Is the next wave wireless?

With wireless poised to be the next big wave for e-business, companies are developing technology and strategies to overcome the obstacles that may lie ahead.

The market for wireless is set to explode. But is it real, or is it just more hype?

You walk up to a car salesman, ready to plunk down $50,000 for a shiny, new SUV, and the salesman says, "Are you sure you need such an expensive vehicle?"

And then the shrill of your alarm clock awakens you from your dream. But if you're a solutions provider and you've got customers foaming at the mouth to get on the wireless bandwagon, it might be prudent to revisit that dream.

For sure, wireless has immense potential. It's understandable if business owners, fearful of missing the boat, press for a piece of the action. And it might be tempting to unquestioningly comply with their cravings.

But wireless isn't for everyone, and those who rush into hasty deployments-just because it's possible-could be shooting themselves in the foot. And if you're recommending it to your customers, it could come back to haunt you. That's why most solutions providers have yet to rake in megaprofits from the wireless revolution. While it may seem like easy money, they also realize the potential hazards and are urging patience.

It's an approach that, in the long run, should pay off in terms of customer satisfaction and trust.

When it comes to wireless deployments, "some people are making money, but they're not making big money," notes Pat Morrissey, director of business planning and marketing at Scient.

If business operators spend big bucks on unnecessary wireless projects that your company recommends, only to find their customers and/or employees dislike or don't use them, it's possible they'll blame you. God forbid the wireless package you design or install fails and loses critical business data.

"We have this conversation all the time with large enterprises," says Morrissey. "They say, 'We've got to have this wireless, e-commerce thing.' We say, 'Time out.' "

Scient isn't the only solutions provider preaching caution. Despite the explosion of wireless Internet access predicted by every analyst under the sun, the market for integrators is still in diapers. While many solutions providers are honing their wireless chops, key questions remain: Should you take the wireless plunge? And, if so, where?

Waiting in vain?

Just what kind of opportunity awaits wireless integrators?

On paper, it's golden. Research outfit Killen & Associates says sales of wireless Internet applications will reach $37.5 billion by 2002. The Strategis Group also predicts wireless equipment and services will total $8 billion in the United States by 2004.

But many solutions builders believe there's a thick layer of hype covering the wireless opportunity. "I've been at this company for 25 years," says Wick Keating, VP of IT consulting firm American Management Systems Inc. "I saw the client/server wave and then the e-business wave. And now everybody says a wireless wave is coming. But the jury is out on all of this wireless stuff. Personally, I question some of the projections about lots of e-commerce being done over cell phones and PalmPilots."

Despite the cynicism, Keating won't get caught with his pants down should this tsunami reach shore. The company is mulling partnerships with the likes of Ericsson and is testing the latest wireless technologies in its labs.

Many Web integrators, however, are less cynical, making big bets that the impressive hockey-stick prognostications will reach fruition. But to say that payday already has arrived is a stretch. Reston, Va.-based Proxicom claims to have retrained 80 percent of its billable workforce onto wireless technologies and strategies. With just 5 percent to 10 percent of its business coming from pure wireless engagements, the Web integrator's chips are on the table. "We know it's going to take off," asserts Proxicom CTO Craig Miller.

But even Proxicom's due diligence gets lukewarm results. The company recently surveyed some 75 Fortune 1000 companies about their e-business practices, including viewpoints on wireless. Surprisingly, 52 percent of the respondents said wireless transactions were still at least five years away. But Proxicom puts a positive spin on the results. With consumer use of wireless devices exploding, Miller is certain these timetables will come crashing down. "The complacency of the industry right now presents a huge opportunity. When the light goes on, we'll be ready," says Miller. Other solutions builders say the market already is starting to take off. Scient's Morrissey, for example, says about 20 of the company's 61 "business engagements" started in the last quarter have at least a wireless component to them. Viant, meanwhile, claims it is engaged in some 35 wireless projects right now.

"Until about two months ago, if you asked me for the number of those situations, I would have said five or six," says Mark Powell, Viant's global wireless practice leader.

Where the chips lie

But even if integrators are sold on the viability of wireless, where on earth will the money go? After all, integrators can bone up on everything from wireless content design, to wireless app development and back-end integration, to top-level strategy consulting.

One proven moneymaker is the wireless WAN arena, where applications have been up and running for a number of years in warehouse distribution, as well as in other vertical markets such as field service repairs, utilities and public safety.

Way back in 1992, for example, retail giant Sears first rolled out a wireless application to its field-service technicians. By 1998, the application had blossomed to include 10,000 technicians nationwide. With consulting from Nettech (recently renamed Broadbeam), the Sears deployment moved over time from DOS to Windows, and from the Ardis first-generation (1G) wireless network to support for multiple wireless nets, including satellite.

Many such vertical apps have been implemented with the help of consulting arms from companies specializing in wireless software, such as Nettech/ Broadbeam, handheld device manufacturers like ICL/Fujitsu, and modem makers such as Sierra Wireless. But now that applications are starting to target larger B2B and B2C audiences, mainstream systems integrators, OEMs and ISVs are becoming more and more active in the wireless space.

