The Survivor's Guide to 2004: Mobile and Wireless

Like many emerging enterprise-technology markets, wireless carries risks. The need for heightened security is a big issue. ROI is far from a given. And standards are still in flux, making it tempting to wait just a little longer. But there's a certain sense of excitement and inevitability about wireless. You know that the coming year's products and services will be better than the last. You just wonder whether they're good enough to commit to strategically.

It's the Apps

In most scenarios, applications drive productivity, and most people use wireless networks to run the same applications--Web access and e-mail--that they run on wired networks. Wireless access makes the work more convenient, and it mirrors the nomadic behavior of many users, whose work patterns are anything but at your desk, 9 to 5.Most enterprises now have flexible structured wiring systems to support every flavor of Ethernet. But with wireless, there's more of a need to focus on physical-layer issues. This is understandable, since delivering data reliably over the airwaves requires substantial investment in radio infrastructure. The inherent limitations of this evolving infrastructure force us to re-examine how applications interact. For example, the likelihood that devices may not have constant connections may lead you to consider sync-based rather than thin-client application architectures.

While simply liberating users from a rat's nest of wires has broad appeal, the true strategic value of wireless is best measured by the degree to which new mobility-oriented applications can transform business processes. Not surprisingly, wireless sales are strongest in vertical markets like logistics, distribution, retail, health care and education, where mobilized applications can eliminate obstacles to productivity.

As we peer into 2004, is there a compelling new horizontal-mobility application that cuts across every enterprise? The best bet might be interactive messaging, which has already paid handsome productivity dividends for geographically dispersed workgroups. As any instant-messaging veteran will tell you, the technology is a positive complement to telephony and e-mail, so it's logical that it will go wireless.Wireless's cable-replacement benefits cannot be overlooked. The most obvious place for this technology is in the home, where millions of people have installed inexpensive wireless routers that let multiple home computers share a single DSL or cable-modem connection. There are significant applications in business environments, however, particularly in small and midsize businesses and branch offices where up to 30 or so employees require high-speed network access. Today's WLAN offerings easily scale to meet these needs, and with the maturity of voice-over-WLAN products in 2004, it's not unreasonable to imagine a totally wireless office. Best of all, wireless makes moves and changes a breeze.

There are cable-replacement benefits beyond the office as well. Advancements in outdoor wireless networking are particularly notable, even if their future isn't so clear. Simple applications, like high-speed metropolitan-area wireless replacements for T1 and T3 connections, provide insanely appealing ROI under the right circumstances: Although these fixed-wireless systems offer very long range--up to 35 miles in some cases--their reliance on line-of-sight between antennae makes deployment a geographical challenge.

Fixed wireless is maturing, and newer technologies are opening the door to new multipoint applications. There's a fair amount of buzz these days surrounding the 802.16a (WiMAX) standard, which may just be the enabler of the low-cost wireless DSL services we've been anticipating for years. From a physical-layer technology perspective, WiMAX bears not even the slightest resemblance to DSL, but the promise is that it will offer broadband data service comparable to DSL at a competitive cost, all without wires. WiMAX is targeted at home and small-office use, and at businesses located in areas underserved by traditional ISPs. Continued standardization means lower-cost modems, base stations and service fees, all good for these smaller spenders.If Intel and its allies have their way, WiMAX will follow in the footsteps of Wi-Fi, with a huge market and low costs. We don't think that's likely, at least not in 2004, but the technical issues being addressed by WiMAX will provide new options for last-mile connectivity.

Wireless LAN Is King

Every technology market has its skeptics, and a number of IT professionals still believe WLANs are a convenience rather than a necessity. But the number of naysayers appears to be dwindling. Although not necessarily the top priority of enterprise IT, WLAN infrastructure implementation almost always wins a spot on the to-do list.Dominating the enterprise wireless LAN market is Cisco Systems, which also put some skin in the SOHO wireless market via its acquisition of Linksys. Synergy Research Group pegs Cisco's enterprise market share at more than 35 percent, but if you look beyond the verticals where vendors like Proxim Corp. and Symbol Technologies have some strength, Cisco is actually much more dominant in the broader enterprise-network market. Persuading the manager of a Cisco Ethernet shop to consider alternative wireless vendors is like trying to get a diehard football fan to spend Super Bowl Sunday at the opera--it's possible you'll succeed, but highly unlikely. And if that isn't enough to convince you of Cisco's superior influence in wireless, note that most of Cisco's Ethernet challengers--Enterays Networks, Extreme Networks, Foundry Networks, Nortel Networks and 3Com Corp.--have enjoyed little, if any, success with wireless.

