Maximizing Strategic Opportunities From Mobile Communications Technology (Management Briefings Executive Series)

Maximizing Strategic Opportunities from Mobile Communications Technology

In an increasingly competitive world, we believe it’s quality of thinking that will give you the edge – an idea that opens new doors, a technique that solves a problem, or an insight that simply makes sense of it all. The more you know, the smarter and faster you can go. That’s why we work with the best minds in business and finance to bring cutting-edge thinking and best learning practice to a global market. Under a range of leading imprints, including Financial Times Prentice Hall, we create world-class print publications and electronic products bringing our readers knowledge, skills and understanding which can be applied whether studying or at work. To find out more about our business publications, or tell us about the books you’d like to find, you can visit us at www.business-minds.com For other Pearson Education publications, visit www.pearsoned-ema.com

Maximizing Strategic Opportunities from Mobile Communications Technology SANDRA KAY MILLER

IT B RIEFINGS ’ S ERIES EDITOR : S EBASTIAN N OKES An imprint of Pearson Education London ■ New York ■ Toronto ■ Sydney ■ Tokyo ■ Singapore ■ Hong Kong New Delhi ■ Madrid ■ Paris ■ Amsterdam ■ Munich ■ Milan ■ Stockholm

■

Cape Town

PEARSON EDUCATION LIMITED Head Office: Edinburgh Gate Harlow CM20 2JE Tel: +44 (0)1279 623623 Fax: +44 (0)1279 431059 London Office: 128 Long Acre London WC2E 9AN Tel: +44 (0)20 7447 2000 Fax: +44 (0)20 7240 5771 Website: www.briefingzone.com

First published in Great Britain in 2002 © Pearson Education Limited 2002 The right of Sandra Kay Miller to be identified as author of this work has been asserted by her in accordance with the Copyright, Designs and Patents Act 1988. ISBN 0 273 65914 6 British Library Cataloguing in Publication Data A CIP catalogue record for this book can be obtained from the British Library. All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1P 0LP. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers. 10 9 8 7 6 5 4 3 2 1 Typeset by Monolith – www.monolith.uk.com Printed and bound in Great Britain by Ashford Colour Press Ltd, Gosport, Hants. The Publishers’ policy is to use paper manufactured from sustainable forests.

About the series editor

Sebastian Nokes is Series Editor for the IT Management series within the Financial Times Prentice Hall Executive Briefings and has written and co-written several works on the subject. These Briefings are designed to provide concise, focused knowledge, concerning critical IT issues facing human managers today. They deliver the information and insight needed to evaluate situations and make informed decisions. Sebastian is a partner at Kimbell Evaluation Ltd, a leading consulting and analytical firm. Kimbell Evaluation was co-founded by Sebastian and helps clients measure and manage value added by information technology, both in stable organizations and in business or divisional turnarounds. His consulting clients include international financial institutions and commercial corporations. Sebastian began his career in the IT and investment banking industries, and has been an employee of Credit Suisse First Boston and IBM. He was educated at London University, served in the 2nd KEO Goorkhas, and holds finance and engineering qualifications. Sebastian can be contacted at: [email protected]

v

About the author

For more than a decade Sandra Kay Miller has deployed leading-edge technologies for several global organizations. She has worked for companies that range from offshore oil rigs to multinational manufacturers and her understanding of system integration and methodology has led to many writing commissions from leading industry journals. Her articles on emergent technologies, including wireless security, have appeared in such publications as IEEE Computer magazine, InfoWorld, Data Center Management (the professional journal for AFCOM) and Information Security magazine. In addition to her corporate work, she has used her technical knowledge to support the National Disaster Search Dog Foundation, for which she was recognized by Network World magazine in their 1999 You Make a Difference awards. Sandra raises goats and grapes on her farm in Newburg, Pennsylvania, USA, and currently works as a content security analyst for ICSA Labs, a division of TruSecure. Sandra can be contacted at: [email protected]

vii

Contents

Preface 1

2

3

4

5

The state of the market

xi 1

Open communication systems Virtual concepts in the wireless world What is available in the mobile market today? Key wireless technologies Wireless operating systems

3 4 4 6 20

How businesses are using mobile technology

21

Existing implementations Next-generation technology – what’s after WAP and when? Leveraging the power of wireless Case study: Wireless grocery shopping (B2C) at Safeway Case study: Tightening the supply chain (B2B) at Wesco International

23 26 29 36

Key issues and trends

41

The importance of security Security options Emerging wireless markets Bandwidth Electronic messaging trends

43 44 50 54 55

Mobile checklist

61

How will your business benefit from mobile? The right wireless solution Choosing wireless technologies Making it all work together

64 64 68 72

Implementing mobile solutions

75

Evaluating and selecting the right wireless technology Critical success factors Wireless business requirement checklist

77 78 82

38

ix

Contents

6

Mobile project management Measuring success

86 87

Using mobile to change and re-engineer the business

89

Major change opportunities with mobile Case study: CMP Media puts its applications where its mouth is Case study: Rural South African doctors implement wireless under extreme conditions Case study: Point of purchase payment at sports stadiums in the USA Case study: Carlson Hotels Worldwide wireless hospitality Case study: Wireless eBay

x

91 93 97 99 100 102

Preface

Wireless technologies are expanding at an exponential rate. Only five years ago, 0.5 per cent of the global market owned wireless devices with sales of 20 million units. That figure has grown to 9 per cent with market penetration of 400 million units. Analysts agree that by 2003 global market share could reach 20 per cent. By that time, wireless access of the internet will surpass traditional wireline connections. Because they hold so much promise for the next generation of communication, wireless technologies will play a significant role in the globalization of modern business practices. By providing a host of services – from automated delivery of competitive information to real-time access for mission-critical applications – wireless will dramatically affect the modern business model. However, ‘mobile’ and ‘wireless’ are not interchangeable terms. Wireless is only one component of the mobile concept, but it already displays considerable possibilities and some interesting uses throughout the corporate fabric. As with any emerging paradigm, wireless is a complex venture, with numerous hazards ready to trap the enterprise that moves without careful consideration. As the demand increases, so do expectations. Moving far beyond voice, wireless provides sophisticated applications such as mobile e-commerce, real-time internet access, speech recognition, biometrics and streaming audio and video audio. As a result, wireless devices require increasingly complex mobile communications and signal-processing capabilities. Consumers are demanding leading-edge functionality, longer battery life and stylish appliances with smaller footprints. Wireless today falls somewhere between total integration (with the advent of third-generation (3G) networks) and partial worldwide infrastructure. According to MobileInfo.com, ‘3G networks, when fully implemented, will move mobile technology to a new level after five years. Meanwhile, wireless applications should be implemented carefully.’ Despite its potential, wireless has generated minimum interest in the USA, with Europe at the forefront of providing the necessary next-generation infrastructure. Hybrid networks, which offer a compromise between what is available today and what will be available in the distant future with 3G, are building the bridge between old and new technologies. According to META Group, an expert technology industry analyst, ‘Mobile wireless technologies will remain in almost constant influx until 2006/7’. However, Gartner Group has predicted that up to

xi

Preface

50 per cent of business-to-customer (B2C) e-commerce transactions will be conducted through wireless by 2002. This is why it is imperative to understand how wireless applies to your business model so that your infrastructure is competent of supporting wireless as it exists today – and for the future.

xii

1 The state of the market

■

Open communication systems

■

Virtual concepts in the wireless world

■

What is available in the mobile market today?

■

Key wireless technologies

■

Wireless operating systems

3 4 4

6 20

1

The state of the market

Despite recent staff cuts at leading mobile phone manufacturers, wireless continues to grow, although not at the expansive rate predicted by many industry analysts in 2000. Development for wireless narrowband, or slow-speed internet access, progresses steadily as carriers upgrade their infrastructure. Allied Business Intelligence estimates there will be more than 1.7 billion wireless subscribers by 2006, 500 million of which will be wireless internet users. The expansion of the wireless market will in turn power the development of new cellular technologies – mobile telephones, handheld devices, operating systems, household and other appliances – as they become more integrated. The rapidly growing worldwide demand for wireless connectivity is driving the communications industry toward open systems that combine voice, data, internet and wireless applications. These open architecture communication solutions first appeared on the market in the 1980s.

