More heat for Hot Zones

If you're anticipating the day when Wi-Fi technology will be absolutely everywhere, you're going to be waiting an awfully long time. The ambitious ideas that some in the Wi-Fi community had about hot spots being deployed to the point of saturation have given way to the more reasonable — but no less promising — concept of mixed-use Wi-Fi hot zones supporting services that increase their overall value.

Hot zones are about getting communities as a whole to buy into the benefits of Wi-Fi access. Mixed use is about applying Wi-Fi hot spot coverage to the productivity needs of a hot spot owner, as well as revenue creation for the owner and other businesses in the neighboring community. The most recent example of this idea came in the form of news several weeks ago that Philadelphia was considering deploying a massive Wi-Fi network to serve its citizens as well as municipal government needs.

The potential for that kind of location-based, value-added service has been around since public Wi-Fi hot spots started going up in coffeehouses and copy shops. But it lacked for confidence until communities nationwide started backing the hot zone concept.

The idea of value-added service for Wi-Fi also was stalled for fear that hot spots wouldn't be able to handle the ensuing complexity — that it could give hot spot owners more of a burden than they bargained for. The mixed-use hot zone model requires that Wi-Fi hot spots gain some measurable degree of service quality, reliability and capability to support complex transactions. In short, it means hot spots need to get a brain.

Pronto Networks, a Pleasanton, Calif., vendor of Wi-Fi access points and operations support system (OSS) software, has been waiting for the Wi-Fi industry to recognize that for more than two years. Jasbir Singh, president and CEO of Pronto Networks, sees the need for OSS functions in Wi-Fi hot spots beginning to gel, particularly in the hot spots hosted by the retail industry and its own network of suppliers, supporters and patrons.

“For the last six months, we've seen a lot of interest from large retail organizations,” Singh said. “The vision of how Wi-Fi gets delivered and what's driving it has changed, but we are more bullish now about it than we were before. All retail locations will become Wi-Fi hot spots, but it will be driven in large part by the productivity needs of those companies.”

The discontinued vision of which Singh spoke is that of “Wi-Fi everywhere.” Some companies built on that idea, such as Cometa Networks, have perished, while surviving firms have adjusted to a new — and more realistic — vision.

“The value of a Wi-Fi hot spot is really fundamentally about access,” said Richard Dean, program director of wireless infrastructure and application services at IDC. “But hot spots also are being leveraged to drive traffic for the hot spot owners, as well as businesses near the hot spot.”

For example, Dean said, a restaurant located in a particular Wi-Fi zone could push coupons or advertisements to users in that zone through the hot spot splash page.

The new vision starts where the old one left off, with deployment of lots of hot spots but perhaps more consideration about where and why they are going. For example, the idea of putting Wi-Fi in a national chain of video stores — an idea fostered by Cometa — sounds enticing because of the possibilities for scale and brand affiliation. Yet, by nature, most video store patrons aren't going to linger long enough among the blaring movie trailers to feel the need to check their e-mail. But a smaller and lesser-known chain of auto repair shops — another venue pursued but arguably not exploited by Cometa — offers the prospect of patrons who are captive to oil changes or engine repairs and might want to stay connected.

“‘Wi-Fi everywhere’ has proven to be hype,” said Dean. “What's left now is a real need for hot spots to be in specific places.”

Suppliers in the Wi-Fi hot spot food chain, such as Pronto, still want to see such venues exploited to as large a scale as possible. Though an OSS company in spirit, Pronto is still fundamentally a builder of hot spot networks.

“At a basic level, we are capable of deploying a large network,” Singh said. “At an operational level, we can provide a monitoring aspect, and we can help offer location-based content. This is what you see on the splash page, as well as advertisements, the ability to offer ads based on location.”

The management and monitoring aspect is leveraged on an attitude of flexibility. Pronto's Hotspot OSS solution can manage large networks of access points from several different vendors. “The ability to manage multiple access point vendors is good because most networks don't depend on one vendor anymore,” Singh said. “Mix-and-match networks happen all the time.”

That attitude also extends to third-party billing, customer care and content management systems. The recently announced version 3.0 of Pronto's software offers application programming interfaces for integration with such systems. The same software release also directly addresses the mixed-usage trend by supporting multiple SSIDs and virtual LANs so that operators of Wi-Fi hot zones can separate public and private use and customize splash pages for different groups of users.

“In complex environments, there are so many billing and accounting systems in place that sometimes a lot of integration is required,” Singh said. “We have to connect with other systems.”