Cisco's most credible threat comes from start-ups, of which there are plenty. The typical profile is a company that's been in business for less than two years and has about 50 employees. It's hard to imagine a $150 billion company like Cisco worrying about start-ups, but it should--not so much because one of these newcomers is likely to unseat Cisco, but because a start-up's ability to attract venture capital is a powerful indicator of the technical deficiencies of Cisco's WLAN offerings.

Look for Cisco to address those deficiencies in 2004. The company says it hopes to develop new capabilities in-house; but in the event it doesn't, an acquisition won't come as a shocker. If Cisco stumbles, a few start-ups could get some significant traction. Sadly, most will fail.

Beyond the business and market issues surrounding Cisco's dominance, plenty of WLAN technology issues will keep us busy in our labs during the coming year. Three stand out. First, we're inching closer to a new generation of 802.11 security standards. Although no complete solution has been offered to date, these standards are critical to addressing enterprise concerns regarding the risk of wireless deployment, and 2004 is likely to be the year in which standard-compliant products will be unveiled.

Second, continued improvements to 5-GHz 802.11a WLAN products will solidify their market position, and that, coupled with the expected expansion of unlicensed spectrum in the 5-GHz band, will further enhance IT's ability to engineer scalable WLANs. Legacy 802.11b won't go away, but all credible infrastructure will support both the old and the new.Finally, we expect the increased acceptance of voice over IP to have a spillover effect on the WLAN market. Wireless VoIP not only will enhance the appeal of wired VoIP but will also spur the deployment of WLAN infrastructure, especially as standards take hold and prices fall.If recent history has taught us anything, it's that there is no perfect mobile-computing and communication device. The notebook computer, in a range of shapes and sizes, will continue to be the computing companion of road warriors everywhere. But the maturation of the so-called smart phone, which combines phone capabilities, PDA functionality and data services with a bit of multimedia entertainment, will likely see its most significant development yet in 2004.

Look for compelling products to be offered at prices as low as a few hundred dollars, even less if you acquire them with new wireless service. And wireless phone-number portability is making it easier for consumers to switch carriers--which opens the door for new client-device purchases, as every carrier tends to have unique handset offerings.

Competition exists at every link of the value chain. With sales volumes in the millions, the stakes are quite high. Palm, Microsoft and Symbian all have mature technology and solid industry alliances. The need to differentiate drives innovation, as does the desire not only to meet the needs of consumers but to integrate with enterprise applications. It's not easy to engineer a device that will meet such diverse needs while preserving the portability and way-cool functionality people demand.

One way a mobile product sets itself apart from the competition is to support as many radio standards as possible on a single device. Today, that means integrating multiple radios, thereby communicating via different protocols in different radio bands. Thus the primary engineering challenges are integration, performance and battery life. Look for progress in all areas during 2004. Eventually, software-based radios and adaptive antenna technology will provide the flexibility the market demands.

Wireless WAN Makes Steady Progress

First, there was analog cellular data. Then, second-generation (2G) digital services appeared. Both offered excruciatingly slow data services. Development of third-generation (3G) services has been stalled by high cost and spectrum limitations. Nonetheless, in the past year, we have seen interim high-speed 2.5G services appear that provide significant wide area wireless service improvements for business users.

High-speed is a relative term, of course, with 70 Kbps qualifying in this market. Nonetheless, it's notable that every major cellular-voice provider, with the exception of Nextel Communications, rolled out ubiquitous 2.5G data services during the past year.

Unfortunately, 2.5G comes in different flavors. In the United States, GPRS (General Packet Radio Service) is available from AT&T Wireless, Cingular Wireless and T-Mobile. CDMA2000 1XRTT services are offered by Sprint PCS and Verizon Wireless. CDMA carriers have a slight performance advantage, with typical throughput of 50 to 70 Kbps, compared with GPRS performance of 30 to 40 Kbps. One characteristic they do share is high latency, which may require some reworking of applications designed for wired networks.Although CDMA2000 is ahead, the market is ripe for some leapfrogging. GPRS carriers are deploying EDGE (Enhanced Data Rates for GSM Evolution) technology that boosts typical throughput to around 120 Kbps. AT&T Wireless expects to have its entire network upgraded to EDGE by the start of 2004, whereas Cingular Wireless is likely to complete that transition by the end of 2004. T-Mobile says it plans to start its EDGE upgrade in the coming year.

And the game is far from over. Verizon Wireless has deployed a true 3G technology called 1XEV-DO (1X evolution data only) in San Diego and Washington. This new iteration of CDMA2000 technology is expected to boost real-world throughput to around 300 Kbps. That's not broadband, but it's close.

History suggests that widespread uptake doesn't begin until an operator has nationwide coverage, and it's likely that Verizon will adopt a wait-and-see approach before stretching too much further. In other words, don't expect 2004 to be the year that 1XEV-DO goes nationwide.

