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Working With Wireless

Address ownership, integration and security and this rapidly evolving world will be poised (yet again) to change how companies operate and communicate.


April 1, 2004  


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Wireless remains one of the fastest-developing sectors in telecommunications, so it should come as no surprise that the relationship between wireless and business users is rapidly evolving.

Just a few years ago, many IT and telecom managers treated wireless as a disruptive technology, which is understandable when one considers the pressures placed on IT departments generally.

In the months leading up to the new millennium, corporate IT experts were consumed with preparing for Y2K. In the years immediately following, these same people played catch-up — tackling projects that needed attention, but had been relegated to the back burner by Y2K concerns.

Now, most of those delayed projects have been addressed, and analysts have observed increased awareness, understanding and use of wireless devices and services in the business environment. There’s still plenty of room for improvement, but companies are beginning to place new emphasis on wireless.

As an example, Coca-Cola Bottling Co. currently provides its field service technicians with handheld computers from Symbol Technologies Inc. The computers, running Microsoft Pocket PC and equipped with integrated bar code scanners, enable technicians to more efficiently service and repair tens of thousands of vending machines. In addition, sales managers use Symbol handhelds to take and transmit orders.

Symbol also announced this past November that it is supplying 39,500 wireless bar code scanners to Home Depot. With a range of 150 feet and a 10-hour battery life, they will make it easier for Home Depot’s cashiers to ring up sales of lumber, garden supplies, and other large items and perform price checks for customers.

By untethering the cashiers, Home Depot expects it will be able to provide more responsive customer service.

Finally, Petro-Canada recently selected Airlink Communication’s 1X Raven and Pinpoint products for deployment into their fleet of trucks that deliver petroleum products to thousands of Canadian homes and businesses on a weekly basis.

The Airlink products, coupled with Bell Mobility’s 1X wireless network, allow Petro-Canada to wirelessly and reliably send new orders to trucks in real time.

Airlink says its CDMA 1x black boxes allow companies to take readings, monitor operations or locate fleet vehicles without the need for extra effort or additional personnel. They can be used to manage mobile assets and evaluate supply chain logistics.

Petro-Canada expects to improve customer delivery time and reduce delivery costs.

“With cellular long distance charges, unreliable radio frequency trucking connections in outlying regions, and very costly satellite communication, we had to rely on a combination of different technologies to get orders to the trucks and confirmation of deliveries back to the regional distribution centres,” said Phil Lamarche, Manager of Logistics, Petro-Canada’s downstream marketing division. “With this migration to 1X technology, we will save our downstream marketers time and money right from the start.”

Going wireless, he says, will result in the elimination of many manual transactions. Plans call for 400 Petro-Canada trucks to be outfitted with wireless gadgetry, the bulk of which will be CDMA-enabled.

“There’s no question that CDMA is more expensive than RF, but then the data transmission speed and the quality of the connection is that much better,” says Lamarche. “But there are a number of other quality factors that figure in there that make it justifiable to pay a little more a month for a CDMA line on a 1x service than pay the straight RF rate.”

“Vendors were talking to us about their new technologies in the past, but there were not a lot of hardware devices that were usable in the type of environment that we operate in. Certainly, we couldn’t look at going with an AirLink card simply because it wasn’t practical in a fuel delivery truck. When the equipment became ruggedized we were able to take a serious look at it.”

The growing adoption of wireless initiatives is creating challenges and opportunities for equipment vendors and service providers.

A recent report, entitled Deploying X Internet Technology, from Forrester Research Inc. predicts that over the next decade, more firms will branch out and use the Internet to connect assets of all types, including industrial machinery, home appliances, pallets and cases, people and animals, and even individual supply chain units.”

Forrester calls this the extended Internet or X Internet. Wireless technology is crucial to making it a reality, but so is an understanding of the benefits such technology can deliver to business.

Forrester surveyed 172 executives on awareness and adoption of wireless technologies. While the survey found 60% of those polled were familiar with wireless equipment such as handheld data devices, most executives were uncomfortable with current wireless networking technologies such as 2.5G and Wi-Fi, and even fewer understood applications such as telematics.

