Can wireless cut IT?

Last year was a turning point for wireless technology. The advent of the public hotspot, coupled with WiFi enabled laptops and PDAs, meant mobile computing became a viable sell for the channel. CME investigate the wireless landscape.

  • E-Mail
By  Paul Barthram Published  January 29, 2004

|~|ballsyloon.gif|~|Last year saw a boost to the industry with an increasing number of hotspots throughout the Middle East, allowing business to cut free from the wireless way.|~|Last year was a turning point for wireless technology. The advent of the public hotspot, coupled with WiFi enabled laptops and PDAs, meant mobile computing became a viable concept for the channel to sell. Fighting off security concerns, slow adoption, and bandwidth obstacles, just how well has mobile computing taken off in the Middle East IT channel? As a proof of concept for public wireless hotspots, the French Connection café on Sheikh Zayed Road in Dubai is an excellent showcase. Amongst the otherwise occupied diners, the café plays host to a clientele of young professionals who, armed with the latest WiFi enabled devices are busy sending emails and checking up information on the café’s internet connection. French Connection is one of a small but growing number of locations in the region that have launched hotspots. The set up is simple enough: customers bring in their mobile devices, ask for an internet log in code and all the café has to do is pass on the internet access through its Cisco Aironet 1100 Series wireless access device. This is routed through a local server and fed through the café’s high speed internet line. Observing this new phenomenon — a diner who works in a café but hardly eats — it doesn’t seem immediately clear where the café makes its money from by offering the free wireless internet access. “French Connection has put in wireless internet access as an additional service to bring in more customers. Customers come in, buy a cup of coffee, they may stay longer. That’s fine, because it becomes a cafe where people will make a point of coming to,” says Toni Prince, Intel’s business development manager for telecommunications, Middle East and Africa. As an early adopter of wireless hotspots the French Connection certainly benefits from its push towards bringing in clientele, but hotspot implementation is still in its infancy and neither the café nor the installation partner are making much money out of the set up. Only when mass adoption kicks in and a revenue sharing model is put in place will this change, but Prince remains confident. “As we move into 2004 many coffee shops are going to look for ways to make money out of hotspots, be it through online advertising or hooking up with the local ISP and selling access. These early implementations are designed to build up loyalty amongst their customers. It is a way to generate higher footfall,” continues Prince. Originally adopted by the military, wireless technology has only moved into the commercial arena within the past five years. Last year saw a boost to the industry with an increasing number of hotspots throughout the Middle East. This was supported by a new range of lighter and more transportable mobile computing products, with improved battery life. The WiFi standard for access points is also making advances, under the watchful eye of the IEEE standards committee as well as leading vendors of wireless kit such as 3Com, US Robotics, Cisco and Senao. In terms of wireless access, the market has four choices: 802.11, 802.11a, 802.11b, and 802.11g. The latest standard, 802.11g, offers users speeds of up to 54 Mbits/s, but the majority of places where the mobile user can go are limited to the 802.11b standard, meaning transmissions of only 11Mbits/s. The available bandwidth is adequate for recreational web surfers, but for business users needing to use more taxing applications today’s technology is not delivering the speeds. Regardless of this limitation, customers are buying into wireless products according to the vendors and channel partners.||**|||~|prnzamngmn.gif|~|“One really big advantage is the infrastructure available, you can access your data anytime and anywhere now," says Prince.|~|“Wireless infrastructure has grown substantially and now we see wireless technology has started playing at least some role or the other in our daily routine,” says Pradeep Angeveetil, Cisco and Linksys product manager for Tech Data. “A few years ago wireless had a limited market, because originally it was pretty slow and expensive. Now we’ve seen a really dramatic price drop, and a higher technology acceptance,” says Stanislas de Boisset, network consultant, 3Com Middle East. Deepak Ashar, corporate business consultant for network infrastructure solutions at Seven Seas, also believes the channel has benefited from simpler and cheaper wireless equipment. “It has progressed quite well. There’s more ease of use and ease of manageability now. More wireless applications are available and connectivity technology offers a good level of security,” says Ashar. Technology improvements have led to improved sales of wireless equipment, and there are many locations now setting up hotspots. Cafés and coffee shops rank high as early adopters and no new luxury hotel is complete without a wireless hotspot. But hospitals, small businesses and even homeowners have all been quick to see the benefits of the technology. Not forgetting key segments such as government departments and higher education. “Certainly the value wireless brings in vertical markets is very easy to define,” says Ian Phillips, manager of marketing for mobility products at Cisco, EMEA. “Education facilities providing blanket wireless coverage for their campuses no longer need to provide [so] many computer rooms. This is because the students can use their own laptops, and that frees up real estate and delivers a cost impact for the faculties because they don’t have to support as many computers.” Keen to advance sales of wireless technologies, vendors and channel partners are banging the drum of the intrinsic value wireless can bring to individuals with wireless devices and for those implementing wireless hotspots. “Flexibility is the biggest advantage and this translates into improved efficiency levels for warehouses, courier companies, hospitals, airports, hotels, and large factories. Space management also gets easier as wireless is available as an option in places where wired solutions would have been an expensive proposition,” says Tech Data’s Angeveetil. “Wireless is ideal for companies where every one or two months you’re adding people, and changing desks around. This is because it is very simple as there is no cabling to be done. Every new user receives a new PC card or PPI card for their computer and that’s it. There really is no cost for adding or changing the location of staff,” says Peter Blampied, director of sales, US Robotics EMEA. Advantages are not restricted to businesses. As wireless technology constantly improves; users have the freedom of movement to move beyond their desks. “One really big advantage is the infrastructure available, you can access your data anytime and anywhere now. So work has become something you do now, rather than a place you go to,” says Prince. “Now an end user can work from their corporate network anywhere via a hotspot location. Wireless technology now gives automatic wireless configuration to your company intranet, regardless of the hotspot settings you upload from,” says Boisset.