InformationWeek
Defining The Business Value Of Technology
December 13, 1999
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Wireless Net access is creating new opportunities
By Bob Wallace
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echnology that provides wireless access to the Internet--until recently, a nifty gimmick for hard-core enthusiasts--is hitting the mainstream. Businesses that are not plugged in to the trend risk losing online sales and the opportunity to improve internal processes. But implementing wireless applications presents its own challenges, including design, security, and bandwidth issues.Companies are forging ahead nonetheless. Delta Air Lines Inc. said last week that it's testing a Web-based wireless travel service that provides flight information and ticket purchasing to customers. Amazon.com Inc. formed an alliance with Sprint to create a wireless shopping service. Barnesandnoble.com this month launched a version of its Web site that can be accessed by wireless devices.
Barnesandnoble.com's BN.com On The Go lets customers use a 3Com Corp. Palm VII and the cellular phone network to search for and buy books and music, view top 10 lists, locate the nearest Barnes & Noble store, and send electronic greeting cards. "This opens up so many more opportunities, allowing someone to purchase any time, from anywhere, on any platform," says Carl Rosendorf, Barnesandnoble.com's senior VP of marketing, business development, and strategy. "That's the greatest win for E-commerce."
MasterCard International Inc. uses wireless devices that let taxis accept its cards for payment. It has also launched a wireless ATM locator service for Palm Pilot users, and recently created a Global Mobile Commerce Team to explore other wireless opportunities. "The ultimate for us would be for everyone to be able to use their mobile units as a point-of-sale device that they could use to research, order, and buy with our cards," says Art Kranzley, MasterCard's senior VP for E-commerce and emerging technologies.
Wireless Web access is seen as the key to keeping customers connected without boundaries, enabling businesses to sell information, services, and products from their E-commerce sites anytime, anywhere. "What's changed is the explosion of the Internet, and the realization at a consumer level about how much information is available," says Jeff Sass, executive VP of BarPoint.com, which last week began offering wireless access to its site. "A lot of that information is more valuable when you can access it instantly."
For example, BarPoint.com's wireless service lets consumers pull product information--reviews, prices, and purchasing options--from its site using mobile devices. "Consumers can get product information from the Internet simply by entering a universal product code from anywhere," Sass says. "If you're walking down an aisle at a store and enter the UPC code, you can instantly get information to help you make a purchasing decision."
Business-to-consumer applications are generating a lot of buzz, but many companies are adopting wireless Internet-access devices internally, and more are expected to follow. Cahners In-Stat Group forecasts that the number of employees in companies with more than 1,000 employees that are using mobile devices to transmit data will rise from 784,000 today to 9 million by 2003. Dataquest predicts the installed base of mobile terminals in the North America will double from 75 million in 1998 to 150 million by 2003.
Businesses such as Federal Express Corp. and United Parcel Service of America Inc. have been employing handheld wireless devices for several years, but the units usually connect to a private network and generally are designed to serve one vertical industry and transfer a specific type of data--say, the location of a package on the road. New wireless devices, which usually access the Web using cellular or other wireless networks, give employees access to the Web, E-mail, databases, and intranets or extranets. "That's why we see the real push coming for data," says Rebecca Diercks, Cahners In-Stat's wireless research director.
Media conglomerate Bertelsmann AG plans to give junior-level executives wireless access to a company portal it's building using software from Zap Business Communication Systems Inc. By early next year, users will be able to access the portal, called JuniorNet, from almost anywhere. "Say I'm about to give a presentation and I want to pull up a profile on one of our employees," says Thomas Schroter, a project manager in Bertelsmann's management development division in Hamburg, Germany. "With my cellular phone, I could contact the JuniorNet and get the information instantly."
Bertelsmann will add the wireless feature by using a new version of Zap's Ucone portal software, introduced last week, that integrates the Wireless Application Protocol--an emerging standard for the delivery of wireless information and telephony services to mobile phones and other wireless appliances--so users can access company intranets from Internet-enabled mobile phones and 3Com Palm VIIs.