OPEN COMMUNICATION SYSTEMS In the past, telecommunications equipment manufacturers produced expensive, closed systems that were separate from an organization’s data network. Clients who purchased a proprietary PBX (private branch exchange) had two choices: ■

purchase voice mail, interactive voice response (IVR) and professional services from the same vendor;

■

attempt to combine a series of applications from different manufacturers.

Combining voice, data and Internet applications was simply unheard of. Service and maintenance were expensive, and updating or expanding often meant a total system replacement. In contrast, modern wireless solutions must be open and flexible as they merge telephony, data, e-business and wireless infrastructures. Ease of expansion and the ability to add new technologies are critical in today’s internet environment. Today, many telecommunications systems manufacturers are abandoning their proprietary solutions to oblige Internet convergence. Open architectures offer fully programmable, scalable systems, capable of running mission-critical communications applications developed by the largest numbers of independent software vendors (ISVs). These applications include automatic call distributors (ACDs), voice over IP (VOIP), e-commerce, unified messaging, interactive voice response, PBX, voice mail, prepaid wireless, multimedia conferencing and other wireless applications.

3

Maximizing Strategic Opportunities

VIRTUAL CONCEPTS IN THE WIRELESS WORLD As a means to meet business goals, wireless technologies have evolved from simple communication tools to more sophisticated mechanisms for information flow. One of the challenges facing public and private organizations is to use wireless applications to enhance information access. Thus business are harnessing the computing power of wireless smart phones and handheld devices to convey more than just verbal information. Sales orders, time cards, medical information, news and weather updates, financial data – all are accessible via wireless. Early wireless applications were merely an extension to the push of information, meaning the flow was generally one way. However, emerging wireless applications are focusing more on interoperability in real time, for example complex financial transactions. A second aspect of the virtual wireless concept is its expanding accessibility. With the growth of the global economy, business people are demanding seamless wireless access from all points of the world. Wireless is opening communication and information access in remote and lesser developed locations that lack the infrastructure to support wireline-based data and voice communications. Cahners In-Stat technology research firm is forecasting that wireless users will be more inclined to rely on a single device that hosts both voice and data services instead of multiple devices offering either of the two on their own. Wireless is also poised to venture into new revenue territory. Currently, access fees make up the majority of mobile consumer revenues. However, research firm Frost & Sullivan predicts the rollouts of next-generation mobile portals will find consumers purchasing high-value content via wireless. It predicts significant growth in m-commerce (mobile commerce) and advertising by 2005.

WHAT IS AVAILABLE IN THE MOBILE MARKET TODAY? The mobile market can be divided into the following categories: hardware, applications and software, and services.

Hardware The latest mobile devices offer a range of possibilities. You can surf the mobile Internet with a full-colour WAP browser. Or add cool, animated screensavers to the display. Or chat in web-like instant messaging. And because they are trying to

4

The state of the market

create a strong personal user base, WAP phones are shipping with downloadable game packs, graphics and ringing schemes. Wireless devices are moving in two distinct directions: smaller and more powerful. WAP-enabled devices have multiple functions to provide mobile services similar to those normally accessed via a computer. A typical WAP (Wireless Application Protocol) GSM (Global System for Mobile Communications) device on the market today features a WAP mini-browser – some even with full-colour – that offers a range of subscribed services such as travel information, news updates and weather forecasts, all of which can be downloaded to the phone. Other popular features include voice-activated dialling, voice recording for saving conversations and brief notes, infra-red connectivity between the phone and a computer for faxes, e-mails and internet access, and synchronization capabilities for data storage such as calendar and phone-book applications. The phones’ LCDs (liquid crystal displays) generally support up to five lines of SMS (Short Message Service) text, and display a number of info-icons relevant to the operation of the device such as signal strength, voice mail and e-mail notifications and battery status. In addition to on-board contact information storage, WAP devices that offer SIM (Subscriber Identity Module) card integration provide even greater storage for personalized settings and information. Also extremely useful are calling features such as diverting, barring, holding, waiting, identification, missed-call indicators, user rejection, conference calling, mute and transfer services are integrated into WAP phones. Because the cost of WAP services are still considered high, charge meters, audible call timers and callcost information are becoming standard features on wireless devices. These are also security features such as voice and data encryption, manual and automatic phone lock, SIM card lock and SIM PINs, which help protect WAP devices from unauthorized access to the wireless network, as well as to the information stored on the device itself. Non-voice features on WAP devices include support of western and eastern European and middle-eastern languages (including Asian characters) for text messaging, SMS, phone-book and fax functions. There are literally hundreds of wireless phones on the market that integrate mobile information devices, making full use of the mobile internet and multimedia communication including voice, data and images. To provide access to the full spectrum of wireless platforms, these devices are being shipped with the capabilities to function with the latest in GSM technologies, such as HSCSD

5

Maximizing Strategic Opportunities

(High Speed Circuit Switched Data), GPRS (General Packet Radio Services) and triple band GSM (900/1800/1900). The latest round of wireless devices to hit the market provide internet access via both WAP and HTML (Hypertext Mark-up Language). Using a built-in Bluetooth chip, the device can also connect wirelessly with other devices.

Applications and software The current applications and software combine telephony, messaging, internet/intranet access, address book, diary and other mobile features into a single device. Applications can be synchronized with third-party applications via a computer, using a number of connection methods including Bluetooth, infra-red and physically attached proprietary cradles.

Services The major push in WAP services has led to much wider availability of development tools for WAP applications. Companies are giving them away, hoping to encourage the creation of WAP content in a variety of vertical markets. Already, WAP phones offer access to services such as booking event tickets and travel arrangements, city guides, making restaurant reservations, detailed weather reports and automatic storm warnings, traffic updates, stock market access, financial services and even interactive online entertainment sites. Wireless vendors are providing professional services to help organizations integrate wireless applications into their business models. In addition to gaining access to the rich WAP content, organizations can integrate e-mail, information search and retrieval, m-commerce, calendar and office applications, maps and position-based services, voice messaging and communication, call control and intranet/internet access into their wireless deployment.

KEY WIRELESS TECHNOLOGIES WAP The Wireless Application Protocol (WAP) is an open, global specification, giving wireless devices the ability to access easily and interact with other WAP-enabled

6

The state of the market

devices. The protocol is still being developed by the WAP Forum (http://www.wap forum.org/), a consortium of leading internet and telecom companies. WAP content is developed using Wireless Mark-up Language (WML), which makes web-enabled pages adjust to small WAP device displays. These displays require a WML-enabled browser to read the content. Currently, there are approximately 75 products on the market that optimize WAP pages for small devices with small displays. Future predictions estimate that most mobile phones and many PDAs (personal digital assistants) will be WAP-enabled by 2003. Some wireless analysts predict that WAP displays will become common in our car, on our household appliances and our watches as well. Although the limitations of the existing WAP standard have led to an intense debate about future standards for wireless, the comparisons being made are to technologies yet to be widely deployed. Currently, WAP devices are affordable and numerous devices already support the protocol. Forrester, an independent research agency, has run extensive studies on WAP, and predicts that by 2004 one-third of all Europeans – more than 219 million consumers – will regularly use WAP devices to access internet services. In a 2000 report from Forrester, 90 per cent of the e-commerce executives interviewed have concrete strategies for launching internet sites designed for mobile phones with tiny displays and slowspeed connections. The race has already begun for finding better and faster ways of sending information to WAP devices. The Global System for Mobile Communication (GSM) network currently deployed throughout Europe is a slow way of sending information. New network technologies include High Speed Circuit Switch Data (HSCSD) and General Packet Radio Service (GPRS). Both will offer faster connection speeds. By 2004 most European countries will have installed a new broadband network, called Universal Mobile Telecommunications System (UMTS). Europe, particularly northern Europe, is rich with WAP content providers. The UK leads, with the most innovative services. India and Israel come in a close second in investment dollars spent on developing new WAP applications. With only several major providers in North America, they are lagging a few years behind in wireless solutions. New York-based Cap Gemini America and Corechange Inc. of Boston both estimate that internet access via wireless devices will rise from 3 per cent to a massive 78 per cent of the American internet population by the close of 2002 (the research is based on a survey of 1,000 internet users in the USA). That equates to 72 million WAP phones sold in North America within the year, compared to a projected 45 million personal computers.

