Corporate Fortunes

Recent national jobs data and technology budgeting and spending patterns show that IT and telecom investment by corporate enterprises may be on the upswing.

The sound you hear right now might be the collective sigh of relief issuing forth from carriers and vendors in the wireless industry that have been doubling down since last year on the notion that their dreams of vast wireless enterprises and massive mobile work forces were ready to become reality.

Many of them made their original bets based not on any evidence of corporate IT spending in that area — in fact, the opposite has been true during the last few years, with corporate IT budgets getting slashed along with everything else. Instead, mobile operators, as well as systems integrators and vendors such as wireless LAN switch firms that market directly to enterprises, saw an educational opportunity they could mold into an economic opportunity. They could teach chief information officers at these enterprises about the efficiencies of wireless programs and then sell them on the cost-effectiveness.

Enterprise competition became more heated as the consumer wireless market got embroiled in wars over prices, minutes and roaming charges that damaged carriers' average revenue per user. Now, the wireless industry sees the apparent IT upswing as a boon because they think that the education period might be over, and the spending will improve dramatically. We can only hope.

“A healthier IT market is great news for everyone in the industry, and it would be difficult to say otherwise,” said David Rivas, chief technology officer and director of engineering at Sun Microsystems' Consumer and Mobile Systems Group.

However, as hard as it might be to say otherwise, carriers and vendors looking at an enterprise market that is growing stronger financially also will be looking at a different landscape than they have been studying the last few years. That in itself could have a negative impact on their efforts to win business.

During the last few years, wireless companies have been dealing with CIOs and enterprise IT managers who, for lack of a better phrase, were not carrying all their marbles around in the same bag. In fact, carrier executives repeatedly told Wireless Review during the last two years that down-sized staffs and constant cost pressures had rendered many CIOs “scatter-brained” and “looking at a good day as being a day when nothing at all changes.”

In a way, that chaos helped mobile carriers to better position themselves for bulk voice and messaging commitments, with the argument that they would help these CIOs alleviate the confusion and cost of dealing with multiple carriers.

But the enterprise market hasn't turned en masse to bulk ordering the way many carriers thought it would, and now, improving IT conditions could cause CIOs to reconsider changes they might have been about to make. They might, for example, remember that multiple carriers could be played against each other for a price advantage.

More IT spending and hiring also could mean the return of larger corporate IT staffs, and possibly the return of some in-house development and management that enterprise had been considering outsourcing.

Wireless carriers are getting steadily closer to realizing their dreams of garnering more revenue from the enterprise sector. The spending windfall they were waiting for may be arriving, but that doesn't mean they're guaranteed any of it. With new faces and better corporate budgets, enterprises might see the opportunity to reassess and reformulate their wireless plans.

In short, more corporate green might also mean more corporate red tape for carriers looking to get in the enterprise door.