InformationWeek: The Business Value of Technology

January 15, 2001

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Doing Business Without Wires: Bluetooth and 802.11b

Bluetooth and the 802.11b standard promise lower-cost, faster access

By Matthew G. Nelson

More on wireless networking:

Network Computing: Mobile & Wireless Technology (12/12/00) EETimes: Motorola's V.92 card takes Bluetooth on new path (11/20/00) EETimes: Bluetooth will succeed . . . but not overnight (11/6/00)

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hanks to two up-and-coming networking standards, Bluetooth and 802.11b, short-range and local area wireless networks are sprouting up in all sorts of places, from coffee shops to hospitals. They promise to give the growing throng of handheld, cell phone, and notebook PC users low-cost, high-speed wireless access to the Internet and corporate networks.

Until now, most IT departments have passed on wireless LAN and other short-range networking technologies because they've been too slow and cumbersome. But the faster broadband products now hitting the streets, coupled with lower prices, are breathing life into the wireless LAN market.

New York's Holiday Inn Wall Street is about to begin offering guests access to a wireless network based on Bluetooth so guests can check into the hotel, unlock their rooms, and pay for meals using cell phones or personal digital assistants. "We're doing it for the whizbang," says Frank Nicholas, area director for the hotel, "but we're also trying to make our guests as comfortable as possible."

This week, St. Bernard Hospital and Health Center in Chicago and Miller-Dwan Medical Center in Duluth, Minn., will switch on 802.11b LANs in emergency rooms, making it possible for administrators, doctors, and nurses to collect patient information using notebook computers, then transmit the data to patient-management systems.

Starbucks Corp. said earlier this month that it will build 802.11b networks in 3,000 of its coffeehouses so customers can sip their lattes while they browse the Net using their own wireless notebooks, smart phones, or Pocket PC PDAs. "These networks may make IT managers change the way they think about what they arm their mobile employees with to make them more productive," says Darren Huston, senior VP of new ventures for Starbucks, in Seattle.

He may be right. Mercedes-Benz is testing 802.11b networks in 30 of its U.S. dealerships so employees can wirelessly access inventory and service applications. The automaker is also outfitting mechanics with wireless devices so they can check repair histories and order parts as they service cars without leaving the garage. And United Parcel Service Inc. is testing both 802.11b and Bluetooth in its distribution centers and warehouses.

The 802.11b standard provides transmission rates of up to 11 Mbps at distances of about 100 meters. Completed a little more than a year ago, 802.11b is a vast improvement over the sluggish rates of earlier wireless LANs that moved data at about 1 Mbps to 2 Mbps. Prices are also improving: 802.11b network interface cards will be available for less than $100 sometime this year, according to Phil Belanger, chairman of the Wireless Ethernet Compatibility Alliance.

Bluetooth provides 1-Mbps performance over distances of about 10 meters and is designed to connect multiple intelligent devices, such as cell phones, PDAs, and appliances. Analysts predict that a single Bluetooth chip could cost as little as $5.

Cahners In-Stat Group expects worldwide revenue from 802.11b equipment to exceed $1 billion this year and surpass $2 billion by 2004. The Bluetooth market is expected to hit $5 billion by 2005.

No wonder big-name vendors are incorporating the standards. This week, Texas Instruments Inc. will unveil an advanced 802.11b chipset that doubles the transmission rate from 11 Mbps to 22 Mbps. Alcatel, Intel, Lucent Technologies, and others are expected to ship large quantities of Bluetooth chips this year; most PC makers will offer notebooks equipped with 802.11b antennas and drivers. And Microsoft, which has installed an 802.11b network throughout its Redmond, Wash., campus and at more than 65 locations in the Seattle area, is working on adding support for both 802.11b and Bluetooth in Windows 2000, as well as the forthcoming Whistler operating system.

But Bluetooth and 802.11b face hurdles. Both standards operate on the 2.4-GHz band, and the signals can bump into each other, muddying performance. An FCC group is working on a system to avoid such problems.

Security is another issue, one that Cisco Systems, Microsoft, and others are addressing by developing encryption and other measures designed to protect data as it crosses a wireless LAN. And 802.11b products could even become obsolete when 5-GHz systems capable of supporting multimedia applications become available in a few years.

Still, users such as Jim Kirby, a senior network engineer and architect for Wells Dairy in Le Mars, Iowa, aren't concerned. The ice-cream maker uses Cisco's Aironet system for 802.11b in office cubicles to avoid the hassles of staff moves. "We're a growing company, and people move between departments quite often," Kirby says. He acknowledges that it costs a little more to in-stall a wireless network but says it's worth the money. At this point, Kirby says, Wells Dairy users wouldn't let him pry mobile devices "from their cold, dead hands."

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