7

Maximizing Strategic Opportunities

WAP services are also gaining footholds in Australia, Russia, South America and New Zealand. The reality of WAP is that it has been making advances and gaining acceptance worldwide. The recently approved revision, Version 2.0, includes specifications for migrating the technology base to Extensible HTML (XHTML) and TCP (Transfer Control Protocol) for simplification of application delivery. Provisions are also included for streaming media, animation and colour graphics, which will all stand a better chance of being delivered sufficiently as 3G increases the throughput rate from 9.6 kbps to 14.4 kbps. Most WAP devices available today have little memory capacity. The development of new WAP services will probably press the hardware manufacturers to install better memory systems for mobile devices in the near future. Although there is some scepticism about WAP, its ability to interface wireless and wireline networks make it well entrenched for the future.

Wi-Fi (802.11b) Rapidly gaining in popularity is the wireless LAN (Local Area Network) standard 802.11b, also known as Wi-Fi. According to Cahners In-Stat, a market research firm, vendors sold just over a million 802.11b network interface cards (NIC) in 2000 and sales increased to 2.1 million in 2001, with predictions of 3.05 million by 2002 and 3.9 million by 2003. With improved silicon technology, lower prices and a high degree of interoperability, the second generation of WiFi wireless LANs are providing enterprise network capacity and speed. The IEEE 802.11b specification allows the wireless transmission of approximately 11 Mbps of raw data at distances from several dozen to several hundred metres over the 2.4 GHz unlicensed band. The distance depends on obstructions, materials and line of sight. This specification first appeared in commercial form in mid-1999, with Apple Computer’s introduction of its AirPort components, manufactured in conjunction with Lucent’s WaveLAN division (the division changed its named to Orinoco and was spun off to the newly formed Agere corporation with a variety of other Lucent assets in early 2001). 802.11b is an extension of Ethernet to wireless communication and as such is ecumenical about the kinds of data that pass over it. It is primarily used for TCP/IP,

8

The state of the market

but can also handle other forms of networking traffic, such as AppleTalk or PC file sharing standards. PCs and Macs may communicate interchangeably over 802.11b, using equipment from a variety of vendors. The client hardware is typically a PC card or a PCI card, although USB and other forms of 802.11b radios are also being introduced. Adapters for wireless devices hit the market in mid-2001. Each radio may act, depending on software, as a hub or for computer-tocomputer transmission, but it is much more common that a WLAN (wireless local area network) installation uses one or more access points, which are dedicated stand-alone hardware with typically more powerful antennae. The access point often includes routing, DHCP (Dynamic Host Configuration Protocol) server, NAT (Network Address Translation) and other features necessary for small to large business operation. Similar to an access point is a residential gateway, a new class of device, which offers similar features but without the advanced management required for corporate networks or high-traffic installations. The standard is backwards compatible to earlier specifications, known as 802.11, allowing speeds of 1, 2, 5.5 and 11 Mbps on the same transmitters. The Wireless Ethernet Compatibility Alliance (WECA) certifies its members’ equipment as conforming to the standard, and allows compliant hardware to be stamped WiFi compatible, short for Wireless Fidelity. The WiFi seal of approval is an attempt at a guarantee of compatibility between hundreds of vendors and thousands of devices. Target environments for 802.11b include airports, inside buildings (such as offices, banks, shops, arcades, hospitals, manufacturing plants and residences) and outdoor areas (such as car parks, campuses, building complexes and outdoor manufacturing facilities). Several companies currently offer paid hourly, sessionbased or unlimited monthly access via their deployed networks.

OMAP Developed by Texas Instruments (TI), the Open Multimedia Application Platform (OMAP) is an advanced architecture that can supply complex data streams such as audio, video and multifarious applications with little reduction on the device’s battery life. The OMAP environment is fully programmable, allowing OEMs (Original Equipment Manufacturers), third-party developers and wireless carriers the ability to add customized functionality and applications. Anyone can access the underlying code and a standardized interface creates ubiquity among multiple platforms. Perhaps the most important feature of OMAP is that this open-source

9

Maximizing Strategic Opportunities

environment encourages the development of appliance programming by independent application vendors, programmers and enterprises. OMAP architecture can be ported to any wireless operating system (OS) maximizing wireless broadcast audience and minimizing the development process for multiple environments. OMAP also supports Java and conquers the issue of performance degradation that is intrinsic when Java code is accelerated. Ericsson, Handspring, Nokia and Sony are all building their next generation of wireless on the OMAP architecture. Thanks to its programmability, OMAP hardware and software make it possible to upgrade existing applications and features without replacing crucial hardware. Although still in its infancy, OMAP is expected to provide rich applications, including support for MPEG4, text-to-speech, unified messaging, streaming audio and video and internet access.

i-Mode i-Mode, NTT DoCoMo’s mobile internet access system, is a brand, not a singular technology. Developed by Mari Matsunaga, who topped the list compiled by Fortune magazine as the most powerful business woman in Asia, i-Mode reported 69,164,000 users as of June 2001, with the large majority of subscribers browsing web pages and accessing e-mail on a daily basis. Currently the vast majority of i-Mode users are Japanese. Technically i-Mode is an overlay over NTT-DoCoMo’s wireless voice system. While the voice system is ‘circuit-switched’ (i.e. you need to dial up), i-Mode is packet-switched, meaning that i-Mode is always on, provided you are in an area where the i-Mode signal is accessible. There is no delay for dialling to set up the connection, but there is a delay for the data signal to reach the device. This delay is similar to the delay on a PC-based internet connection when a link is clicked. There can be additional delays due to a large size of information, or if the network is overloaded. Users can send e-mail, retrieve weather information, read sports scores, load ringing melodies into their handsets, play games, complete banking and investment transactions, purchase air tickets, download cartoons and images, and get directions. Gif and animated gif images are supported by i-Mode and some handsets have screens capable of displaying 256 colours. i-Mode uses compact HTML (cHTML), a subset of ordinary HTML (Hypertext Mark-up Language). Since cHTML is an extended subset of HTML, i-Mode

10

The state of the market

pages can be viewed with an internet browser such as Microsoft Internet Explorer or Netscape. In addition to HTML tags, there are proprietary tags (for example, informing search machines that a particular web page is an i-Mode page). i-Mode characters also include symbols for joy, kisses, love, sadness, hot spring baths, telephone, Shinkansen train, encircled numbers, etc. i-Mode handsets cannot be purchased without a DoCoMo telephone subscription, which is only possible if you are a Japanese citizen or have a residence permit and an ‘Alien Registration Card’ issued by Japan’s Ministry of Legal Affairs. Thus despite its popularity and market monopoly, i-Mode is currently limited to Japan, but plans to license to European wireless markets are in negotiation.

