5 min read

All Eyes On Cell Phones

SMS messaging is popular overseas. Will it become an important communication tool for U.S. businesses?
SMS text messaging also can save lives. In California, a program called Emergency Digital Information Service uses SMS to keep citizens prepared for emergencies. A handful of agencies across the state have access to a pipeline developed by the governor's Office of Emergency Services and can send messages to the public whenever it's necessary. Citizens can subscribe to whatever alerts they want to receive--earthquake advisories, blackout alerts, information on kidnapped children, among others--and get the critical information on the situation.

Some businesses are finding uses for SMS beyond connecting people. In some cases, it can be a cheap and effective way to connect machines. IBM is licensing a technology that could mean new freedom for athletes with a history of health problems. A heart-rate monitor is strapped on an athlete's arm, and using a Bluetooth wireless connection, it stays in contact with the wearer's cell phone. If the athlete's heart starts to beat too fast, the monitor sends a message to doctors and family.

Drivers without change can use SMS to pay Reino's parking meters.

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In a less-crucial use, Reino Parking Systems Inc. makes an SMS-powered parking meter. Every Reino MultiBay meter is equipped with a cellular modem that keeps it in touch with the home office. If people park and don't have change, they can call Reino's toll-free number, punch in their credit-card information, and buy time; the system sends an SMS message to the meter telling it how much time has been added. It also sends a warning to users before time runs out, so they can put more money in the meter.

That simple functionality can help cash-strapped cities, says Reino president Patrick Ryan. "Typically, parking meters have been paid with coins," he says. "But in the U.S., you're limited by the fact that the biggest commonly used coin is the quarter. If you want to charge $4 an hour, you're going to need 16 coins, and that's not easy to do."

The MultiBay meters are already in use in cities around the world; Reino just finished its first U.S. trial program in Washington, D.C., and the meters are being installed in San Francisco. They're likely to pop up in a number of other cities within the next year.

Before this fairly new technology becomes a mainstream business-communication tool, it needs to overcome some problems. In tests last year, Web-performance-monitoring firm Keynote Systems Inc. found that 7.5% of text messages sent in the United States weren't received within two minutes and arrived either late or not at all. Delivery failures were higher when messages were sent between different carriers' networks. Vendors hope error rates will fall as network-to-network capabilities are improved.

But such a high loss rate could be a deal breaker for many businesses. "If people are using [SMS] for urgent communications, there are some quality-of-service issues that need to be addressed," says Yankee's Barrabee. "For use in the enterprise, you may want to get confirmation that a message was received."

Another issue is that most businesses don't buy cell phones and voice service for individuals at a business level, so it's unclear how employees would be reimbursed. When the Yankee Group surveyed business-technology managers about their wireless plans, "E-mail access still reigns supreme and remains the key application driver for wireless," Barrabee says. "SMS is largely a consumer application."

Some businesses are waiting for higher-quality SMS. Patrick Wise looked at SMS two years ago when he was forced to find a replacement for pagers. As the VP of advanced technology for Landstar Systems Inc., the shipping and logistics company, he's responsible for the technology that gets information to drivers and lets them know when and where to pick up their next load.

Landstar used to subscribe to a two-way pager network that operated on the FM band. It covered 95% of the geography the company needed and let drivers confirm that they were going to make a pickup. But the provider went bankrupt--victim of pagers' declining market share and increasing FM access costs--and Landstar needed a replacement fast. "The collapse of the pager industry forced us to do something," Wise says. "That was a core part of our business process."

Wise looked at SMS but decided it wasn't a viable option because the technology wasn't widely deployed. And since it didn't allow messages to queue up when a driver was out of the network coverage area, messages could get lost.

Still, Wise hasn't written off the technology; he figures it will be viable in three to five years. What's needed is expansion of high-speed cellular networks and greater adoption by Landstar's drivers. That will happen as more of them trade in their older-model phones for ones capable of SMS. "Our tack will be to avail ourselves of the available technology and let our users select," he says.

Business adoption of SMS in the United States may take time, but it seems clear that it will become one of the many communications tools businesses will use to keep information flowing. "There are real opportunities to use SMS within an enterprise," says analyst Barrabee. "It's a very inexpensive option; it's ubiquitous; it's on the phone; it's in with your address book. It's an underutilized, undertapped opportunity."