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Feature Article
October 2002


Getting Wired About The Wireless Enterprise

BY GARY GALENSKY

Enterprises and vertical markets are beginning to recognize the value of wireless applications, and some are already reaping the benefits of the "wireless enterprise." With employees spending, on average, nearly 50 percent of their time away from the desk, the mobility of wireless capability is a necessity -- rather than simply a "nice-to-have" -- for many companies.

But what is the wireless enterprise? Is it enabling the corporate campus with 802.11 wireless LAN (WLAN) technology so employees can connect to the network from meeting rooms, courtyards, and the parking lot? Is it eliminating printer cables and headphone cords via Bluetooth? Is it enabling mobile professionals to access corporate applications and data across the wireless wide-area network (WWAN) when traveling locally, nationally, and internationally? The answers are yes, yes, and yes -- at least to some degree. However, the relative importance of the technologies and applications is what's critical to the enterprise. While short-range wireless connectivity (i.e., Bluetooth) has its place, this article will focus on the other two, WLANs and the WWAN, and how they intersect when public WLANs are considered. We will explore the wireless enterprise's current state and value proposition, its challenges, and the popularity of certain applications.

WLAN Technology's Mass Market Appeal
WLAN technology, primarily that based on IEEE's 802.11b standard, is gaining mass-market appeal. The evidence is in WLAN equipment unit volumes and WLAN equipment revenues, and the inclusion of NICs, either as a standard feature or an option, by nearly all major laptop manufacturers. One report estimates that 80 percent of business laptops, 40 percent of PDAs, and 5 percent of GPRS and 3G phones will be WLAN-enabled by 2007 (Source: Analysis Research Limited).

What's the appeal of WLANs? They offer enterprises both vertically targeted solutions and horizontal, non-industry-specific extensions of the wired network. Examples of vertical solutions are patient care in the healthcare industry and warehouse management in distribution. For non-industry-specific uses, it's a way to extend the reach of the wired LAN to conference rooms, break rooms, and open-air centers on campus, all without adding expensive and hard-to-run cabling. Although more new conference rooms are wired in buildings, older ones may not be. CIOs and IT leaders that don't want to spend a large sum to wire buildings have a cost-effective, easy-to-install alternative. An enterprise-class WLAN access point is available for less than $1,000 and each NIC for under $100. So, for under $10,000, an IT director can purchase five access points (for coverage and redundancy) and 50 NICs to wirelessly enable an office or floor.

The wireless capability allows employees to connect to the corporate network from anywhere on campus, accessing e-mail, critical operating data, and presentations as fast as with a wired connection. In fact, the 11 Mbps (maximum) speed of the 802.11b WLAN connection typically isn�t the bottleneck in today�s networks, but rather it�s the application or the wired portion of the network. For companies that are moving and/or expanding operations to a new facility, WLANs are a quick way to get up and running. Once the fat pipe from the phone company�s central office is connected to the building or office, a WLAN access point (or several) can be installed and configured in a few hours, as compared to cycle times measured in days or weeks for laying cable for wired networks. Also, for businesses or "functions-within-a-business" that are nomadic in nature, like consulting or sales, nearly all employees have a laptop. When these road warriors go to another corporate office, it's easy to walk in, sit down, fire up their WLAN-enabled laptop, and get connected from anywhere. As corporations embrace, or at least accept, WLANs in the enterprise, the faster public WLANs will emerge.

Beyond the Firewall
Public WLANs have commanded the spotlight for a couple of years. Despite questions about the various business models, security flaws, and site-management challenges, public WLANs are top-of-mind for many industry analysts, start-ups, and telecom incumbents. A public WLAN blends WLAN technology with the traditional cellular service provider business model. WLAN access points are analogous to cellular base stations, NICs are analogous to handsets; in both cases, a service provider charges usage fees for network access. For wireless data, WLAN is often compared to 3G WWAN, but each has a different coverage-bandwidth-mobility profile.

Public WLANs extend beyond the enterprise�s firewall -- that's the benefit, and also the liability for many IT leaders. Their security concerns remain when corporate data are traversing the airwaves. Nonetheless, public WLANs are popping up at �hot spots� along the business traveler's "connectivity ribbon," that is at airports and airport lounges, hotels, and convention centers. The potential benefit for business travelers and enterprises is high. Instead of wasted time, or at best, low-productivity time, when waiting for a flight, public WLANs enable businesses travelers to establish high-speed connections to the Internet in an airline lounge or even at the gate. And for companies with virtual private network (VPN) capability, employees can connect to enterprise applications and corporate data at high speeds.