||**||Working the market|~|standaman.gif|~|3Com's Stanislas de Boisset says the margins to be made from wireless can come from services.|~|With the opportunity to work from anywhere at anytime, you’d almost expect everybody to be leaping on this technology, but this is still a market that needs nurturing. Security is still seen by some as a concern, though the vendors will now tell you this is an area that has been addressed. It is also an area that can be improved upon with third party solutions, and regular updates — as would be the case with wired equipment. Another issue for companies is the use of complex applications requiring high bandwidth. Companies running design software, ERP or other bandwidth intensive applications will struggle with today’s bandwidth capacity on wireless equipment. US Robotics has a 100 Mbits/s wireless access point, but standards need to be ratified, and equipment with matching bandwidth capacities joined together to allow applications to run at these speeds. Mostly the channel will recommend that wireless is not for high bandwidth needy customers, and those looking to implement the wireless technology should consider it as an extension of the existing wired network, but not as its replacement. Of those large enterprises that have installed wireless so far, implementations have been limited to boardrooms or offices with low bandwidth requirements. In contrast SMEs and start ups without legacy wired networks are seeing the benefits from the outset. “I see the insertion area [for the channel] as the mid market. And for the Middle East that might be 250 users, because it is easier to deploy wireless throughout businesses of that size,” says Phillips. “Mid level businesses always have a small floor space area, making wireless deployment easier. Wider coverage — covering one area or multiple rooms — is much more difficult. So this makes the mid level businesses the best for early adoption of this technology,” explains Seven Sea’s Ashar. Wireless technology deployment is now seen as relatively simple. Indeed the SOHO and consumer market is the largest adopter of the technology according to Cisco, which estimates 60% of sales to consumers and 40% to businesses. And yet while the consumer market does well, margins in this space are thin for the Middle East resellers. Long-term goals for channel partners in the wireless future seem limited. From a vendor standpoint, wireless is a cash machine. Convince the consumer they need wireless equipment and devices; convince the businesses they need to install access points, update on regular intervals, and the vendor has money rolling in. So where, apart from selling some high-end laptops to consumers, and a few wireless access points, do the channel partners fit in? “We all know that if we go into a computer shop in the UAE the margins are very low, because all they want to do is sell volumes. It is the partners, service providers, and system integrators, that will provide real services of installation, maintenance, software upgrades and this is where you’ll see margins being made,” says Boisset.||**||Future revenues|~|Ian-Phillips-2.gif|~|“From a channel perspective, partners quoting for networks today should think about offering wireless as an additional extra in the tendering process," says Cisco's Ian Phillips.|~|Besides the channel players and the wireless equipment vendors, the internet service providers (ISP) are looking at a scheme whereby they will install a wireless network and operate it. The hotspot host is then paid back some leasing money from the ISP based on usage. This can be a winning formula for the premises, as it is the ISP investing in installation and maintenance, but again channel involvement, if any, would be minimal. An interesting concept for the channel would therefore be if they could take advantage of the revenue sharing agreements. A channel partner could easily replicate the same ISP agreement by providing the equipment and maintenance, take care of the bill for the fixed line internet access and then offer the hotspot host a similar deal to that offered by the local ISP. Alternatively the channel partner could strike an agreement with the local ISP for doing the same job, thereby alleviating the ISP of providing the expertise, installation and maintenance and securing a cut of the revenues for some long-term income. As far as the market is concerned, there is still some distance to go before wireless technology can have a profound impact on a channel partner’s business, but most channel players feel the time is ripe for early entry. “From a channel perspective, partners quoting for networks today should think about offering wireless as an additional extra in the tendering process. Wireless is expected in the future and that needs to be understood. There are real opportunities for developing mobility services, and offering the most cost effective solution for a technology which will soon be widespread,” says Phillips. “I’m really trying to push all our partners to give customers wireless as an option now and propose it at a really small premium. So far the response has been positive. For our partners it is what sets them apart from the competition,” says Boisset. Whether it’s the increase in wireless mobility products, wireless consumer products, public hotspots, or even young businesses without the restrictions of legacy systems adopting the technology, all the signs indicate wireless is set to become a key revenue for channel partners in the future. It is worth considering however, that there are 20,000 hotspots worldwide today, and the Middle East as a region has less than 50. To take a step forward the region will need to see a sudden burst in demand for wireless and a secure business model for hotspots before mass adoption can make wireless a strong business proposition for the channel.||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code