Think Big

Mar 1, 2001 12:00 PM, Chris Goldman, Data Editor

Gazing into a crystal ball might be the only way to measure wireless data's potential in the enterprise segment. With carriers only nibbling on business solutions, industry insiders hesitate to lay their estimates on the line.

One research firm estimates that sales of W-Internet apps will reach $37 billion by 2002. Another states that 50% of Fortune 1,000 companies will commit 15% of all networking service spending to wireless solutions.

If those estimates are even close, the market for wirelessly extending legacy IT systems to mobile workers is going to be huge.

Take BMW (www.bmw.com), for example. The international auto company employs 118,000 people; 1999 revenue was E-32 billion (euros). And it's starting to use wireless data from top to bottom.

Last fall, BMW installed the LPG WAPoffice app from LPG Innovations, a Finnish wireless software company (www.lpginnovations.com). Currently, about 250 employees at BMW's Munich offices use WAP phones to access basic office apps like e-mail, calendar and phone directories.

“We had several requirements in BMW from traveling business people who wanted easy and inexpensive access to BMW internal information,” says Rudolf Rauber, BMW office workgroups and computing manager. “But we had only complicated solutions that needed a laptop and dialup connection.”

In addition to e-mail and directory information, BMW wanted to link plant managers to production data.

Don Trammell, LPG Innovations' European business development manager, says WAPoffice runs over a variety of networks, and provides connectivity to the many legacy apps BMW currently uses.

“Our products are future-proof, and can work with any platform: GPRS, UMTS or GSM. It doesn't care about the transport medium,” Trammell says. “As long as you open an IP session, it works. And that's what BMW wanted. They wanted this to connect to their backend systems. They're using HP Mail, cc:Mail, Lotus Notes and Microsoft Exchange. We provided them the connectivity software to tie all of that together so they have one platform.”

Although BMW has only deployed LPG WAPoffice in its Munich offices, the eventual plan is to extend it to the entire organization worldwide.

“The deciding factor for BMW was that they wanted an open system so they didn't have to upgrade every five minutes,” Trammell says.

The app operates independently of the carrier network, but most employees use Vodafone to access it through BMW's WAP gateway. Rauber says the gateway also provides BMW customers with wireless access to financing information. And journalists can get information about BMW through a wireless public relations portal.

Other uses of wireless technology can be found throughout the organization. In 1998, BMW began using Symbol's (www.symbol.com) wireless bar-code scanners to track airbag components during assembly at its plant in Dingolfing, Germany. In January, BMW and Sprint PCS (www.sprintpcs.com) announced a deal to deliver digital wireless voice and data solutions to customers who buy 2001 model year BMWs. And although it may be years away, the car company is working to integrate Bluetooth technology into its next generation of automobiles.

A recent survey from the Yankee Group (www.yankeegroup.com) found that larger companies have a higher percentage of mobile workers. Even though deploying wireless data apps for large enterprise customers represents a tiny percentage of most carriers' business at the moment, the BMW example reveals a sleeping giant.

Large companies are looking to wireless data to improve employee performance, increase competitive advantage and reduce costs, according to the Yankee Group survey.

Warren Wilson, Summit Strategies (www.summitstrat.com) senior analyst, says that overall, few carriers are doing a good job of capitalizing on the market for enterprise wireless data apps and services.

“Out of the overall market for wireless, wireless data accounts for only 2% of all traffic,” Wilson says. “That in part reflects the fact that it's so new. In part, it reflects that the telcos are coming to this from a heritage of almost a century of providing plain, vanilla voice service. They don't have a history of reaching out to customers to offer tailored, value-added services that meet their customers' business needs.

“It's one thing to say I can hook up 100 phone lines for X dollars a month and here's our menu of features like call waiting and call forwarding,” he says. “But if you are instead moving into wireless messaging and sales-force automation, that's a much more complicated challenge. The telcos are having to learn a new set of skills to do this effectively.”

Yankee Group wireless analyst Knox Bricken says AT&T Wireless (www.attwireless.com) and Nextel (www.nextel.com) have been historically aggressive at serving business customers. But with recent partnership deals and the addition of 1 million wireless data users, Sprint PCS seems poised to gain market share from its competitors.

“Sprint was traditionally very consumer-focused, but seems to be signaling a desire to enter the enterprise market,” Briken says. “Sprint's agreement with Palm is one of the signals we see there. And they are the most aggressive in the wireless data arena in general.”

Jason Guesman, Sprint PCS director of emerging products and services, says the carrier sees “gigantic opportunity in the business side.”

After assembling a nationwide digital voice and data network, along with browser-enabled devices, Sprint PCS began to focus on apps.

“That is where the real value is delivered,” Guesman says. “We spent about three months going around talking to consultants, customers, equipment vendors, everybody — looking for the killer wireless data application in business. The answer we got back sort of surprised us, but it should have been obvious.

“It wasn't about new killer apps. The company already had the killer app. It was the stuff they were already doing. The real value was in extending those applications.”

Guesman says that companies with millions invested in legacy systems such as CRM and SFA software for desktop use were seeking ways to mobilize those apps.

“Extending corporate applications kind of became a mantra around here,” he says. “Companies can spend a relatively small amount of money with a device that most people are already carrying today for voice and tap into those rich reservoirs of information.”

But according to the Yankee Group's recent survey of more than 100 companies regarding wireless data services, there are still significant barriers to adoption, many of which can be eliminated by carriers.

Inadequate coverage topped the list of barriers, followed by standards, reliability, cost, maturity of technology, security, app development, device limitations, lack of internal expertise, network speed and a need to re-engineer the network.

Despite these barriers, carriers are working with businesses to implement targeted wireless data solutions.

Guesman says Sprint PCS and its technology partners are aggressively marketing wireless e-mail solutions for both Microsoft Exchange and Lotus Notes users. The offering has generated a lot of interest among enterprise customers, but no deals have been announced. The revenue from enterprise wireless data deals is small today, Guesman says. “But this is just chapter one.”

Roberta Wiggins, Yankee Group director of wireless mobile communications, advises carriers to seek access to apps through targeted partnerships, thus allowing them to focus on improving their main asset, the network.

“The carriers have traditionally been voice carriers and not data. So this is a new environment for them,” Wiggins says. “And they don't have great expertise in implementing data solutions. So they really do need partners. They need to work with the best application developers — W-ASPs and middleware companies that deal with optimizing wireless for business usage and delivering links to legacy applications.”