For B2B, time to cut the cord

By Mel Duvall, Inter@ctive Week

Will that be cash, charge or phone? Most wireless product seers predict it won't be very long before we'll begin using our cellular telephones, personal digital assistants and palmtops to purchase a wide range of goods and services.

Want to buy a coke? Walk up to a machine, press a few buttons on your phone, and the price of the can will show up on next month's phone bill. Need to buy a few items at the grocery store? Don't bother bringing along your wallet; your phone's all you'll need - and you'll be able to check with your spouse to see if you need to pick up another jug of milk while you're at it.

But while the applications for using your phone or wireless device to make consumer purchases are fairly obvious, the applications are less so in the business-to-business world. Is it feasible, or even practical, to use cell phones or palm devices to purchase millions of dollars worth of steel or to seal a seven-figure contract?

The answer, say those building the first generation of wireless B2B applications, is a simple yes. In fact, most industry analysts believe the next major boom in the B2B world will take place in the wireless arena.

"Folks always seem to be focused on the handsets and the technology," says Dan Taylor, vice president of the telecommunications practice at Internet systems integrator Proxicom. "They wonder if the handsets will be practical enough or if the transmission speeds will be fast enough."

Think creatively

"What you have to start doing is stay away from the technology and start thinking about the business applications. That's when you begin to see the possibilities."

Of course, you can't simply dismiss the limitations presented by the technology.

Today's wireless devices are lucky to transmit data at speeds of 14.4 kilobits per second. You remember 14.4 Kbps? That was back in the days when the Web was called the World Wide Wait.

And while manufacturers such as Nokia, Ericcson and Motorola continue to push out vastly improved versions of their wireless devices, they are a long way from replacing the functionality of the desktop.

Again, Taylor says, the key is to stop thinking about what the devices can do, and start thinking about what you want the devices to do.

"Think tweezers," he says.

The idea here is instead of trying to port the same applications used on a desktop to a wireless device, developers will focus on pulling out, or "tweezing", just those functions that would be of most benefit to the mobile user.

"Everybody wants to know what the killer app for the wireless space will be," Taylor says. "My expectation is you're not going to get many killer apps - you're going to get killer combos."

For example, applications are now being developed by companies like Proxicom to get key financial data into the hands of executives no matter where they are.

An application developed for one client provides a dot com's chief executive with a current reading of how many hits his or her site has had, the amount of revenue pulled in and the amount of profit or loss generated that day.

"That's pretty high-level stuff - but just think of how valuable that information is to have at the end of each business day," Taylor says.

ObjectSpace, a B2B integration company based in Dallas, is working on another prime example of application tweezing with travel reservation giant Galileo International.

David Norris, ObjectSpace's president, says while Galileo eventually wants to make all features of its online reservation system available via wireless devices, it isn't practical to do that today given transmission speeds.

Travelers checks

So instead, ObjectSpace has worked with Galileo to pull out the services it felt business travelers would need most. They concluded most don't want to book a flight on a cell phone.

Unless it's a very frequent trip, Norris says most travelers want to work out the de-tails, including car rental and hotel, with an agent. However, many travelers would like a way to change their itineraries - to get earlier or later flights - without having to talk to an agent.

ObjectSpace helped Galileo develop an application that allows a traveler to call up the itinerary on a wireless device and, by pushing a button, view a list of alternative flights. By simply selecting the alternative flight, it rebooks the traveler and sends a confirmation.

"Imagine sitting at the airport and finding out that your flight has been cancelled," Norris says. "There's a line of 50 people at the counter looking to get booked on the next flight, and there's only 25 seats available. By using this application, it could get you on that plane, without getting in line."

Norris says ObjectSpace is now working with Galileo to develop similar tweezed applications, such as a program that will allow you to upgrade your seat using your mileage program awards and pick out a seat on the plane.

Critical applications

"The key here is develop services that are critical enough that people will be willing to pay for them," Norris says.

ObjectSpace, which launched a platform called OpenBusiness for wireless applications this month, also is working with General Motors and its OnStar division to develop applications for GM's on-board communications system.

To date, most of the applications have been consumer-focused, such as the ability to get weather updates, traffic reports, news and stock quotes.

However, a big focus of future applications will be on the B2B front. In fact, GM wants to operate the OnStar system like an application service provider (ASP). Drivers would be able to subscribe to a wide range of applications from third-party providers.

Mark Ein, head of Venturehouse Group, a Washington-based business incubator that is focusing on the wireless space, says there are still a relatively small number of companies developing applications in the wireless arena. He expects that to change dramatically over the next year.

"Until now, we've had the chicken and the egg problem," Ein says.

For example, when Ein helped found Aether Systems four years ago, a red-hot wireless applications firm, he says the communications companies wanted to see practical applications before they would upgrade their systems to accommodate the applications. But Aether couldn't show the applications until they upgraded their networks.

As a result, wireless application development is much further along in Europe, where the infrastructure is in place.

But now that the wireless infrastructure is getting established in North America, Ein believes companies here will begin to make up the lost ground. The early leaders that stand out on this side of the ocean include Aether, Phone.com, 724 Solutions, Nextel and Research in Motion.

Is this, then, the year of wireless B2B applications?

Proxicom's Taylor thinks it's early yet. Wireless transmission speeds are expected to go from the current rate of about 14.4 Kbps, to 110 Kbps later this year. In 2001 they'll begin to approach 364 kbps, and in 2002, third-generation wireless technologies are expected to push speeds beyond 2 megabits per second.

"By the time we get to there, we won't recognize computing," he says. "It will have gone through another transformation."