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(originally published by Booz & Company)


Capturing Value in the Enterprise Wireless Market

In the U.S. alone, subscribers to such wireless enterprise services are expected to number 26 million by 2005. Growth will be driven by:

  • advances in wireless application development and mobile security;
  • key technology enablers such as always-on connectivity, higher mobile bandwidth, and location-based services; and
  • increased enterprise comfort with and demand for wireless applications.

A Fourth Wave
Technically skilled, venture-capital fueled, and B2B oriented, Wireless Application Development (WAD) companies to date have concentrated on discovering, developing, and delivering applications, the exact nature of which may not yet be apparent. Europe already has around 3,000 such firms, most less than two years old and employing fewer than 40 people.

“Many leading vendors seem not only poor at harnessing the WAD industry, they are unwittingly stifling it.”
In 2001, Booz Allen Hamilton conducted the first major global study of the supply side of the WAD industry — the players themselves. Out of a carefully compiled “Hot 350” companies, 140 were interviewed in the U.K., France, Germany, Scandinavia, and the U.S., a response rate of 45 percent.

This emerging core of hot companies may hold the key to unlocking the value of mobile data. For established players, the ability to embrace innovation could make the difference between winning and losing in the race to develop “killer apps.” Yet, as this report by Booz Allen finds, many leading WAD vendors seem not only to be poor at capitalizing on the inventiveness of their industry, but they also are unwittingly stifling it.

Many major firms exhibit the very behaviors that threaten to undermine the young industry at birth: slowness to commit (the No. 1 worry for WAD players); an unclear position toward other WAD players (Are they partners? Suppliers? Competitors?); and lack of focus. One especially common complaint among major players is that they lack a single point of contact for handling new partnerships.

“Ultimately, winners will develop and deliver
end-to-end solutions by recognizing their capability gaps and filling them.”
Despite such clear warning signs, the wireless industry is forging ahead, investing significantly in applications as well as infrastructure. The always-on nature of new 2.5/3G packet-based networks will allow increased interactivity, enabling services similar to those available in the wired LAN environment. This real-time always-on capability will drive enterprises, especially small businesses, to adopt 3G data services earlier rather than later.

Before 3G: Plenty of Opportunity
The value and ROI of truly mobile, real-time, higher bandwidth access to business information is unmistakable, but it will be at least another year or two before the industry is ready to offer truly vertical end-to-end wireless enterprise solutions. In the meantime, CIOs should be considering the potentially significant improvements in sales force productivity, customer service, and supply chain and manufacturing efficiencies that can be realized today.

Over time, up to 70 percent of industry value will shift from the provision of pure network capacity toward the delivery of end-to-end solutions to the enterprise. However, no one player in the value chain has all the capabilities required to capture this value, and gaps in skills are becoming apparent. Ultimately, the winners will develop and deliver end-to-end solutions by recognizing their capability gaps and filling them. Success will come through partnerships and innovation — but the window of opportunity is closing.

Carolina Junqueira, [email protected]
Carolina Junqueira is a vice president with Booz Allen Hamilton in New York. She has worked extensively with several of the leading wireless interests in the United States, Europe, and Latin America.

Sajai Krishnan, [email protected]
Sajai Krishnan is a vice president with Booz Allen Hamilton in San Francisco. He has worked with a variety of telecom, wireless, software, and computer firms in the United States and abroad.

Gregor Harter, [email protected]
Gregor Harter is a vice president with Booz Allen Hamilton in Munich. His work is concentrated in the telecom sector in the United States and Europe.

Mark Page, [email protected]
Mark Page is a vice president with Booz Allen Hamilton in London. He specializes in the wireless sector and works with clients across Europe on 3G issues.
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  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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