Corporates get a case of the wireless jitters
Too many systems, too many operators
Analysis Fierce competition in the corporate and public sectors means mobile operators are under constant price pressure as they bid to steal each others’ lunch. This has resulted in a trend towards lower voice tariffs which is likely to continue. Mobile data services in the form of GPRS and 3G connectivity represent an opportunity to make up the shortfall and to recoup some of the investment operators have made in wireless data licences and infrastructure.
The problem is, though, that operators need to achieve a high level of penetration in the enterprise sector for it to be worthwhile financially. This stems from the fact that there is a limit to how much a company will pay per month for one of its employees to be connected. It might be possible to justify €100 to €200 for a high powered executive or top sales rep using a 3G card in their laptop, but organisations will only foot these kinds of bills for a limited number of VIP users.
For operators to make money, they need to drive adoption beyond the VIPs to rank and file mobile employees. Depending on the size and nature of the organisation, these could number hundreds or even thousands, creating the volumes necessary to offset the limit on justifiable spending per user.
Fortunately for the operators, Quocirca research suggests that many customers are receptive to the idea of broad wireless adoption with typical targets being middle managers, sales reps, field service engineers and so on. Depending on the application, they see wireless as a way of potentially reducing administration overheads, speeding up business processes, creating better business visibility and facilitating more rapid and effective decision making. That’s the theory, and indications are that over half of Europe’s larger corporations have invested in pilot projects to begin testing it. On the surface, therefore the picture is quite promising.
However, this interest in larger-scale deployment is a double-edged sword. For the operator, it provides a degree of confidence that the volume of business they are looking for is likely to be there at some point in the future. For customers, though, it creates some serious challenges.
Complexity and uncertainty
This was confirmed in a Quocirca’s most recent wireless study involving 200 early GPRS adopters (see www.quocirca.com/report_entwir.htm). The first challenge identified by this audience was the complexity and uncertainty of the wireless technology and service landscape. Respondents highlighted a need to consider three different wireless networks (GPRS, 3G and Wi-Fi), at least three different device classes (laptops, PDAs and smartphones) and plethora of device operating systems (Microsoft, Palm, Symbian, Linux, Blackberry, etc) when trying to formulate a wireless strategy. Furthermore, the landscape is changing rapidly with devices acquiring “old model” status within a few months and service providers constantly experimenting with new offerings and commercial delivery mechanisms.
Trying to make a sound large-scale investment decision against this background is very difficult. The last thing anyone wants is to commit significant money, time and resource to deploying equipment or services that might quickly become obsolete or out-positioned by competitive offerings. Lessons learned during the dotcom boom come into sharp focus.
But it’s not just about lack of maturity and stability on the supplier side of the equation. Even if organisations work their way through the maze of networks and devices, building the business case to scale up wireless deployments can be a problem. This stems from the fact that most early projects (at least 70 per cent according to the research) have been based on wireless email, an application whose benefits are quite “soft”, i.e. difficult to translate into a hard financial return on investment (ROI) case. This might not be an issue when considering pilots, which are often justified on the basis of “gut feel”, but a more precise and objective case is required when the board is being asked to approve funding for larger scale activity.
Together with a series of operational challenges also identified by our early adopters, it is not surprising that we came across very few organisations that had moved beyond the pilot or small scale rollout stage.
When considering how activity will evolve from here, it is tempting to look towards a point in time when the technology and service arena settles down enough to make future-proof decision-making easier. However, given that this time is never likely to come, it is more useful to look for ways in which the complexity and change can be managed.
Suppliers have a big role to play in this. For those organisations looking for a more open strategy, the IT vendor community has already developed a range of infrastructure and middleware solutions that support multiple client device types and operating systems, minimising the risks associated with this dynamic world. Multi-network services from operators that encompass GPRS, 3G, Wi-Fi, and even traditional dial-up in the case of players such as iPass, will similarly protect customers from the evolving network landscape. These are slated for availability towards the end of 2004.
For those willing to build a strategy around specific supplier offerings, such as RIM Blackberry or Microsoft, there are already pre-integrated “end-to-end” solutions available. Going down this route can appear to be limiting in terms of future flexibility but these solutions are evolving to become more open. The famed Blackberry email client has already been embedded in devices from other manufacturers such as Siemens and Motorola, and it will not be long before we see the first Blackberry-enabled Pocket PC.
To overcome some of the business case and operational challenges, suppliers need to do more to propagate ideas and experiences from early adopters. This will help others to scope pilots, build business cases and plan rollouts more effectively.
In the meantime, whilst there are no real showstoppers for organisations wishing to move forwards aggressively with wireless deployments, we should be cautious about assuming a short term explosion in activity. The signs are good, but it is still early days and both corporates and government will move at their own pace.
A report based on the research discussed in this article entitled "Wireless Update – Scaling it Up" is available here.