The Chicken-and-Egg Dilemma
The concept is simple, just turn your 802.11b-enabled laptop on in the vicinity of a wireless access point, wait for the user login screen to appear, and sign on, either through a pre-established account or using a credit card for single use. Sounds easy, right? Not so fast. Many start-ups have shut down trying to make the public WLAN market a reality. They either had faulty business plan assumptions -- particularly in the areas of user adoption, build-out schedule, and cost to establish a network footprint -- or poor execution. It's easy to understand the challenges these start-ups faced: to get customers (user adoption), a reasonable network footprint is required, but to get it among, say, the top 25 airports, takes considerable time, and thus money, as cash burns while waiting to finalize airport contracts. And yes, the contracts are negotiated and signed with each airport individually. This chicken-and-egg dilemma (i.e., what comes first, the customers that generate revenue or the network that entices customers?) is what led to the early public WLAN pioneers' downfall. But, there�s still hope. 

New business models have emerged, and new players have entered. Two examples are start-up service provider Boingo Wireless and veteran mobile operator VoiceStream. Boingo's business model is that of an aggregator, not building out any WLAN locations itself, but bringing together the fragmented networks of other operators and providing billing, support, and marketing services. Boingo has over 500 locations in its WLAN portfolio and continues to grow. As for VoiceStream, part of Deutsche Telecom AG, it purchased the assets of public WLAN pioneer MobileStar in 2001. 

VoiceStream has over 500 locations built out with plans for another 1,000 by year-end. Unlike Boingo, however, VoiceStream owns and operates its locations. Which of these business models, or some variant in-between, will work remains to be determined, but for the mobile professional, hope still exists for public WLAN�s high-speed, on-the-go connectivity. 

Giving Customers What They Want
Then there is the WWAN, which the enterprise is clearly using today for voice communications, but what about data? The key for the enterprise market is the applications that will run on 2.5G and 3G networks. Enterprises, with still-reduced IT spending budgets, will not loosen the purse strings for new wireless services unless the applications provide significant value. Hence, most wireless success stories are built around a specific application in a specific vertical market. Examples include field service automation for the construction industry, "m-clinical" solutions in pharmaceutical, instant quotes for insurance, and machine-to-machine (M2M) connectivity in oil and gas. However, there is one wireless application that is used in multiple industries, has mass appeal, adds value for business travelers, and increases productivity: e-mail. Surveys consistently cite e-mail as the Number One item business travelers want to access. For information-centric companies where personal productivity is tied to profits, e-mail access is especially valuable. 

Research In Motion's (RIM) BlackBerry enterprise solution exemplifies the appeal of wireless e-mail. RIM has over 320,000 subscribers across 14,000 organizations. BlackBerry, RIM's handheld wireless e-mail device, accounts for 80 percent of the company�s revenue. Not bad for a relative newcomer to the service provider world. BlackBerry's simplicity is key: remote access to e-mail with a small form factor, always-on device enabling anytime, anywhere communication. BlackBerry users know the value, not only to their personal productivity, but also in responsiveness and service levels for customers and internal employees. Maybe this is why Palm, Handspring, and the major wireless service providers are so interested in the e-mail and messaging space. 

Summary
There is no question that wireless data connectivity, whether via local or public WLAN, or the advancing cellular network, is gaining traction in the enterprise. The number of wirelessly enabled devices continues to grow and near-term investments in basic wireless applications like e-mail, connecting to the Internet, and in some cases, vertical-specific solutions, provide a solid foundation for future growth. As the number of productivity-enhancing applications increases, the enterprise will continue to invest more time and money in wireless solutions that meet business needs, bringing us one step closer to the truly wireless enterprise.

Gary Galensky (ggalensky@prtm.com) is a PRTM principal based in San Francisco. PRTM is a leading management consultancy to technology-driven business. With over 1,200 clients and 6,000 engagements in its 26-year history, the firm focuses on helping companies structure their organization, their strategy, their information technology, and their core business processes for productivity and profitability. Visit them online at www.prtm.com.

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