3G Third Generation (3G) is a global development of next-generation wireless standards and technologies based on the International Telecommunication Union’s (ITU) proposal called International Mobile Telecommunication 2000 (IMT-2000). These advances will lead to the ability to access multimedia services with wireless devices. Most 3G systems are derived from different, incompatible 2G systems like Code Division Multiple Access (CDMA), Global System for Mobile Communication (GSM) and Time Division Multiple Access (TDMA) (see Table 1.1), so the IMT-2000 standard will guarantee the interoperability and compatibility of different systems in 3G. 3G is comprised of new technologies such as General Packet Radio Service (GPRS), Enhanced Data-rate for Global Evolution (EDGE), Wideband Code Division Multiple Access (WCDMA) and Universal Mobile Telecommunications System (UMTS). Although the technology behind 3G appears complicated, 3G is predicted to have a significant impact on wireless by providing media-rich information and entertainment anywhere there is a wireless network. Broadband and packet-based, 3G can be used for the transmission of text, digitized voice, video and multimedia at data rates up to 2 Mbps in a fixed or stationary wireless environment and 384 kbps in a mobile environment. 3G will also provide consistent services to wireless users regardless of their global location. In addition to increased bandwidth, 3G will also change the fundamental ways of using wireless systems. Since 3G uses a packet-switched connection and the Internet Protocol (IP), the device is virtually always connected to the wireless network. Expanded bandwidth will allow additional services, such as video conferencing and streaming media. 3G can also provide the Virtual Home Environment (VHE) which

11

Maximizing Strategic Opportunities

would give a roaming user access to the same services available at the office, through a combination of transparent terrestrial and satellite connections. Table 1.1

System Major systems Application

The evolution of wireless systems 1G

2G

3G

Analogue

Digital

Digital

AMPS, NMT, TACS

GSM, CDMA, TDMA

WCDMA-DA, CDMA-2000

Voice

Voice and circuit-switched data

Voice and packet-switched data

Local subscribers Less than 500,000 Approximately 3.9 million Speed Properties

5 million and above

Dependent on analogue signal

9.6 kbps–14.4 kbps

384 kbps for mobile and 2 Mbps for stationary

Unstable, partial coverage, poor audio quality, unsecured

More secure, data services available, broader coverage, more stable, improved sound quality

Multimedia content, market positioning capability, internet access, always connected, advanced security

Wireless devices have been the fastest-selling communication appliances in the past 20 years. 3G technologies will extend to wireless devices with larger screens for displaying internet pages, smaller smartphones with web browsing and e-mail capabilities, videophones, wrist communicators, palmtop computers, and wireless NICs and modems for laptop computers. Innovative voice-based interfaces will allow users to control their wireless devices with voice commands, whilst biometrics will provide increased security for appliances. Industry analysts indicate there will be up to three types of technology deployed in 3G. These systems are being synchronized to guarantee that they are compatible with multimode handsets. This level of integration will give users worldwide roaming capability, regardless of their wireless devices. 3G has the potential to increase substantially data transmission rates from i-Mode’s 9,600 bps to a maximum target of 2 Mbps in the future, thus changing the character of wireless. Unfortunately, not all these new technologies will become available on a global basis immediately. Whilst 3G is the wireless ideal, its impact is to date mainly in the Japanese wireless markets, although Europe and North America are expected to follow suit.

12

The state of the market

Bluetooth Bluetooth is a new standard launched in May 1998 which utilizes a short-range radio link to exchange information, providing wireless connectivity between mobile phones, mobile PCs, handheld computers and other peripherals. Bluetooth currently competes with WiFi for wireless networking market. The first commercial appliances to use Bluetooth – a USB connector and PCMCIA LAN card – were launched in 2000 by TDK. The aim is to replace the IrDA spec of infra-red in wireless devices. Over 2,000 vendors and developers are currently registered with the Bluetooth Special Interest Group (SIG), which was founded in 1998 by Ericsson, IBM, Intel, Nokia and Toshiba. Products integrating Bluetooth technology must be approved and pass stringent interoperability testing by SIG. Two major current limitations of Bluetooth mobility and roaming capabilities are that communication between devices must be direct, so it is therefore limited by the quality of the radio channel between them. Second, Bluetooth does not support the movement of wireless devices connected in an ad hoc network, called a piconet, to another. A device in a piconet cannot communicate with another Bluetooth device in a different piconet. To avoid the problem of interfering with other systems, Bluetooth devices send out very weak signals of 1 mW. By comparison, the most powerful cellphones can transmit a signal of 3 W. The low power restricts the range of a Bluetooth device to about 10 metres, lessening the chances of interference between other appliances such as computer systems, portable telephones, televisions and radios. Even with the low power, walls will not degrade a Bluetooth signal, making the new standard useful for controlling several devices located in various areas throughout a building. Frequency interference between multiple Bluetooth devices in close proximity is prevented by a technique called spread-spectrum frequency hopping. Using this technique, a device will utilize 79 individual randomly chosen frequencies within a designated range, modulating from one to another regularly. The transmitters change frequencies 1,600 times every second, so that more devices can make full use of a limited share of the radio spectrum. Because every Bluetooth transmitter automatically uses spread-spectrum transmitting, it is unlikely that two transmitters will be on the same frequency at the same time. This same technique minimizes the possibility that other portable devices, such as cordless phones or baby monitors, will interrupt Bluetooth devices, since any interference on a particular frequency will last only a fraction of a second. When new Bluetooth-enabled devices come within range of one another, an electronic handshake will take place to determine whether they have data to share

13

Maximizing Strategic Opportunities

or if one device needs to control the other. This handshake is invisible to the user of the devices. After the handshake has occurred, the devices form a piconet or Personal Area Network (PAN). Once a piconet is established, the devices randomly change frequencies in unison so that they stay in touch with one another and avoid other piconets that may be operating in the same room. Bluetooth has been licensed to a number of top-tier technology vendors. Microsoft plans to include native support of Bluetooth in its Windows operating systems. Palm OS and Linux are also deploying the technology in their new developments. As for the Standard’s less-than-standard name, Harald Bluetooth was king of Denmark around the turn of the last millennium. Under his reign, he united Denmark and part of Norway into a single kingdom and then introduced Christianity into Denmark. Choosing this name for the standard indicates how important companies from the Baltic region (nations including Denmark, Sweden, Norway and Finland) are to the communications industry, even though the name does not describe how the technology works.

GSM Global System for Mobile Communication (GSM) is an open system that is constantly evolving to maintain standards of changing wireless. First introduced in 1991, it uses Time Division Multiple Access (TDMA), which allows eight simultaneous calls on the same frequency. International roaming capability is its prodigious asset. With standardized connectivity in more than 170 countries and extended roaming capabilities via satellite coverage, GSM provides the greatest area of coverage for seamless wireless services. GSM has become the de facto standard in Europe and Asia. GSM is technically distinctive from first-generation wireless systems in that it uses digital technology and time division multiple access transmission methods. Voice is digitally encoded via a unique encoder, which emulates human speech. This method of transmission creates a very efficient data rate/information content ratio. With the introduction of the cellular cassette – an accessory to a satellite wireless device – dual band operability is available. By accessing dual band capability the GSM network infrastructure and handsets are able to operate across two frequency bands. The device can be set to either mode, or to automatic mode, which makes it search for the GSM network first. If that is not available, it will automatically

14

The state of the market

switch to the satellite network. The dual band GSM network infrastructure and dual-band capable handsets were introduced by Motorola in 1997, with the first dual band 900/1,800 MHz European networks implemented the same year. High bandwidth services are already available through 2G technologies, but as GSM evolves towards 3G, the possibilities of even more sophisticated data and multimedia applications are opening up to the business community. As the GSM standard continue to develop, wireless will be able to offer greatly expanded services. These will include high-speed, multimedia data services, inbuilt support for parallel use of such services and seamless integration with the internet and wireline networks. Enhanced Data-rate for Global Evolution (EDGE) is currently being standardized within the European Telecommunications Standards Institute (ETSI). EDGE represents the next level of data communications within the GSM standard. With a new modulation schema enabling data-throughput speeds of up to 384 kbps, and using existing GSM infrastructure, EDGE could offer an alternative route for GSM operators who do not have 3G licences. From its inception, GSM has been designed with rigorous levels of security. With constantly enhanced transmission protocols and algorithms added to the flexible and future-proof platform, GSM is currently the most secure public wireless standard worldwide. Customized Applications for Mobile Networks Enhanced Logic (CAMEL) is a GSM feature including Intelligent Network functionality. CAMEL is invoked when roaming between networks, allowing the base network to monitor and control calls made by users. Possible applications include pre-paid roaming services, fraud control, voice mail and closed user groups (for example, office extension numbers that work everywhere). CAMEL is being standardized in three phases; the first of these is in current deployment. Based in Dublin, Ireland and London, UK, the GSM Association acts on behalf of the interests of more than 490 GSM, satellite and 3G operators, key manufacturers and suppliers to the GSM industry, as well as regulatory and administrative bodies from more than 159 countries and global regions. The GSM Association maintains the continued preservation of open standards and interoperability. The cooperation between global operators is most impressively clarified by the successful deployment of international roaming. The Association’s foremost priority is the advancement and promotion of the GSM standard worldwide.

