Gartner Says Corporate Wireless Is One Of The Most Significant and Immediate Technology Shifts
Worldwide end-user spending on wireless LAN equipment grew by 38 percent in 2002
Florence, Italy, 11 March 2003 — Speaking at its annual spring Symposium/ITxpo in Florence, Italy, Gartner today outlined its perspective and predictions for the wireless market. It said wireless will be one of the most significant platform shifts accelerating in 2003 and taking off with a vengeance in 2004.
According to Gartner, increasing focus on teleworking and corporate mobility to improve enterprise performance, and trends such as the move toward the real-time enterprise, will not merely exploit mobility but will demand it. At the same time, the relentless push by vendors, virtually giving away wireless capabilities with significant price/performance improvements, is fuelling demand for wireless technology in the corporate marketplace.
Gartner highlighted that there is no wireless technology to meet all corporate business needs. Each provides different trade-offs in terms of bandwidth, range and cost. It said the business and the IS organisation must unite to identify what to use the technology for and when to start doing it. It said companies developing a wireless strategy will need to support an array of wireless technologies such as wireless LAN (WLAN), GPRS, UMTS and Bluetooth for at least another five years.
According to new research from Gartner Dataquest, worldwide end-user spending on WLAN equipment grew by 38 percent to reach $2.3 billion in 2002. In unit terms, shipments more than doubled to reach 15 million adapters and 4.4 million access points and gateways. Prices on average fell by 37 percent in 2002, with Gartner forecasting a further 25 percent fall in 2003. Spend in Europe accounted for less than 20 percent in 2002 and is forecast to grow to 30 percent by 2007.
Transforming a company into a wireless enterprise is not easy or risk-free. However, according to Nigel Deighton, Vice President at Gartner, "Don't worry about the technology, we have plenty of it and it works pretty well by now. Worry about how you are going to integrate mobility into your working culture. It makes little difference to strategy if technology is unstable and continues to change over the next five years. The crucial point is to understand how wireless and mobile technologies can improve enterprise performances, and to start rethinking business processes and working models."
Industry ramps up wireless focus
The drive from enterprises towards mobility is matched by a relentless focus from the vendor community and mobile operators. For PC vendors, wireless is an essential catalyst to drive mobile PC growth and to enable higher margins.
According to Brian Gammage, principal PC analyst at Gartner Dataquest, "For them, wireless is fast becoming a must have, not a nice to have. For many commercial notebook purchases, WLAN is already a checklist item that vendors have to offer if they're going to win the sale." He added, "PC vendors are already working to optimise their mobile products for use in a wireless environment by adopting technologies that will help extend battery lives."
Gartner said most wireless LANs are currently purchased as an add-on PC adapter. However, while in 2002, approximately 10 percent of all mobile PCs were shipped with a wireless LAN included, this will increase to 31 percent in 2004. By 2007, Gartner forecasts that 68 percent of mobile PCs shipped will include a wireless LAN.
Competing wireless technologies
Wireless LAN has branched out beyond the corporate premises to public access areas. This stirred interests from the telecom and IT industries and fuelled speculation about the role of WLAN and the impact on GPRS and 3G.
Gartner said WLAN and 3G will coexist rather than compete directly. Gartner predicts that by the end of 2003, 70 percent of European mobile operators will offer WLAN solutions. However, by 2005, there will be more fixed operators than mobile operators offering access to WLAN hotspots. According to Jason Chapman, senior analyst at Gartner, "Both mobile and fixed operators have strong billing and support capabilities, as well as client relationships with corporates that are potential customers of wireless hotspots. However, fixed operators have the added advantage of additional backbone capacity to carry hotspot data traffic and also have more experience in offering data oriented solutions."
Gartner warned enterprises that a battle among network vendors for market share has led to sales of pre-standard, uncertified products based on several emerging 802.11 standards. Gartner advised companies to watch out for uncertified wireless LAN products and said companies should only purchase certified equipment and seek guarantees of ability to upgrade to emerging standards.