Adoption rates were even lower: Fewer than 50% of firms interviewed had deployed handheld data devices, while fewer than 30% of respondents reported use of Wi-Fi.

Forrester advises IT managers to seek executive support and long-term commitment for X Internet projects. “X Internet implementations claim large budgets,” the firm writes, “but cost isn’t the only reason to get executive buy-in.

These projects set out to reduce costs or go after new revenue opportunities. In both cases, more than two-thirds of (survey) respondents agree that this justifies involvement at the top.”

As companies consider how to use wireless in their businesses, three issues are paramount: ownership, integration and security. The ownership issue is not confined to hardware for it includes ownership of the wireless service itself.

Traditionally, individuals and departments needing wireless services often made their own purchasing decisions and submitted expense claims for their use.

Now, companies are recognizing there are benefits to centralized procurement and control, particularly when the employee using the wireless service deals directly with the company’s customers.

Brian Sharwood of technology research and consulting firm SeaBoard Group in Toronto points out that if a salesperson leaves a company and takes his or her mobile phone number to a competitor, clients and sales will follow.

“Telecom managers don’t like that,” he says. ” What they want is to have control of that phone number. In a normal PBX environment, a salesperson leaves and calls are redirected, or the phone is given to the person hired to replace him or her. Companies have control over the environment and over phone calls.”

Of course, PBXs deliver more than just control. Companies are starting to demand more PBX-type features from their wireless services, including integration of wireless phones and wireless messaging into the PBX environment. The goal is a single number with a single mailbox for each employee. It should work no matter where they are — in the office, on the road or around the world — and it should be owned and managed by the company.

Integration of wireless into a company’s operations should provide cost savings, too. Return on investment (ROI) is one of the top issues companies assess when considering wireless purchases.

In its 2002 Next Generation Mobile Enterprise Report, Frost & Sullivan warned that it will be the responsibility of mobile operators to not only effectively market, sell and service mobile data solutions to their installed base of corporate customers, but also identify new distribution channels.

Brent Iadoral, the firm’s com-munications industry analyst, says that ROI is easier to demonstrate for field service than it is for mobile office applications.

“How do you quantify access to your e-mail or being able to access a calendar or contacts list? Some of it is time savings, but when you look at a field service application, you can actually get a hard ROI there.”

Iadorola expects mobile operators will increasingly work with solutions vendors to target specific vertical
markets. “Today, we’re seeing them more focused on the horizontal mobile applications,” he says. “However, I think that trend is changing.”

The change is being driven by a desire for customized solutions. Frost & Sullivan notes that success will be measured by the ability to efficiently link the back office to mobile devices so executives, sales personnel, and field force employees have real-time access to customized, mission-critical data and applications.

SeaBoard Group puts the onus on carriers to deliver. “Canada’s wireless carriers look at business merely as consumers of buckets of minutes. There are few special features, few service innovations on offer to business wireless users,” the firm writes in a report entitled Canada’s Wireless Wonderland.

“Wireless carriers have done little to tie wireless services more closely to the rest of the enterprise communications model.”

If anything remains constant in wireless, it’s security concerns — either real or perceived. Wireless has forced corporate IT personnel to look for new ways to keep company data and networks safe.

Much of this concern currently focuses on Wireless Local Area Network (WLAN) products, sales of which have grown steadily in recent years. The low cost of equipment, ease of installation and use, and convenience of connecting computers or PDAs to a network without running cables has made them popular.

But consumer-targeted Wireless LANs pose special problems for companies, as employees are tempted to buy and install the equipment on corporate networks without the IT department’s blessing. The result is that all IT departments must be on the watch for so-called “rogue hotspots”.

“We track shipment numbers of wireless LANs and one of the things we can plainly see is that there seems to be a large number of wireless access points and devices being shipped by the low-end vendors, that you can get at retail,” says Jaclynn Anderson of the wireless data group at Scottsdale, Arizona-based In-Stat/MDR.

