulfill our fundamental promise of affordable clean drinking water to customers.

To live up to our promise of water for all, we had to think through major technical and engineering challenges. Those challenges ranged from industrial design to thermal management to sensors barraged by power outages, operator error, and people trying to game the system, while at the same time keeping a tight rein on our costs. Frugal innovation was the only way we could fulfill our fundamental promise of affordable clean drinking water to our customers.

Out of the Box Solutions

When we started Sarvajal six years ago, we knew very little about water filtration machines. The machine for our pilot effort in Rajasthan came to us in a truck full of crated parts: motors, pumps, switches, membranes, tanks, and so on. The truck was followed by a welder, a plumber, a filtration expert, all of whom built the filtration machine onsite. It was a custom-built machine that took several days to assemble inside the room where we installed it.

We realized that this process was highly inefficient. Experts told us that machines had to be custom built based on the water source and output requirements. When we asked another supplier to send us a pre-built machine to a particular specification, and it came to us in a wooden crate that took up a lot of space and the crate alone was 20 percent of the cost of the machinery.

There was no way this was going to work.

Our initial team was full of tinkerers who were obsessed with Internet technologies. We dreamt of solutions that came more clearly from our experience with web technologies, not with clean water policy per se, giving us a fundamentally different perspective on approaching the problem than others with strictly policy backgrounds.

We had to figure out how to reduce the all-in costs of the machinery, including time, installation, transport, and so on, and we wanted to standardize and modularize the machinery to make it easy to deploy. We were confident that the math around customizing machines could be translated into a basket of products built around a standard design, especially because water quality was reasonably predictable if mapped by locality. Our goal: install and remove within an hour and ship the machine without any crates.

Largely out of ignorance, we started trying to build machines in various configurations. We needed to reduce space, maximize the number of machines we could fit in a standard 24-foot open-top truck, create quick- release connections, pre-calibrate and prep membranes, among other issues.

We came up with a standardized 500-liter-per-hour vertical membrane machine built inside a frame that would also protect it during transport (thus requiring no expensive packaging material) and that could be installed within minutes of arrival. Moreover, the standardization of the machine helped us reduce the costs of machinery by 75 percent without significant re-engineering of the components. It wasn’t perfect, but within a year and a half, after much trial and error, we had a machine that was cheaper and more efficient than those of our competitors—and nearly every one of them eventually began using our machine template and/or our supplier for their own water-cleaning systems.

Once we started deploying our machines, we realized that we were still quite far from our goal of reaching those who had the least access to clean water. Our goal was to get water to the last mile, but even our small and standardized plants required around 800 customers to make it financially feasible for a franchisee. And that fact kept us from reaching the small hamlets where water was an even more acute problem.

Our search for a solution to this problem found inspiration in a piece of technology very common in the developed world: the automated teller machine. For a “water ATM” to work, it would need a number of critical features: it would have to be secure and tamper-proof; it would have to be remotely controllable; it would need to be cashless; it would need to be insulated from extreme heat and be able to keep water cool; and it would have to have an easy-to-use interface that would reduce the complexity of behavior change.

We began to develop a low-cost, solar- powered, self-contained water-vending machine that would keep clean water secure and could be refilled by the nearest franchisee, thus reducing the capital, operating, and maintenance cost of each unit. It also helped our franchisees increase capacity utilization of their units by broadening their customer base; one franchise could distribute water at many widely distributed points. Our water ATMs are now operated by RFID-based smart cards that can be “topped up” in the same way that users buy talk time for prepaid cell phones: at any local store or through a roving representative. This device is central to our future—it has inspired a vision of a saturated marketplace with water ATMs on every corner that allow villagers and city-dwellers alike to get safe water when they want it.

Deploying the Water ATMs

We deployed the first water ATM in early 2011 and currently have about 40 of them in the field. We are at a point where we can build thousands of them. The real issue we now face is where exactly to put them? We’re currently working with the city of Delhi to bring clean drinking water to a resettlement colony on the outskirts of the city, and interest has already started coming in from other communities in Delhi and beyond for similar solutions.

The machines have low-cost controls based on programmable logic controllers that send SMS text messages on an event basis. That enables us to use a cloud-based control and diagnosis system for our filtration units. We now know everything our machines do in real time, including detailed information about the quality of the water they produce. We also have a set of operational data on our standardized machines, helping us develop a learning mechanism to predict and reduce failures.

To our distress, we discovered that franchisees in Rajasthan were using cooling systems to chill water. Basically, these were jerry-rigged air conditioning compressors with a coil of copper pipe submersed in an underground tank with filtered water, thus using the water as a heat-exchange medium and therefore refrigerating the water. This was a violation of our franchise agreement because the copper pipe was usually dirty and underground tanks were easily contaminated by particles introduced by gravity.

Franchisees needed a cooling solution, preferably off-grid, that would ensure the water stayed safe. With support from a large automobile manufacturer, we repurposed a variable-drive 12-V car compressor with a high-capacity chiller, which is used to cool electric car batteries, to make an inline water chiller. The system can be connected directly to solar panels without storage or an inverter, simply increasing its cooling capacity with intensity of the sun: an optimal application for solar and an incredibly powerful off-grid cooling solution.

Technology is an enabler, but the real wisdom is in building an operation that sustains excellence in service delivery at the last mile.

Our franchisee-based business model required some other sorts of engineering. We developed a prepay mechanism that gets the franchisee to pay for filtration capacity in advance. The franchisee pays for a mini- mum water balance on his machine either as a cash handover to a Sarvajal representative or via direct bank deposit. Since we have daily, monthly, seasonal, and annual water production data for each of our franchises, we are able to suggest an approximate amount of water balance recharge for the month. As the water balance nears completion, we sent alerts to the franchisee recommending recharge, to ensure that there is no downtime in water production.

All of this had to be managed by a cloud- based system that could handle the nuances of unreliable electricity, Internet, and mobile service. Most of these solutions were invented in a conference room with a bunch of Post-it notes, but this only captures a narrow part of the technical challenges we faced to turn the model we had conceived into something we could deliver.

We currently serve more than 150 villages across seven states in India, bringing clean drinking water to over 100,000 customers daily. Our goal is to increase the size of our impact tenfold over the next three years.

Sarvajal’s next task is to develop a point-of-dispensing disinfection solution that ensures any biological contamination in the supply chain of water to the ATM is neutralized. We’ve started by looking into UV LEDs that could function as a low-power method to disinfect water, and dosing solutions of iodine or chlorine that could ensure the longevity of filtered water (though people generally do not like the taste of chlorinated water when they have a choice otherwise).

Technology is an enabler, but the real wisdom is in building an operation that sustains excellence in service delivery at the last mile. There are many lessons in our experience in India that we believe could inspire similar solutions around the globe. We’ve found that the key to finding an answer is reducing the problem to one that is solvable, setting constraints, and innovating until you make it work. Every step along the way is an opportunity to engineer solutions that make a difference, and there are few ways to have more impact than ensuring all people have access to clean water.

This case study was written by Priyanka Chopra and Anand Shah.

Priyanka serves as the CTO of Sarvajal, overseeing product development of the water ATM, the cloud-based management system, and additional responsibility over finance. Prior to joining Sarvajal, Chopra was a senior consultant with IBM's Internal Strategy Group.

Anand is the founder of Sarvajal, a cleantech venture focused on providing clean water to villages and urban settlements. Shah was also the founding CEO of the Piramal.