15

Maximizing Strategic Opportunities

GPRS General Packet Radio Service (GPRS), sometimes referred to as ‘2.5G’ and the precursor to 3G, has rapidly gained the support of wireless proponents, but many of them are openly questioning whether it will ever actually come to pass. GPRS is now at least four years away and even wireless telecommunications companies are being modest about specifically what applications will run across their infrastructure or even how they will manage to find the investment capital to build it. With the down-turn of the global economy, GPRS handsets have been presented in modest numbers, although test network rollouts are slowly starting to piece together sporadic coverage areas. ‘A year ago, operators were saying it would deliver 100 kbps. That is not a fact’, says wireless technology analyst Maged Fahmy of the Aberdeen Group. Fahmy also is cautious about the likely availability of global roaming services. According to his estimates, early users will be fortunate to see much more than 20 kbps. Tom Black, CEO of Idetica, agrees. His company – a customer relations management consultancy – has been testing client applications using British Telecom’s Cellnet network for several months, and has found 20 kbps to be the limit of the available services. According to his findings, ‘I’m pessimistic that we’ll be looking at 3G services in shorter than four to five years from now’. The crux of the difficulty is that telecom companies traditionally are experienced with circuit switched data, but G3 relies on packet-switched data. Upgrading a circuit-switched GSM network to GPRS is a relatively inexpensive, but highly complex process that includes adding new packet-switching stations to the network, upgrading software and overlaying the data transport on the existing GSM network. Ali Pourtaheri, CEO of wireless data card startup Ubinetics, advises ‘Networks have a long way to go to be optimized for packet [GPRS] data’. As a vendor for GPRS and UMTS test equipment, Ubinetics found that in recent laboratory tests files were taking much longer to download on GPRS than using conventional GSM. And that was only the tip of the iceberg. Interoperability issues between the handsets and the infrastructure also arose, partly because testing criteria and certification programs have not yet been fully developed. The latter, in particular, is the type of technical concern that has the potential to delay commercial rollout. Packet switching on radio networks is nothing new. However, until the introduction of GPRS it has been used primarily for low-bandwidth applications such as vehicle location systems. Most experts acknowledge that getting GPRS beyond 40 kbps in its first release will be a significant technical challenge.

16

The state of the market

Remaining optimistic, Idetica’s Black points out that the ‘always on’ nature of GPRS changes the fundamentals of the service. Networks can now charge for the amount of data transmitted rather than, as with GSM, for the time spent on a call. Fahmy estimates that GPRS will have a duration of only 18 months; being rapidly succeeded by an advanced packet-switching technology with enhanced data-rates for GSM evolution (EDGE), which will offer up to 384 kbps throughput. ‘GPRS is the foundation. Everything that comes after this is just an increase in bandwidth’, comments Fahmy. The change from GSM to GPRS is more marked than the change from GPRS to UMTS, because the latter shares the same underlying technology. However, whilst GPRS and UMTS might have similar technologies, UMTS requires more investment, including a doubling of base station capacity to handle increased volumes of data. In the current tight economy Black suggests, ‘Let’s run with GPRS and see which applications take off. When we understand what the market acceptance will be, then we will be able to invest in UMTS.’

UMTS Universal Mobile Telecommunications System (UMTS) is a part of the International Telecommunications Union’s IMT-2000 ideal of international 3G communications systems. The UMTS Forum predicts this technology will have a crucial role in creating a future mass market for high-quality wireless multimedia communications and is expected to approach 2 billion users worldwide by the year 2010. Designed to provide low-cost, high-capacity wireless services offering data rates up to 2 Mbps with worldwide roaming and other advanced capabilities, UMTS is expected to hasten convergence between telecommunications, IT, media and content industries. It was launched commercially in Europe in 2001, and experimental systems and global field trials are currently taking place with primary vendors. UMTS is built on substantial investments in 2G wireless technologies, and has the collaboration of several hundred network operators, manufacturers and equipment vendors worldwide. As one of the major new 3G mobile communications systems, it is being developed within the framework that has been defined by the ITU and known as IMT-2000. Representing a unique opportunity to administer a global market for highly personalized wireless, UMTS has gained the support of many major

17

Maximizing Strategic Opportunities

telecommunications operators and manufacturers. By delivering pictures, graphics, video communications and other wide-band information, as well as voice and data on demand anywhere in the world, UMTS will build on and extend the capability of modern wireless by providing increased capacity, data capability and a better selection of services. However, the successful deployment of UMTS will demand harnessing emerging technologies, creating new strategic partnerships and addressing many commercial and regulatory issues. UMTS devices will be able to send and receive speech, text, music, graphics and data. The network will serve as an information thoroughfare, giving access to a range of internet protocol-based services. It will interconnect with the Public Switched Telephone Network (PSTN) and may eventually replace it. Certainly, UMTS marks the beginning of the end for fixed telecommunications. No more digging up streets and hanging wires from poles for signal transmissions. Communication devices will become more personalized and unified with not only voice calls but also the ability to send and receive fax and e-mail messages anywhere in the world, to access the internet and to download or transmit data packages without having to seek out a wireline network connection. For UMTS to become a reality and to achieve the objective of seamless worldwide wireless coverage, a high degree of standardization is essential. The European Telecommunications Standards Institute (ETSI) is responsible for preparing the open standard for Europe; however, that standard will be offered to the International Telecommunications Union (ITU) only as one option for the worldwide system. Additional standards are being organized in North America and Japan, which will also be put forward as options to the ITU. Despite UMTS being a European operation, it is intended as an element of the worldwide IMT-2000 concept. A wireless UMTS device will some day be capable of functioning anywhere in the world, regardless of the user’s location and contractual service provider. Access to a range of broadband services will be available wherever the device is used. The device will be a fully mobile wide-band network termination point, to which the user may connect assorted network peripherals, including personal computers, scanners and printers. Using a wireless phone and a portable computer, access to data services and the internet will become possible anywhere in the world, even on the move. The core network will be similar to the internet, that is, as an information highway that carries data on behalf of others. Data may be publicly accessible or it may be restricted to a defined group of users, forming a private network, or confined to a single pair engaged in a telephone call.

