Wireless business takes off

Expenditure on wireless technology is still low, but is expected to grow as new projects are designed with it in mind
Written by Arie Kahn, Contributor

Wireless and mobile business transactions will increase considerably over the next few years, as enterprises start looking at adding wireless extensions to their existing infrastructure so as to deliver business-critical solutions, said research and consulting firm Meta Group.

According to its new report, titled Wireless Adoption, Trends, and Issues, wireless and mobile transactions will account for nearly 20 percent of business-to-business (B2B) transaction volume and 25 percent of business-to-consumer (B2C) traffic by 2003 worldwide. The volume of wireless transactions today stands at below 5 percent.

"This year's study reveals that budget expenditures for wireless initiatives still represent a low percentage of overall IT budgets," said report author Jack Gold, vice president in Meta Group's Web & Collaboration Strategies (WCS) advisory service.

"Few companies are investing in wireless technologies for technology's sake. Rather, investments are being driven by specific enterprise projects that can be enabled by wireless and pervasive computing solutions," he said.

Gold cited field force automation applications such as sales force automation (SFA) as an example of a business-critical solution that would drive wireless initiatives. "It's mostly about people in the field (such as utility truck drivers, repairmen and delivery personnel) who need immediate updates of information to enable them to be somewhere, do something or inquire about something in real time (or near real time)," Gold explained.

In an email interview, Gold said that "there seems to be a propensity to go mobile in Asia Pacific, more so than in the US."

He attributed this to the fact that there are fewer users in Asia Pacific who have broadband access to the Internet via a dedicated PC, as compared with US users. Hence, mobile devices, which may act as the only access point for some Asian users, become more important.

Gold added that Asian users are more likely to pay for transactions and connections than US users, perhaps because they are more used to it.

These factors lead Gold to expect Asia Pacific, as well as Europe, to be "12 to 24 months ahead of the US in [wireless] deployments," though he could not provide a breakdown in geographical numbers.

Wireless planning processes are common in enterprises currently, Gold believes. The report, which is based on a survey of 351 professionals in North America, Europe/Middle East/Africa (EMEA), and Asia Pacific, indicates that lines of business (LOBs) typically drive the demand and justification for wireless, while IT leads the implementation process.

"LOBs usually are the drivers -- picking an application area, and potentially even the solution, and requesting IT to implement it. IT currently has little control, as most solutions are chosen tactically, with little long-term strategic direction," Gold said.

The study further revealed that pervasive device preferences would be "in great flux" for the next two to three years, and no single form factor would dominate the market. Vendors must be prepared to support many form factors, including smart phones, personal digital assistants (PDAs) and notebooks.

When asked if the issue of security is an impediment to the takeup of wireless transactions, Gold said that it isn't much of an impediment yet, but it "is becoming more of a concern going forward." He projected that security policies such as encryption, authentication and virtual private network (VPN) technology would be deployed to address the issue.

"We expect the ultimate recovery of the economy to reignite interest in wireless technologies," Gold said. "In the meantime, the next couple of years will be a go-slow time for most organisations, as pilots are deployed, rather than full production systems that enable a large number of users."

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