Sprint PCS is holding off until a newer version of CDMA2000 called 1XEV-DV becomes available. Although the data rates don't improve with 1XEV-DV, the technology provides more flexibility for operators in allocating limited spectrum to both voice and data services. Meanwhile, the 3G successor to EDGE, called WCDMA, will see limited deployment in 2004 when AT&T Wireless tests it in four cities.

Technology aside, the uptake of cellular data services has been meager, representing only about 5 percent of carrier revenue in the United States. In Europe, where SMS (short message service) is much more popular, market penetration is about twice as high.To gain more customers in both the United States and Europe, carriers need to come down in cost. Indeed, there's some evidence to suggest that a price-lowering trend is already under way. T-Mobile's aggressive $30-per-month unlimited rate plan may be indicative of where prices will be by the end of next year, but carriers need to be cautious because of spectrum limitations. Too much data usage could quickly swamp the capacity of their networks.

Although wireless e-mail is probably the most compelling enterprise application for 2.5/3G data services, overall market success will be driven largely by consumer applications. Camera phones are selling well, and digital photography will likely be a basic feature in all phones by the end of 2004. Wireless gaming is also gaining traction, as is a new generation of wireless instant messaging (if we can find a device that makes it easy).

Confounding the 3G deployment issue is the increasing availability of Wi-Fi wireless hotspots. With all cellular operators now deploying hotspot networks, one wonders whether these operators can afford both hotspot and 3G deployments. Although providers search for the best hotspot business model, we expect to see some hotspot failures in 2004 as vendors discover that traditional business models don't yield profits in these markets. But despite these anticipated failures, we remain bullish about the hotspot market, though it's likely to take several years before users have anything approaching ubiquitous access.While we expect mainstream wireless LAN and 2.5/3G services to mature in 2004, we also look for some emerging wireless technologies to make their early mark. UWB (ultrawideband) chipsets have begun to appear, offering alternatives for high-speed, limited-range wireless as well as unique remote-sensing applications. Better standards are needed to spur the market further.

Location awareness will also emerge as a central element of mobility initiatives. Built around the freely available Global Positioning System and related services, this technology has many applications that range from public safety to logistics to field service. Eventually, GPS technology will be embedded in all mobile devices. This will enable new business applications but will no doubt raise the eyebrows of civil libertarians.

We also expect mesh-based networks to play a more significant role in the wireless market, with commercially viable products making some headway in 2004. In a mesh network, individual nodes assume greater prominence in routing data throughout the network. This complex approach not only enables new peer-to-peer applications, it also offers potential benefits in terms of performance, scalability and deployment costs.We're already seeing mesh technologies employed in some WLAN and metropolitan wireless products. For example, Strix Systems offers a mesh WLAN that uses 802.11a as a backbone for APs that provide service to 802.11b clients.

These emerging technologies will take years to mature. It took 20 years for the cell phone to reach current levels of functionality and deployment. It's taken almost that long for wireless LANs to hit it big.

Don't expect a wireless data revolution in 2004. But progress is something you can count on.

Dave Molta is a senior technology editor at Network Computing. He is also assistant dean for technology at Syracuse University's School of Information Studies and director of the Center for Emerging Network Technologies. Write to him at [email protected].

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Airespace: Early leader among the enterprise Wi-Fi start-ups, Airespace just might have the products and management to succeed.Airgo: With $55 million in venture capital and multiantenna signal processing, Airgo could shake up the Wi-Fi market.

Atheros: One of the original wireless chip start-ups and the only one to go public, Atheros continues to lead the market in innovative technology.

Azimuth Networks: Azimuth's wireless network test equipment isn't sexy, but it will result in better products hitting the market.

Boingo: Its name conjures up Saturday morning cartoons, but Boingo has emerged a leader in the Wi-Fi hotspot market without deploying a single AP.

Cisco Systems: Cisco needs to respond to new competition in the WLAN market; its market share and high margins are at stake.Hewlett-Packard: HP talks a lot about mobility, and its labs do lots of interesting research; now it's time to do more than make nice PDAs.

Intel: First there was the Centrino marketing campaign. Now Intel needs to step it up with the technology that delivers on its promises.

Pumatech: By acquiring Synchrologic, this long-time desktop-sychronization leader has positioned itself as a leader in sync technology, which is critical to mobile-application development.

Strix Systems: At last, a WLAN start-up that doesn't look like the rest; Strix's use of mesh technology makes deployment easy.

T-Mobile: T-Mobile isn't as big as its competitors, but it tries harder by offering the least expensive 2.5G cellular data services.Xtreme Spectrum: This early developer of ultrawideband chipsets is doing battle with heavyweights on the direction of 802.15 UWB standards.

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