18

The state of the market

Basic UMTS devices will be small and inexpensive. However, even for voice-only services the devices will still require complex engineering. The operational requirement for seamless functioning means that they will need to support both terrestrial and satellite elements of UMTS networks, as well as providing full roaming on the GSM networks from which UMTS will probably progress. UMTS devices will need to be dual band/dual mode hybrids, automatically switching as they move from one area of coverage to another. More sophisticated prototypes have shown video-capable units that will allow high-speed downloading of cinema films, which can then be viewed on its small in-built screen. With internet access at 2 Mbps, e-mail, files, graphics and images will be effortless. Even on the move, when data rates are expected to drop to about 140 kbps, video-conferencing will still be possible. Some UMTS device accessories will be embedded in consumer products and will be practically invisible to the user. Bluetooth technology has the capacity to allow data transfer to and from appliances with these types of output, which are then relayed to another wireless device. Although the potential applications appear to be planned with little input from end users, there is no doubt that the broadband UMTS services offer great promise for consumer as well as business users, especially if start-up costs can be shouldered by the business sector. Basic UMTS devices may be cheap when manufactured in mass quantity; however, it does not follow that UMTS services will not be expensive. The capital expenditures of providing a UMTS infrastructure, as distinct from a slightly upgraded GSM infrastructure, will be massive. Consequently, mainstream deployment will be dictated by the potential for a return on the initial investment. The early broadband coverage is therefore likely to be in major cities and business centres and along travel routes frequented by business users. Experience has shown that billing for telecommunications services is based upon a combination of time and bandwidth, with distance being a secondary factor; therefore it is anticipated that ‘bandwidth on demand’ services like UMTS will be costly for any wide-band elements in the beginning. Eventually, this will be compensated by lower time charges when downloading data. For users who need mobility, UMTS will be particularly appealing. Certainly, UMTS illustrates very clearly that there is only one objective, which is to design and deploy a global system.

19

Maximizing Strategic Opportunities

WIRELESS OPERATING SYSTEMS Symbian’s EPOC Nokia, Ericsson, Motorola and Psion Software formed Symbian to develop EPOC, the software and hardware standards for wireless smart phones and terminals. EPOC is now incorporated into palmtop PDAs such as the Psion Series 5. The success of Symbian will depend on the ability of the initial partners to license EPOC to other handheld vendors. Sony, Sun, Philips and NTT DoCoMo have already joined the alliance and licensed EPOC.

Microsoft’s Pocket PC This wireless operating system is used in several kinds of devices such as palmsized PCs, book-sized PCs with integrated keyboards, sub-notebooks and industrial terminals. Casio, Philips, Compaq, Sharp, Everex and Hewlett-Packard have devices running on Pocket PC OS.

Palm Computing’s Palm OS More than three-quarters of the world market for handhelds is covered by Palm devices. Major Palm partners include IBM with WorkPad PC companion, Symbol with a barcode-enabled Palm device, Handspring (a Palm clone), OmniSky and Nokia.

20

2 How businesses are using mobile technology

■

Existing implementations

■

Next-generation technology – what’s after WAP and when? 26

■

Leveraging the power of wireless

■

Case study: Wireless grocery shopping (B2C) at Safeway 36

■

Case study: Tightening the supply chain (B2B) at Wesco International 38

23

29

21

How businesses are using mobile technology

EXISTING IMPLEMENTATIONS You don’t have to look far to witness a wide variety of wireless installations throughout business as well as society in general. Deployments include large-scale organization wireless solutions (surfacing from mobile maintenance and repair companies) to the medical and law enforcement communities. Although many organizations are holding out for the promises of 3G networks, pioneers are reaping the benefits of increased efficiencies that are saving time, money and improving their overall communication-data exchange model. The advantages are tangibly measured by increased customer service and satisfaction.

Always on the move The mobile workforce has led the way in pushing existing technologies to the limit and breaking new ground in wireless applications. By turning to wireless solutions, mobile employees can remain just that – mobile. Charles Lukaszewski, CEO of Ubiquio, an outsourcing agent that manages fleets of mobile computing devices for business customers throughout North America, explains the advantages of mobility. ‘Keeping a field service person out in the field’ is one of their largest requests from their customers. ‘There’s a real quick return on investment in terms of the time they’re actually spending on site and maybe even more important, being able to eliminate trips to the office,’ says Lukaszewski. Utility providers are installing wireless monitoring devices in the vast systems that service millions of electric, natural gas and water customers. Northeast Utilities, which provides power and gas to 2 million customers throughout Connecticut, New Hampshire and Massachusetts in the USA, has begun monitoring its gas and electric networks via WAP phones. Wireless communications are empowering managers to make faster, more informed decisions during natural disasters, such as storms, that interrupt service to thousands of customers in a singular area. Before the implementation of Northeast Utilities’ wireless solution, about 50 of the utility company’s managers would have to place telephone calls or log into the Northeast Utilities’ servers via computer to evaluate the scope of the service interruption. Now that Northeast Utilities has installed a WAP interface on its existing server, managers can access the needed information via a WAP device that enables them to ascertain the exact number of customers who have lost services. This availability of information has paid off significantly by the reduction of on-call and dispatched field service personnel, which during an emergency can cost as much as $40,000 an hour.

23

Maximizing Strategic Opportunities

Financial services gains In the lightning-paced world of financial information and transactions, wireless is fast becoming the delivery tool of choice (see Fig. 2.1). Global financial giants such as Credit Suisse have already developed online trading applications for WAP devices. Scandinavian bank MeritaNordbanken is in the testing phase of mobile applications, whilst several large banks in the USA are on the verge of publicly implementing full wireless transaction ability for their customers.

Wireless financial service users 1999–2004

Fig. 2.1

80

Millions of users

60

40

20

0

1999

2000 Europe

2001 Asia

2002

2003

2004

North America

Source: Celent Communications

Security has become the main issue with wireless applications in the financial industry. As Iain Gillott, an analyst with the International Data Corporation contends, ‘Wireless needs to get to a level of security equivalent to the traditional markets’.

The doctor is in Healthcare professionals are embracing advances in mobile technology, despite the valid concerns of patient information privacy. Because WAP devices do not yet

24

How businesses are using mobile technology

have sufficient end-to-end security, wireless security vendors are offering proprietary solutions to enable the medical community to harness the power of wireless devices and applications. When research firm, Harris Interactive surveyed medical professionals about what type of applications they would be most likely to use in their practices, their responses showed that they were more interested in instant access to medical records and taking notes, rather than standard content such as medical and pharmaceutical information (see Fig. 2.2). With such trends emerging, wireless is poised to take on a more active role in the medical community than just a platform for instant access to content. Professionals want real-time access to individual records, prompting medical enterprises to integrate wireless applications into their existing architectures.

Fig. 2.2

Wireless in medicine

Authorized referrals Pharmaceutical information Trusted protocols

Access to lab results and medical records

Clinical content Recording billing codes Generating notes

Source: Harris Interactive

Currently, approximately 5 per cent of the doctors in the USA are using wireless devices to write prescriptions. More than 20 companies offer wireless electronic prescription technologies. Industry researchers expect the wireless adoption rates in the medical community to increase significantly in the next few years, anticipating that 20 per cent of physicians in the USA alone will be using wireless devices to record their daily transactions and information by 2004.

25

Maximizing Strategic Opportunities

The primary goal of wireless devices in the medical realm is to simplify the repetitive administrative tasks that reduce the time that healthcare professionals can spend with the patients. Companies providing wireless medical solutions are targeting individual doctors, rather than hospitals, which tend to be more conservative in their technology deployments. ‘Physicians are the ones driving this field. They know the technology and they know how it can help them,’ says Andrew T. Jay, director of medical technology research for First Union Securities.

