Data's IP Future

IP on Everything" is not just a T-shirt slogan of information industry professionals. In the world of wireless data and mobile computing, the Internet protocol (IP) has become the de facto standard for the technology, software and hardware. Far from finding IP an impediment to growth, wireless data is adapting to the Internet and, as a result, beginning to thrive.

Matt Desch, Nortel Wireless Networks president, best described the relationship blossoming between wireless data and the Internet when he told the CDMA World Congress in June, "Subscribers are finding new ways to use the Internet to drive added value in their personal and professional lives. The only thing missing is making it available to them anytime, anywhere ... and the only solution that can make it happen is a wireless one."

Increasingly, wireless data has enjoyed success by demonstrating competitive advantage in a number of vertical markets. Now, wireless data is poised at the intersection of the two hottest markets in telecommunications: Dataquest reports that the markets for data networking and wireless equipment have grown 23% and 28% respectively in the last two years; wireline telecommunications equipment has grown only 8%.

There is a seeming inevitability to the nexus of wireless and data communications, as market participants are fond of pointing out:

* There are 50 million mobile professionals in the United States today.

* There are 70 million World Wide Web (WWW) users.

* There are 60 million wireless voice users.

* Nearly 40% of WWW users use cellular phones.

* 50% of wireline traffic is data, compared with 2% for mobile.

However, the wireless data embrace of IP was not necessarily ensured. Early wireless data protocols evolved from a radio communications perspective and were proprietary and closed. Modern wireless data systems, on the other hand, are evolving toward communications and computing paradigms such as the IP, and, consequently, these systems are IP-based, standards-driven and open.

Subscriber Equipment Indeed, Internet access already is a key component of wireless data services today. The emergence of some exciting new devices has made possible applications that were only dreamed about as recently as two years ago. And thanks to the arrival of browser-enabled smart phones and open wireless Internet specifications, such as the wireless application protocol, carriers can offer subscribers a new class of services that provide complete communications solutions.

These days, subscribers can have voice service, data, e-mail, Internet and intranet access delivered literally to the palms of their hands. The industry is moving quickly beyond strictly vertical market applications toward offerings that have broad horizontal appeal. These are the first steps of wireless data services toward the mass market.

The arrival of the first generation of Windows CE devices and portable PCs also will have a sizable effect on the wireless data market. There is a class of customer that wants portability but needs access to more than just concise bits of information delivered by a smart phone. These users are increasingly dependent on Internet- and intranet-based information.

In the past year, Microsoft has made a substantial commitment to that segment of the wireless data and mobile computing marketplace. Its membership in the Wireless Data Forum (WDF) shows Microsoft's determination to develop a wide range of mobile computing products, lending, if nothing else, self-fulfilling credence to Bill Gates' prediction that consumer devices that can access the Internet will become more commonplace than PCs.

This fall at the WDF-sponsored exhibition and conference Wireless I.T. '98, as well as other venues, Microsoft was to unveil a parade of products that demonstrate the broad range of demand it believes will exist for wireless-capable Internet devices.

Software, too, has come a long way in a short time. Gone are the days of long development times for customized applications. Many businesses are up and running with off-the-shelf applications that require little, if any, customization.

Customer implementation times have been slashed in other ways as well. Now, applications can be placed on company intranets or the Internet and accessed that way. Companies don't have to load software on each device to give mobile workers specific functionality. JAVA and browser technology will accelerate the movement toward the simple wireless device.

As a result, many carriers are putting together innovative services to enter that emerging market, with the goal of simplifying Internet access, simplifying the cost structure (all-you-can-eat pricing) and reducing overall costs (by taking advantage of open Internet specs).

"Wireless carriers will offer mobile customers access to a full range of Internet-accessible information," said David Sutcliffe, Sierra Wireless president. "Some carriers will go further, offering value-added network services, generating additional revenues and margins. Carriers who win significant wireless data market shares will enjoy a customer base with lower churn rates and better credit ratings."

Obstacles Despite the seeming inevitability of strong demand for wireless data products and services, carriers face a number of hurdles if they are to meet market expectations:

* Training and equipping distribution channels to handle wireless data activations

* Providing effective after-sales support of general and specific implementation issues and keeping users abreast of developments in areas of concern

* Bundling with equipment and software vendors to provide complete solutions

* Working with the Internet community to promote bandwidth-sensitive web sites

* Working with the IT world so that corporate information is accessible yet secure.

Carriers also must manage user expectations. Surveys show that subscribers who expect to migrate to wireless data through circuit-switched cellular often expect billing to be volume-dependent rather than time-dependent. In the area of mobile multimedia, carriers must avoid premature promises.

Managing expectations cannot be used as an excuse to keep from meeting critical needs, however. Wireless data products and services must offer a high degree of integration with the desktop, a minimum of complexity in the interface and a range of product forms.

The largest hurdle that the industry faces today, however, is wireless data marketing and sales. First, according to a recent study by the Yankee Group, the time has come to abandon the search for the killer app: "There is no one killer application, " according to the study. "For every user, wireless mobile data is a different experience that fits into their daily work and/or personal life. A variety of compelling applications is emerging for different user groups. For the individual investor, it is a real-time stock quote and trading capability; for the field technician, it is access to repair information and parts inventory; for the salesperson, it is electronic delivery of information for smarter selling."

Next, the marketing focus should shift away from a technology-based approach toward an applications-based approach. Customers buy solutions, not technology.

"Our problem, as an industry, is that we're so focused on the technology -- debating standards, improving speeds and developing devices -- that we lose sight of the customer," said Dick Lynch, Bell Atlantic Mobile executive vice president & CTO. "Customers have not been asking for exotic new features for their different wireless devices. In fact, they're still trying to figure out how the ones they have today will benefit them."

WDF intends to play a seminal role in getting out the word on wireless data with a joint promotional campaign, the Competitive Edge Series, that will raise end-user awareness of the capabilities of wireless data products and services.

Today, the wireless data and mobile computing community is making steady progress toward providing simple-to-offer, simple-to-buy and simple-to-use wireless Internet access. That, combined with the fact that information content available via the Internet and corporate intranets is rapidly becoming more useful and valuable, brings the industry closer to a service that will have broad horizontal appeal. As we move forward and get better at providing that service, wireless access will become less of an issue, and e-care and e-commerce will emerge as the next major growth areas.