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Published: December 19, 2001

 
 

Capturing Value in the Enterprise Wireless Market

Tired of waiting for 3G Wireless Technology? Try 2.5G

Despite the delayed deployment of so-called 3G technology in the U.S., wireless enterprise applications and e-commerce solutions are now available, generating revenues for their creators and new efficiencies for early adopters. Corporate America can profit from this technology today, with payback periods measured in weeks.

“There are many applications, from simple messaging to wireless extensions of existing CRM and ERP solutions, that do not require high bandwidth to be of value.”
To be sure, interactive-rich media games and video conferencing by cellphone must await the broad release of 3G, the generic term for broadband wireless access, which promises cable-modem-like speed. In Tokyo, NTT DoCoMo, Inc. has rolled out what it called the world’s first true 3G wireless network, and the company plans to spend $8 billion over the next three years to make the technology available across Japan. However, no European or American carrier has announced a launch date for a similar service.

Nevertheless, there are many applications, from simple messaging to wireless extensions of existing CRM and ERP solutions, that do not require high bandwidth to be of value. Data transmission speeds of 28K to 56K are enough to support 2.5G solutions being introduced today. And some applications can perform admirably even at the far slower 14.4K digital cellular rate.

No Need to Wait
Although consumer applications have generated the most wireless Internet buzz, we believe that more sustainable opportunities exist for wireless and mobile — what has come to be known as m-business — solutions. Rich wireless applications will break traditional wire tethers and extend the boundaries of the enterprise. CIOs who have spent millions on Siebel or SAP installations can layer on wireless technology for $50,000 to $100,000 and get it into the hands of people who can use it immediately.

“CIOs who have spent millions on Siebel or SAP installations can layer on wireless technology for $50,000 to $100,000 and get it into the hands of people who can use it immediately.”
Wireless modems add new utility to laptops. The value of sales-automation software increases when it’s modified to provide an “always on” connection and a simple Web-based user interface. A busy employee can refresh contact histories and synchronize databases on the fly, without ever having to spend time dialing in and downloading.

The coming wave of wireless enterprise adoption will reflect previous developments. A few farsighted, tech-savvy businesses have integrated wireless technologies into their mission-critical applications since the mid-1980s. This first wave of wireless enterprise applications enabled early adopters — for whom mobility was critical — to incorporate wireless capability into the hearts of their basic businesses and operations (e.g., FedEx, UPS, Avis, and Hertz). In the mid- to late 1990s, the second wave enabled companies to provide consumer content wirelessly (e.g., CNET, Yahoo, Charles Schwab, and Fidelity).

More Than Sex Appeal
The third and latest wireless wave will be characterized by the development of focused end-to-end enterprise solutions that facilitate critical applications, and also have attractive cost-benefit economics. In this pre-3G environment, the concentration will be less on “sex appeal” (the focus of the wireless consumer boom) and more on delivering real economic benefit to the enterprise. This will be achieved by leveraging already significant IT investments to deliver higher productivity, more sales, and better customer service.

“The third and latest wireless wave will be characterized by the development of focused end-to-end enterprise solutions that facilitate critical applications, and also have attractive cost-benefit economics.”
Though the third wave is nascent, its potential is evident. Companies are already deploying such basic applications as messaging and e-mail to improve employee productivity outside the office. OmniSky, Research in Motion (RIM), and GoAmerica, whose services are used by enterprises primarily for messaging and e-mail, have all seen subscriptions rise substantially in 2001. RIM reports that the total number of BlackBerry subscribers on September 1 was 246,000 — a 50 percent increase in six months. Although the numbers are still small, RIM is capturing some really high-paying subscribers.

 
 
 
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Resources

  1. The Future of Enterprise Software, s+b enews, 7/16/01 Click here.
  2. Winning on the Wireless Web, s+b enews, 9/25/00 Click here.
 
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