NEXT-GENERATION TECHNOLOGY – WHAT’S AFTER WAP AND WHEN? SDR Software-defined radio (SDR) is the newest idea on the table at next-generation technology forums. Hoping to amalgamate the entire wireless industry, SDR wants to create a world in which all standards work together. Over 100 major wireless vendors jumped on the SDR Forum’s bandwagon in a record four months. Businesses are already visualizing how software-driven phones will dispense multi-architecture roaming and multimedia services. The hype for this emerging initiative is being backed by wireless leaders such as Sprint PCS, Cingular Wireless, NTT DoCoMo, Lucent, Nortel, Motorola and Nokia. Even the FCC (Federal Communications Commission) commissioner Susan Ness made the rather liberal comment that ‘Software-defined radio has the potential to bring science fiction to life’. SDR is already crudely deployed in dual mode analogue/digital phones, where it functions as a migratory between the analogue and digital modes. The next step in the wireless game is to use SDR to integrate 3G network topologies, such as switching between GSM and CDMA. Today, that type of switching feature on wireless phones requires extensive processing power. And a radio frequency processor powerful enough to handle all the changes between standards will need to be much more powerful than wireless devices currently on the market. Looking ahead for SDR, the closest application for this emerging technology will serve as a configurable platform for wireless devices that, for example, can operate in WAP, i-Mode and MP3 functions. Bringing a healthy dose of reality to the SDR table, Herschel Shosteck, a veteran wireless analyst, states the obvious: ‘It’s going to be a very tricky thing for the

26

How businesses are using mobile technology

antennas to do because of the different frequencies’. A study by MIT for the SDR Forum predicts global SDR-enabled appliances active in the market to be 9.5 million in 2000 and rising to 130 million or more by 2005. However, Shosteck does not see the technology even becoming commercially viable until 2005 and integrated until 2010.

The next best thing Wideband Code Division Multiple Access (WCDMA) has become the nextgeneration wireless access technology chosen by the European Telecommunications Standard Institute (ETSI) to facilitate 3G broadband multimedia services over wireless networks. Touted as the technology of the future, WCDMA requires minimal investments in existing 2G and 2.5G networks and can be easily integrated into existing infrastructure. Since it makes extremely effective use of radio spectrum, WCDMA can be deployed on to existing GSM networks by reusing a large portion of GSM sites and equipment. By adding new transceivers and installing software upgrades for the WCDMA air interface, operators can maintain high-speed transfer rates and expanded voice communications. WCDMA will be able to raise speeds up to 2 Mbps in local access areas and almost 400 Mbps while on the go. As high speed applications require more bandwidth, a 5 MHz carrier has been selected for WCDMA – the present 2G networks use a 1.25 MHz carrier.

Mobile Java Mobile Java is another technology that has appeared on the horizon of wireless technology. It would allow an application to work on a wireless handset, whether or not there was an active connection to a wireless services provider’s network. Mobile Java provides the capability to work on an application in the handset. The application would be executed when the mobile device accessed a network signal. This would mean that losing your connection would not mean the end of the application, such as a data transfer or m-commerce transaction. Motorola was the first to guarantee mobile Java by supporting Sun Microsystems’ Java technology in all its wireless products by 2002. Because of this strong support, wireless vendors have began to unleash their versions of Java-enabled

27

Maximizing Strategic Opportunities

phones. Nokia plans to deliver 50 million Java-supported devices by the end of 2002 and 100 million in 2003. The reason for the Java hype in wireless devices is due to Sun Micro’s Java 2 Platform Micro Edition (J2ME), an open wireless technology popular among developers of wireless devices. The J2ME technology includes a Mobile Information Device (MID) profile that will let vendors of mobile device download new applications and services for their products instead of rolling out costly hardware upgrades. Java phones offer a plethora of internet applications for m-commerce, entertainment and communications, including gaming, streaming video, e-commerce, voice and text-messaging services, and speech and handwriting recognition. Therefore, Java will be in a strong position to address mobile compatibility challenges such as interface standardization, streaming videos, mobile tele-conferencing and games, compared to WAP. J2ME’s ability to assimilate a WAP browser would reduce WAP’s position in the wireless market for lower bandwidth applications. Java will provide a multitude of benefits to carriers, developers, manufacturers and consumers in the wireless world. Deployment of J2ME technology on a vast variety of devices, independent of networks, platforms and handsets would increase compatibility and augment the opportunity for wireless services to ERP (enterprise resource planning) systems, collaboration, instant messaging and e-CRM (e-customer relations management) solutions. In Europe, Sony Europe and Sun Micro announced an agreement to develop mobile phones based on J2ME technology, and will begin shipping the devices in Europe by the end of 2001. One 2 One, the UK mobile operator, is planning on providing financial and entertainment services based on the J2ME platform. LG TeleCom, in conjunction with Sun Microsystems, is developing services based on the J2ME platform. LG Telecom’s handsets will offer interactive games, online banking and stock trading. As the demand for Java-enabled handsets grows, so will the ability to run personalized services and interactive applications. The software market for wireless devices is also facing numerous confrontations. Kada Systems claims its mobile platform is faster and allows more memory (in RAM) compared to J2ME. Qualcomm has its Binary Runtime Environment for Wireless (BREW) but it will only operate with CDMA networks. For added market share, companies such as RIM and Palm are developing J2ME applications in addition to their own platforms.

28

How businesses are using mobile technology

LEVERAGING THE POWER OF WIRELESS Branding over WAP Wireless presents a whole new world for marketing and service providers to target consumers in a more direct and personal way than ever before. Mobile phones let companies broaden their brand’s reach and communicate with consumers in a way that can be more spontaneous, interactive, personalized and targeted. However, using WAP and SMS for advertising can also pose the risk of brand over-exposure. For wireless campaigns to be successful, they will have to provide specific, short-term offers and promotions instead of the annoyances of repetitive content. Repeated marketing studies have shown that consumers will respond to the offerings if the brand continues to provide value and interest. So far, WAP-based advertising has been crude and thus, unsatisfactory. Displaying logos and eye-catching advertisements on the tiny monochrome displays does not offer the branding experience conveyed through other mediums such as television and the internet. In addition to branding, WAP is currently being used by a number of companies as an additional customer service enhancement for convenience and personalized service. For example, WAP is extremely useful for tracking services. A consumer can track their shipment or order with the courier using a WAP device. Thus WAP provides additional service and support to current customers rather than a lure for new customers. Most marketers and advertisers are now opting in favour of SMS (over WAP). With 1 billion messages being sent per day, SMS has gained enough popularity to make it a viable advertising medium. Simple and inexpensive to implement, SMS has already proved to be an effective way of marketing and advertising. SMS’s store-and-forward capabilities provide a rich medium for the viral marketing concept. Currently, SMS is the delivery method of choice for wireless devices; however, as next-generation networks and devices come to market, the progression will move towards WAP. With over a billion global subscribers, wireless will certainly provide the next massive marketing platform. However, since WAP is still being developed, its current value is as yet very limited.

29

Maximizing Strategic Opportunities

Online gaming and games without payout Wireless carriers and WAP content providers are banking on the idle time spent by wireless users. They are betting on the desire for entertainment and competition that is part of human nature. However, wireless gaming models are not a game to industry giants Ericsson, Motorola, Nokia and the Siemens Information and Communication Mobile Group (IC Mobile) who have formed the Mobile Games Interoperability (MGI) Forum. This is serious business. Indeed, Datamonitor, a market research company, forecasts that wireless gaming stands to become the highest revenue generator in m-commerce, growing to 200 million users worldwide and 36 per cent of wireless earnings by 2005 (see Fig. 2.3).

Fig. 2.3

Projected mobile gaming revenues worldwide

$6 $5

Billions

$4 $3 $2 $1 $0 2002

2003

2004

2005

Source: Datamonitor

The MGI Forum, formerly known as the Universal Mobile Games Platform Initiative, is in the process of implementing global standards so that users could play games across multiple servers, on wireless networks and on different mobile devices. Ilkka Raiskinen, vice-president of Mobile Applications and Services, Nokia Mobile Phones, hopes innovators and veterans alike will take part in the Forum:

30

How businesses are using mobile technology

A membership in the MGI Forum is in line with our policy to support open standards and represents our latest effort in promoting an open approach to the mobile games market. We see this forum as playing a central role in setting up 3G game services.

Similarly, Jan Lindgren, vice-president of Ericsson Internet Applications has said:

We believe that offering compelling mobile games will act as an effective catalyst for the mobile internet market as a whole, so we are convinced that operators, as well as the game developing community, will benefit greatly from this initiative. Our aim is to promote an open approach to the mobile games market by supporting current and future standards and by collaborating with all interested industry players. This co-operative approach clearly demonstrates Ericsson’s strategy of supporting network operators wherever and whenever we can.