Aside from noting the obvious efficiency of such a setup, an integrator should point out to clients teetering on the edge of taking the wireless plunge that doing so can be cost-effective. Instead of installing expensive and maintenance-intensive servers in satellite offices, stores or other outposts, a company can use inexpensive wireless devices to continually transmit data-over the Internet or other networks-to wireless-enabled servers back at headquarters.

For example, Sears achieved a 50 percent reduction in the number of phone calls from technicians to order parts or confirm information, in addition to other cost savings.

After implementing a wireless WAN solution from FieldCentrix, Mesa Energy Systems saw total business sold through 35 field technicians skyrocket, from $3,500 to $79,000 per month. And, MCI claims to have saved nearly $7 million through a wireless dispatch and service deployment, also implemented through Nettech/Broadbeam.

Betting on e-commerce

While wireless app development and integration is a ripening opportunity, many wireless newcomers are banking on strategy consulting and the promise of e-commerce integration.

In fact, Web integrators like Scient and Proxicom have spread their wireless expertise across all divisions, instead of building a standalone wireless practice. The objective: to build wireless components into all projects, rather than sell that expertise on its own.

Take Emerging Technology Solutions (ETS), a unit of Veridian, the $600-million-per-year integrator from Fairfax, Va. ETS estimates that 90 percent of its clients will integrate wireless technology in the next several years, with wireless being integrated into 70 percent of its projects within the next 18 months.

"We would hesitate to encourage clients to pursue a wireless Internet strategy that is disconnected, in any way, from their Web strategy," says Paul Hemming, senior VP of the newly formed mobile and wireless group at iXL. "Yes, they're different. But they ultimately need to come together at some point."

Pitching this ideal to customers is perhaps wireless's biggest business - first-stage strategy consulting.

For Proxicom, it's definitely paving the way. But unlike app developers and content designers, wireless strategists take much longer to train. After all, with very little wireless e-commerce deploy- ments to read from, wireless strategists all are starting from scratch. "It's so new, there isn't much experience to draw from," says Proxicom's Miller.

Still, training the strategists is probably the best move for solutions builders. Among Proxicom's handful of pure wireless customers, most want to talk strategy first. USA Today, for example, hired Proxicom to help establish a game plan for the paper's wireless presence. Instead of merely repurposing its newspaper content for wireless distribution, USA Today is thinking about offering travel information, sports scores, headlines and weather to its business-traveler readership.

Risky business

While wireless strategy may be an easy sell, expect some resistance from customers should you advise them to venture slowly into their wireless applications. But even with vastly improving technologies, entrusting North America's cellular wireless system, as it now exists, to reliably, securely and rapidly carry critical business information is risky business.

"Consistent quality of service is not there even in terrestrial [wired] conventional networks today," says John Stehman, principal analyst for The Robert Frances Group. "You can imagine that wireless will have a lot more problems. ... That's why a lot of enterprises are not going to move any mission-critical applications to wireless. It's not going to happen. It's too unpredictable."

Busy signals, scratchy audio that suddenly cuts out and an inability to connect at all are still commonplace occurrences with simple voice calls on cell phones. When they limit a person's ability to chat, they're usually just annoyances. But the same shaky networks carrying those conversations are being used to host the much-hyped wireless Web.

Add slothful data-transmission speed, tiny WAP-phone displays, pricey calling plans and other monkey wrenches, and you could have a recipe for disappointment in clients, their employees and their customers.

"The thing to keep in mind is that the wireless infrastructure in the United States is beneath contempt if you compare it to any civilized country in the world and even some developing countries," says Web usability guru Jakob Nielson. "I'm in the middle of Silicon Valley and sometimes I can't get a [cellular voice] connection."

The third generation (3G) of wireless in North America will be a more robust system that will offer secure, seamless connectivity well beyond the snail's-pace transmission speeds now endured by the wishful with the WAP phones. As recently as Aug. 15, Lucent announced it managed to complete a wireless transmission with 3G technology, a call that reached 153 kilobits per second, at least 10 times the data-transmission rate of most wireless nets today.

Generally speaking, wireless networks in the United States are still at the second-generation (2G) level. Scott Gode of Microsoft's new Mobility unit expects that it won't be until 2001 that U.S. networks even gain "2.5G" status, attaining speeds at that point of about 75Kbps to 100Kbps. Higher bandwidths like that will allow for fuller-bodied applications, Gode explains. Not coincidentally, Microsoft also anticipates waiting until the 2001 time frame to bring out its emerging wireless server for telecommunications carriers, code-named Airstream.

But WAP phones and PDAs are hardly the only kinds of wireless mobile devices. Pagers and notebook PCs are both widely in use, as are in-vehicle wireless systems. Microsoft's Gode predicts a plethora of different kinds of mobile devices in coming years.

The Redmond, Wash., giant currently is partnering with Ericsson, Sony, Benefon and Samsung on joint development of "feature phones," which will come with operating system independent, dual-mode browsers, furnishing a choice of WAP (WML) or HTML display.

Further into the future, within the 2.5G to 3G time frame, Microsoft and Samsung will launch their jointly developed large smart phone—code-named Stinger—designed to deliver "richer" applications with unified messaging to mobile professionals.

Whether that translates into richer opportunity for wireless integrators remains to be seen. For now, it's just one more item for the wireless buzz factory.

Additional reporting by Jacqueline Emigh and Chris DeVoney.