When Worlds Collide

Wireless data enterprise in the licensed market is progressing at a snail's pace. Although the industry finally is putting some real effort into data, carriers' plates are crowded with voice alternatives, and 3G's promise for advanced data speeds has yet to be resolved.

Meanwhile, for an industry that remains about as unified as a basket of mismatched socks, the unlicensed market for data enterprise solutions is advancing at a rapid clip. According to Frost & Sullivan, wireless LAN (WLAN) market revenues reached $305.4 million in 1998 and should grow to more than $1.63 billion by 2005. Interoperable products that comply with the IEEE 802.11 standard are available from most major manufacturers, though competing proprietary systems still make the WLAN business a bit dicey.

Although unlicensed bands are generally low frequency, companies operating networks in this realm are benefiting from sliding prices and new technologies, some of which enable throughputs up to 10Mb/s. Despite the swelling chorus that the 2.4GHz operating frequency band is "junked up" with incompatible offerings ranging from microwave ovens to baby monitors, it still is the choice of most WLAN manufacturers and is the home of 802.11 as it exists today.

Legacy manufacturers and a crowd of smaller companies paraded a host of next-generation 2.4GHz WLAN products at CeBit in March. In addition to the 2.4GHz band, unlicensed 5GHz spectrum (5.1GHz to 5.25GHz, 5.25GHz to 5.35GHz and 5.725GHz to 5.825GHz) is poised for growth. Currently, only a few companies such as RadioLAN are offering services at 5GHz-plus, but NEC, for one, is developing a wireless networking system that will operate in that spectrum and will be deployable in both short-range and relatively broad outdoor settings.

Although their service offerings are diverse, most WLAN providers and equipment manufacturers share the common desire to translate vertical-market success in the healthcare, warehouse, education and retail markets to the budding small office/home office (SOHO) market. Some are having greater success than others are.

"The big push is to try to create a market in small office/home office for WLANs," said Ira Brodsky, Datacomm Research president. "We are starting to see homes with more than one PC and starting to see even the smallest businesses have a PC. In those environments, getting a wired system is more of a problem partly because people don't want to run new wiring into their homes, and they tend to move more often and don't want to invest a lot of money in their systems."

Speed is another critical factor in attracting both small and large businesses to the wireless world. End users want speed at least equivalent to wired Internet.

"This is starting to become more of a reality in products from Aeronet, Lucent's WaveLAN division (and) Intalk," said Greg Naderi, Frost & Sullivan IT analyst. "These companies are moving forward and breaking that barrier."

Whether or not small- to mid-size businesses will be an easy sell, they certainly have a lot more options than ever before. The 802.11 standard, 7-plus years in the making, is finally out of the gate with a networking solution that closely mimics a standard Ethernet.

NOT QUITE PERFECTIONBut all is not perfect in the WLAN market. For example, there is a handful of proprietary systems that may or may not be compatible.

"All the leaders in the marketplace are scrambling to provide the best system. The standard can't keep up," said Naderi, who notes some in the industry believe 802.11's time has passed. "Not everyone has adopted this standard. There are some vendors who simply feel that it is a standard based on archaic architecture."

This could add up to lot of crossed virtual wires. Even the most enthusiastic WLAN proponents admit interoperability issues still hang heavy over the prospect of broad adoption.

"The ducks are finally coming in a row, but the issue of interoperability still needs to be addressed," Naderi said. "Having a unified standard committee working to come up with a specification is important, but there's a lot of confusion. There are lots of competing specs coming out."

According to Mark Bosse, RadioLAN vice president of marketing, one of the first questions customers in the enterprise market ask is, "Are you complying with 802.11?"

For RadioLAN, the answer is, "No, we do a 5GHz solution." Although that's not necessarily what customers want to hear, they usually like the speed capabilities. RadioLAN is trying to convince potential customers they shouldn't get bogged down in standards issues.

"By the time we get finished talking about the first half-dozen going on out there, customers are still scratching their heads," he said.

"The point is, there are a number of very good standards, but they are all on the wired side. We tell them, 'If you are compatible with standards on the wired side, you should have some degree of comfort and risk protection.' That seems to work."

RadioLAN recently introduced Wireless Mobilink, an extended PC card with attached radio transceiver unit. RadioLAN's 3-pronged business model is representative of where the unlicensed data enterprise market is moving.