WLAN market in Europe
2002 saw nearly 6000 hotspots worldwide, with North America accounting for 57 percent compared to around 14 percent in Europe. Europe has lagged the US, primarily due to the regulatory environment, which until 2002, prevented operators from operating with a profit. Cost of entry for a business who wants to provide wireless access continues to be an issue.
However, Gartner said that after a slow start, the hot spot market in Europe has finally started to take shape. Both hot spot operators and an increasing number of established mobile operators and telecoms carriers are planning to deploy hot spots throughout Europe. Gartner predicts Europe will have in excess of 5000 commercial hot spots in operation by the end of 2003.
According to Chapman, "Providing the remaining regulatory issues can be sorted out by the end of this year, we estimate there will be 11 million frequent hot spot users and a further 12 million occasional users of these services by 2007. In 2007, Europe will account for 30 percent of the worldwide market.
WAN Wireless
Mobile operators, brandishing the new, improved services available through general packet radio service (GPRS) and third-generation (3G) data services, are counting on a good year for wireless data.
Voice will continue to be the mainstay of the industry and prices will continue to decline.
Serial thinking (solving one problem at a time) will plague the operators, causing data revenue to be less than expected. Operators will believe that faster networks should cause an uptake in data services, but complex pricing and PC-like applications that operate poorly on small handset screens will limit growth.
Chapman added, "Mobile operators all see corporates as a potential growth area. But the average operator has little understanding of corporate IT so they make poor corporate partners. And there aren't enough corporations to go round so some operators will be disappointed, and corporations will be able to haggle."
Bluetooth
Despite three years of hype, Bluetooth remains stuck in the 'trough of disillusionment' on the Gartner hype cycle. Its best opportunity to become a mass-market technology is in mobile phones, rather than as an option for wireless networking. Gartner Dataquest estimates that more than 100 million phones were sold in Western Europe in 2002, of which 9 million were Bluetooth enabled.
Enterprises can afford to wait for Bluetooth until de facto standards emerge that drive interoperability between manufacturers. They can expect Bluetooth products to add value to business users through limited deployments as cable replacement and as gateways attaching mobile phones to personal digital assistants (PDAs) and computers.
Security
Gartner said the market has reached a stage where the benefits of deploying wireless now outweigh the risks. While there have been well-publicised concerns about Wireless LAN security, it said WLANs can be secured using Virtual private network (VPN) technology, while the new Wi-Fi Protected Access security solution (WPA) adds robust authentication and encryption to Wi-Fi certified equipment.
According to Deighton, "It's easy to fall into the trap of looking only at the hype when it comes to risk. We are advising companies to be realistic about security and take some very basic steps. For example, ensure that employees secure their mobile devices with PIN codes. There is a tendency to bolt the door and leave the windows open."
Gartner Recommendations
To transform a company into a wireless enterprise, certain areas must be understood in order to manage the risks and optimise the opportunities:
Strategic: successful initiatives to date have clearly defined business process improvement objectives, such as higher efficiency or better product quality. Technology-driven initiatives have had disappointing results. Any wireless initiative should be driven by business requirements, have clear business objectives and provide tangible benefits.
Organisational: wireless solutions cannot be deployed successfully without understanding the potential impact of adoption, and the mobility needs of the people participating in the processes involved. Issues include new working practices, skills and training, and potential legal and ethical risks in the relationship between employer and employees. Enterprises must analyse their mobile workers and identify common profiles to build wireless solutions that address each category's specific needs.
Economic: A wireless initiative is perceived to be successful when measurable benefits are obtained within 18 months. Managers should plan wireless initiatives, focusing on applications that provide these benefits quickly. They must remain aware of the details of the total cost of ownership. Controlling wireless costs is a major challenge - particularly for wireless access services, such as general packet radio service (GPRS). These services do not always provide high availability or quality, yet they are extremely expensive.
Technological: Most promising mobile and wireless technologies are not yet mature and are continuously evolving. Heavy investment in emerging technologies (such as Bluetooth) or early deployment of new standard implementation releases can be risky. Enterprises must understand the likely evolution of technologies and focus on those that are reasonably mature.
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