“The need for a robust OSS platform is now becoming a factor for operators of large Wi-Fi hot spot networks,” said IDC's Dean. “Metering usage is a challenge. You're getting into a different operational area than Wi-Fi has been in before.”

One environment posing such complexity is that of Ecast, a Pronto customer that is installing Wi-Fi-enabled jukeboxes in bars and restaurants wanting to provide public Internet access to their patrons. The jukeboxes also are fitted with a broadband wireline backhaul connection that allows these patrons to download music to be played on the jukeboxes directly from Internet-based content libraries. Ecast has installed the jukeboxes at about 3000 watering holes nationwide, so it certainly qualifies as a very large distributed operator. But, it also has to pay licensing fees to a variety of content owners based on the music that patrons download to the jukeboxes, and it needs to support different kinds of user fees and roaming transactions.

“Pronto is really the front-end piece of that process for us,” said Robbie Vann-Adibé, CEO of Ecast.

The Los Angeles company's business model also is illustrative of the new reality of Wi-Fi being successful in a mixed-usage, value-added, location-based service environment.

“There had been a question a few years ago of whether anyone would want to use Wi-Fi in a bar, but it's clear now that once patrons start finding out about it, they start showing up with their laptops,” Vann-Adibé said. Ecast recently commissioned a survey that found that 67% of bar patrons might make a decision about where to go based on whether or not Wi-Fi was available.

However, there still isn't much consistency in the market about how Wi-Fi access and related value-added services are promoted by such venues. “It runs across the board,” Vann-Adibé said. “Some bars market it prominently, and the staff is enthusiastic about it, and others don't.”

That inconsistency, along with the aforementioned need for service quality, reliability and transaction capability, is part of what makes traditional telecom operators still a little skittish about operating large-scale networks of Wi-Fi hot spots. Telecom service providers still participate in the Wi-Fi industry in large part through resale partnerships and roaming agreements that mitigate their potential risk.

However, Dean said that eventually, the still-maturing Wi-Fi business could shake out to be a market ruled by just a few large operators — and he believes that large service providers could be among a handful of companies capable of consolidating the business.

“There will be thousands of hot spots out there, but there will probably be just a few small providers and owners,” Dean said. “A lot of the organizations out there now could be acquired by an SBC or a Wayport, for example.”

As that consolidation happens, it could play directly into Pronto's desire to serve large-scale Wi-Fi networks. But, assuming traditional telecom operators are part of the consolidation, Pronto also could benefit by having a focus on the operational functions that are most important to carriers.

In supplying OSS functions for Wi-Fi hot spots, Pronto is doing something that anyone who has worked at a telecom network operations center (NOC) probably could appreciate.

“In regard to a NOC, it's about ensuring quality, and that's what we're about,” Pronto's Singh said. “We have appeal for large telcos because they won't offer Wi-Fi unless they can ensure quality somehow.”

Dean concurred. “Telecom companies could apply the idea of a NOC to the Wi-Fi business, and if that happens, it could play to Pronto's strength,” he said.

As telecom companies become more involved in the Wi-Fi business, it also could allow Singh to leverage more of his long and varied career. Pronto already is something of a crossroads at which different parts of that career are meeting.

Almost 20 years ago, Singh was an SS7 and ISDN engineering manager in India, where he helped design an SS7 subsystem that now accounts for almost 40% of the voice calling capacity in that country. Later, he founded and served as chief technical officer at Yack, an Internet content company.

“Pronto is the intersection between my telecom background and the Internet company I founded,” Singh said. “That telecom background is a plus because I understand that you cannot build carrier-grade systems overnight.”

Though Pronto Networks seems quite well-equipped for the next phase of the Wi-Fi business, it is not the only company that might be so prepared — and there could be significant additional challenges that lie ahead. Singh is fond of saying how Pronto created a category for itself, though companies such as Tatara Systems and Service Factory perform at least some of the same service delivery functions that Pronto supports.

However, an even more direct competitive challenge could be lying in wait, as telecom service providers and other large companies look to consolidate the Wi-Fi business into a few large networks, as Dean suggested.

“Will the telecom guys want to build Wi-Fi OSSs internally or will they say it's easier to buy those functions from somebody like Pronto?” Dean said. Many current Wi-Fi operators might not have the skill or experience that gives them much choice in the matter, but telecom carriers have both. They also have a history of investing in their own OSS developments as they get started in new markets, though often with mixed results.

Singh acknowledged that fact. “Sometimes they do build their own solutions, and ‘Build Your Own’ could prove to be our main competition,” he said. “We have to convince them that it is better to go with us.”