Its first target is the enterprise mobility market, large organizations that have invested in laptops to provide mobility for their staffs. Next is the small office that is starting up or moving to a location where a wired network is not already in place. It also will continue to develop and serve its core vertical markets.

Of the three segments, the enterprise market is the easiest sell.

"They are already spending more money on laptops than desktop computers, and they've already made the decision that mobility is important to them," Bosse said.

He said companies tend to introduce a WLAN in one work group -- finance, engineering, sales -- then add on from there. The small office, on the other hand, is a tougher sell.

"This is very much an evangelistic marketplace," Bosse said. "We are often talking about organizations that don't even know wireless is available."

WHERE DO YOU STAND?So how does all of this activity affect you? For the time being, it doesn't have a direct influence on cellular and PCS carriers. Although a few unlicensed companies offer, or are developing, Internet access via a WLAN, these services are limited geographically. The WLAN scenario generally focuses on communications among devices within or between buildings, while the licensed venue extends the capability to check office e-mail on a laptop.

BLUETOOTH OPPORTUNITIESMany of the same eyes watching the WLAN market are turning to Bluetooth, which will complement PCS and cellular networks.

"The idea is to leverage this huge infrastructure with tremendous capacity and coverage, and capitalize on what's been going on with data," said Datacomm's Brodsky.

The Bluetooth Special Interest Group now counts 600 companies and will release its 1.0 specification this summer. The protocol is designed to take advantage of short-range communications between devices at a highly attractive price point -- less than $10 per end user.

"We will continue to evolve the document," said Skip Bryan, Ericsson mobile phones and terminals division director of technology marketing. "Whether or not an industry standard like 802.11 would spawn out of Bluetooth, I'm not sure."

Bryan said Bluetooth's founders -- Ericsson, IBM, Intel, Nokia and Toshiba -- will have products out by early 2000. Although vendors have not announced specific products, Ericsson showcased a Bluetooth-compliant PC card and accessory plug, and a wireless headset at CeBit.

By providing the ability for a portable phone to "talk" to a laptop, the industry is expecting Bluetooth will make an excellent ally for licensed carriers. However, Bryan said there still is some work to be done on both sides. Both unlicensed and licensed providers are trying to understand what degree of interference there is and how to proceed further.

Despite the uncertainties, carriers are excited about the prospect of Bluetooth products as enablers to their own offerings.

"The prospect of getting rid of all the cables and wires to connect devices to communicate is an exciting one," said Bill Davidson, Bell Atlantic Mobile (BAM) vice president of sales & marketing for wireless data. "When a CDMA phone has the Bluetooth ability to talk to a laptop, I think it will provide some neat options in terms of notification. We are really looking at the goal of Internet and intranet access, and wireless e-mail is a main driver now. Next year there will be 2.8 billion e-mails sent every day. Right now people are constrained where they can send and receive e-mail, but the end user is going to demand wireless."

BAM's AirBridge family of wireless data services has been the company's fastest-growing area since it was introduced 18 months ago. Davidson said BAM has not seen much growth in the SOHO market but expects that segment will open up as 3G CDMA data speeds increase.

Although 3G data capabilities and Bluetooth products are blue sky today, when they do become realities within the next few years, the worlds of cellular, PCS and WLAN providers are destined to collide somewhere in the home and small office.

"There's going to be some overlap, absolutely," said John Grotland, Omnipoint spokesman. Omnipoint already goes after both big and small businesses, and Grotland said Bluetooth products could offer a competitive advantage in the SOHO market. He added that the idea of getting information wirelessly is opening a lot of opportunities, especially for small businesses.

Although Grotland believes the unlicensed and licensed arenas will be mainly complementary solutions, he noted some competition could surface within big corporation sectors.

"You have your big business needs with bigger economies of scale," he said. "But as you break down into smaller units, some of which will need to be more mobile, they will have more need for wireless solutions."

Most industry pundits believe the instance for overlap will remain small, contained to Internet access to the home or small office via a wireless medium, for the foreseeable future.

"The issue of 802.11 has 0% relevance in the outdoor market. It is entirely an indoor issue," Frost & Sullivan's Naderi said. "There is no vendor doing outdoor wireless boxes that is going to incorporate any 802.11 function. Some people say the success of the indoor market relates to the outdoor wireless network, but I can't buy into that. There are different purchasing criteria, buying cycles, requirements. They are completely different animals."