“It’s our belief that these low-cost devices are not necessarily being used in the home.” In Wireless Security, published in December 2003, In-Stat/MDR predicted that the WLAN security market, which includes gateways and intrusion detection systems (IDS), will grow from US$151 million in 2003 to US$547-million by 2008. “Interestingly, prices for WLAN equipment has pushed revenue forecasts for access points and client devices downward, whereas the prices for gateways and IDSs is expected to hold more constant,” the report notes. “As wireless LANs become more popular with lowering prices, the demand for the accompanying security protocols will rise and prices will remain constant.”

Anderson adds it’s unlikely in today’s environment that an IT department will consider wireless without considering how to protect its data and network. “In most situations, if a company is planning to install some kind of wireless network they’re really going to take security into account,” she says.

Budget

Security solutions are only one aspect of a wireless LAN deployment. “There are radio servers, there’s encryption, there are a variety of solutions that can be brought to bear depending on what a company needs,” says Wai Sing Lee, wireless industry analyst at Frost & Sullivan.

Lee says companies must take several factors into account when assessing wireless security.

“It depends on the size of the company, what they’re trying to secure, and the size of their budget,” he explains.

Lee adds that regardless of any other issues that arise, ROI remains a fundamental consideration. “If there’s no payback for companies, or if the hurdle is too high, companies will not do it,” he says. “They’ll just wait.”

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CELL PHONES OF THE FUTURE TO PACK PLENTY OF POWER

Cell phones might not be radically different in how they look in coming years, but what they will enable users to do will change significantly, according to In-Stat/MDR.

The high-tech market research firm reports that high-speed data access, Wi-Fi functionality, high-quality video cameras, or viewing broadcast TV, are just some of the future functionalities that are on the horizon for cell phone users. “Service providers and manufacturers are paying attention to the latest trends because they can take off quickly in the fast-changing global cellular business,” says Neil Strother, a senior analyst with the firm. “No one wants to be caught short when the next camera-phone phenomenon crops up.”

“Some of this technology already exists; it just hasn’t been widely deployed or accepted. Other technologies, such as fuel cells, are just a year or so away from commercial viability. Still other developments won’t arrive in serious volumes until the latter part of this decade.” In an attempt to gauge end-user expectations for future cell phones, In-Stat/MDR conducted a survey that found that most respondents had knowledge about the latest technologies, but were more interested in sensible benefits. For instance, along with location-based services, access to e-mail ranked highest among those surveyed.

The report, which is priced at US$2,995, outlines what to expect from Wi-Fi on handsets and also includes shipment forecasts for many new technologies.

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CUTTING THE CORD

For smaller companies, integration of wireless is taking a more radical form as firms cut the cords on their desk phones and replace them with wireless. The same option could be available to large corporations in the near future.

This past October, Microcell Telecommunications Inc. launched CityFido in the Greater Vancouver Area.

Its success will be driven by a combination of flat rate local calling and the ability for customers to switch from a wired local service to CityFido without changing their phone number. The latter is made possible by Microcell’s status as a Competitive Local Exchange Carrier (CLEC).

The same month CityFido launched, SeaBoard Group published Canada’s Wireless Wonderland, in which the consultancy predicts small businesses may realize simplified management and significant cost savings if they can reduce the number of lines they pay for by transferring desk numbers to wireless phones. In one example, the report shows how a small business could save 40% on connection costs.

Brian Sharwood, one of the report’s authors, expects Rogers Wireless to be next to become a CLEC because “they have nothing to lose”.

“They have intensive contacts in the business community, they’re known already for business uses, they have coverage, they have European roaming with their GSM phones… they’ve got what it takes,” he notes. “They just don’t have the business experience on the PBX side and they need to learn that, or partner with somebody. But the opportunity is huge for them.”

If CityFido is a success, and if Rogers enters the wireless CLEC market, Sharwood expects incumbent local service providers will follow suit, making wireless substitution a viable option for large corporations.

“Bell can only ignore that for so long, because at some point somebody’s going to (develop and deliver enterprise solutions that integrate wireless and wireline). And it might as well be Bell because they’re in these markets already.”

“Bell and TELUS probably have the most opportunity here,” he adds, “but they also don’t want to gut the wireline side.”

Trevor Marshall is a Toronto-based writer and observer of the Canadian wireless industry. He can be reached at tpmarshall@eol.ca.


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