Most businesses are just beginning to adopt wireless technology for business-to-consumer services and internal business processes, says Mark Zohar, a senior analyst at Forrester Research. "We're seeing a few businesses doing E-commerce services and expect large companies to move quickly to provide wireless workers access to business applications," he says.
Vendors are moving to provide the products and services companies need to deploy wireless applications. Last week, IBM and telecom giant Nokia teamed to offer developers a software toolkit, a testing facility, technical assistance, and Wireless Application Protocol devices for application development.
Microsoft and Ericsson formed a joint venture to develop applications and integration services that let mobile phones access Web sites and intranets. Ericsson plans to license its Wireless Application Protocol stack to Microsoft, and Microsoft will adopt its forthcoming wireless software for Ericsson mobile phones, the companies say. Wireless computing is emerging as one of Microsoft's most important initiatives. It plans to ship an Internet Explorer "microbrowser"--the first component of its new Mobile Explorer platform for wireless devices--in the first quarter.
Oracle is also pushing wireless technology. Last month, it launched a joint venture with Symbian--an alliance among Ericsson, Matsushita, Motorola, Nokia, and Psion--to develop applications for Symbian's EPOC operating system. "This deal will let us get the next generation of applications for mobile phones into the enterprise," says Jacob Christfort, Oracle's director of solutions development for mobile and handheld products.
Oracle is working with Symbian to optimize a version of Oracle8i Lite for EPOC phones. It's also developing apps that give field reps up-to-the-minute customer information and the ability to input orders via a browser. "Useful business applications will be much more data intensive than the things you can typically get on a mobile device today," Christfort says.
Investors seem convinced that wireless technology is the wave of the future. As of last week, shares of companies that provide wireless services were up 200% for the year. Qualcomm's stock has soared 1,400% this year. AT&T hopes to cash in on the interest in wireless stocks: Last week, it revealed plans to create a tracking stock for a new wireless business to generate funds to expand its network footprint, boost service quality, and acquire companies.
Most analysts agree that it's time for IT executives who haven't been following the wireless market to bone up. "If you're building on your E-business strategy or still are working on one, wireless should be a significant and complementary part of it," says Daryl Stirling, a senior wireless analyst at the Yankee Group.
As with most emerging technologies, implementation can be a challenge. IT managers and vendors must adapt applications originally designed for non-wireless machines to work with wireless devices. They also must cope with weaknesses in wireless networks--bandwidth constraints and lack of interoperability between the technologies in use. And there's the need to address security so customers feel comfortable performing E-commerce transactions wirelessly (see sidebar story, "Vendors Address Issue Of Security For Wireless Devices").
Bandwidth may be another obstacle. "Getting a connection to make a voice call from the freeway during rush hour is hard enough, let alone having the capacity to access wireless information services," says Carl Zetie, a senior industry analyst at Giga Information Group.
Third-generation wireless systems promise to increase speeds to 2 Mbps and facilitate interoperability among devices and wireless services. But although a standard for these systems should exist by the middle of next year, the cost for major carriers to upgrade their national networks and systems could run into billions of dollars and require users to buy new phones that cost about $350, says Forrester's Zohar.
The capacity crunch is forcing carriers such as AT&T, which covers only three-quarters of the United States with its network and roaming agreements, to expand the reach of their wireless networks. AT&T last week disclosed plans to spend $3.5 billion to $4 billion next year to boost capacity and improve service quality.
To overcome the problem, IT managers have to focus on services and transaction capabilities that require minimal interaction and limited input. Web sites and the functions they provide need to be scaled down for wireless access because of the limited bandwidth and varying connection quality among service providers. BN.com's On The Go service has a limited number of functions, including search, purchase, locate a store, check order status, send an electronic greeting card, and help.
It's likely to be a while before wireless technology has a major impact on business, but some companies are preparing for the wireless world now. "I don't think in the short term it will be a high sales achiever," Barnesandnoble. com's Rosendorf says of On The Go. "But strategically, it was a very important position for us to take."
--With additional reporting by Beth Bacheldor, Chris Murphy, Paul McDougall, Aaron Ricadela, and Brian Riggs
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