Again, according to Tim Krauskopf, vice-president and general manager of Core Solutions for Motorola’s Internet Software and Content Group:

We’re seeing that developers of mobile games are resorting to writing their own platforms or having to multiply the efforts to support many platforms. As a result, costs are increasing and distribution options are limited. As an industry we need to provide an integrated development environment that unites mobile networks, devices and game servers as a mass market games console.

Thorsten Heins, president of solutions within the Siemens Information and Communication Mobile Group, agrees:

One of the Siemens IC Mobile objectives is to make it possible for users in Tokyo to sit and play a multi-player game with some friends in Washington and Munich at the same time, on different networks and platforms, with various models of mobile phones.

31

Maximizing Strategic Opportunities

In addition to setting new development standards, current platforms are being implemented in wireless gaming. Mobile Java has entered the gaming market in a big way – companies like Sega stand to benefit the most, since Motorola’s Java phone will be able to run games from Sega. Nokia, Ericsson and Siemens are also collaborating with Sega to offer games in their Java phones. John Brimacombe, a Cambridge University graduate with master’s degrees in both computer science and law, is the CEO and co-founder of the UK-based nGame. Formed in 1999, nGame now has 500,000 subscribers who pay per minute to play wireless multiplayer games such as Alien Fish Exchange, Top Gun and Chop Suey Kung Fu. These types of games allow players to engage for either minutes or hours, log off and then return to exactly where they left off. nGames are available for play over wireless devices, the internet and interactive TV, thus expanding the user base to a wider audience. Brimacombe believes that wireless gaming has the potential to envelop the online gaming industry, despite early issues with carrier billing models and pricing. ‘At the moment, we [nGame] have a billing system that is enormously crude – we’ll charge you by the minute for access to data, and it doesn’t matter whether that minute was a vital stock alert or a random bit of crap,’ Brimacombe told journalist Wendy Grossman in a June 2001 interview. He advocated a new billing model for wireless content, citing Spanish carrier Telefonica Moviles’ new billing system that charges a minimal fee for data services, but lets content providers trigger added charges for specific content. Currently, there are four major types of wireless gaming billing models used by carriers and content providers. ■

Content quality charges are dependent on the type of content users access – more complex games are more expensive. Carriers and portals split the revenues with the game developers.

■

Flat fees are paid by users to play games provided by carriers or portals.

■

Time-based games are charged according to the amount of time involved with the game itself. For example, a simple card game would be less expensive than a time-intensive role playing game.

■

Usage-based games charge per minutes used. Per minute revenues are shared between the game developer and carrier or portal.

The demographic profile for online gaming, once thought to be primarily the youth market, is surprisingly across the board. Alex Green, nGame’s vicepresident of business development explains the diversity of wireless gamers, especially the 30-somethings: ‘There’s a large WAP audience out there currently

32

How businesses are using mobile technology

that grew up playing games on the early PC and 8-bit computers’. For these people, wireless gaming seems a natural evolution. Encouraged by the popularity of online gaming, online gambling companies are betting that the deployment of 3G networks will increase the potential for wireless wagering. The main hurdle for wireless gambling today is the lack of high-speed wireless infrastructure. WAP devices are unpopular because of their slow speeds and uninteresting interfaces; despite this, companies are adding wireless solutions to their regular betting avenues such as booking clubs and via the internet. Nextgeneration technologies such as GPRS and full-colour handsets will improve the wireless betting experience, but deployment and significant consumer adoption of these technologies are not forecast until 2003.

Payment via mobile Nobody – and I mean nobody – likes to take time to sit down and pay bills. But if I could take the wasted time when I’m on a bus, on a plane, or waiting in line at the post office and use it to zip quickly through my bills then zap off instruction on what to pay and when and how, that would be a real time-saver.

So says Andy Bartel, senior researcher for electronic commerce at Giga Information Group. Electronic Bill Presentation and Payment (EBPP) will provide the next wave of financial convenience for consumers. EBPP is equally attractive to those offering the service as well as the customers. Moving from paper to electronic billing will significantly save money. According to a recent study conducted by eDocs magazine, the processing costs per transaction using paper varies from $0.75 to $1.50, compared to electronic billing individual transaction costs of $0.25 to $0.45. Although significant saving can be seen in the raw numbers, for a large organization the cost of updating an electronic billing system can be several million dollars. Taking this into account, Bank of America, the largest bank in North America, gave the green light to its wireless testing project in several major cities throughout the USA. Processing over a billion dollars of electronic

33

Maximizing Strategic Opportunities

transactions each month, Bank of America believes that by offering wireless services it will give its customers another outlet with which to do business, as well as providing significant cost savings once the technology is in place. The success of ATMs (automatic teller machines) and online banking has led financial institutions to conclude that their customers want the type of convenience that wireless technologies can offer. Another significant market for wireless payment is point-of-sale transactions such as the wireless-enabled vending machine. Research firm ARC Group expects market penetration rates of wireless-enabled vending machines to rise from 4 per cent in 2001 to 38 per cent by 2006. Wireless network operators are anticipating revenues of $3 billion from vending data traffic alone. There are two key features that will make wireless vending successful – wireless telemetry and cashless payment. Gone will be the days of hunting for spare change for the drinks machine. Machine operators will not have to worry about cash-related issues such as theft, vandalism, jammed coin mechanisms, counterfeit coins and currency changes. Despite numerous payment options such as credit/debit cards and smart cards, ARC Group predicts wireless handsets will succeed as the major cashless payment device and lead to the adoption of wireless vending. According to ARC Group analyst Ifeoma Nwoyeocha:

It will be possible to track exactly what has been sold from each machine, thus reducing the number of unnecessary visits and increasing efficiency through improved product profiling. It will be possible to track exactly which products are selling well in particular areas at particular times of day. Decisions based on real-time data will enhance the customer experience because products need never be out of stock.

Mobile and GPS Wireless handsets with GPS (Global Positioning System) capability have already reached the market. These units include the technology for location-based services like driving directions, traffic services and locating and planning for local entertainment. Melding GPS and wireless handhelds, vendors have targeted mobile consumer audiences such as outdoor sport enthusiasts and businesses with a mobile workforce.

34

How businesses are using mobile technology

Niche applications have begun to spring up, offering tracking services for both people and goods. For example, GPS devices installed in vehicles can determine their exact position, speed and direction, in real time or at set intervals. Together with proprietary software and advanced digital road maps of the entire country, users are provided with extraordinary information about their vehicles. Organizations that need to manage a highly mobile workforce, such as delivery services, field technicians and sales departments, can track, update and assign new orders in real time. Other fledgling companies such as Digital Angel and Wherify are investigating a wide range of potential applications for combined GPS and wireless-handheld technologies, including monitoring the location and medical condition of at-risk patients, locating lost or missing individuals, locating missing or stolen household pets, managing livestock and other farm-related animals, pinpointing the location of valuable stolen property, managing the commodity supply chain, preventing the unauthorized use of firearms and providing a tamper-proof means of identification for enhanced e-commerce security. But the marriage of wireless handhelds and GPS technologies is creating the biggest buzz in advertising. ‘It’s a bit of a marketer’s wet dream’, says Kyle Shannon, co-founder of Agency.com, an internet marketing consulting firm. Shannon explains the concept: ‘Someone who uses a [wireless] data network is going to respond to an ad that gives him a coupon to buy a Coke from a machine as he walks by it’. Vindigo, a wireless personal navigation service available in both London and major cities in the USA, has launched plans for GPS-based advertising. The company provides city guide information to handheld devices, including tips on restaurants and entertainment. GPS signals will be able to point potential diners to eateries within a certain radius of their signal. That type of pinpoint marketing is key to the promise of wireless advertising. But it’s also what makes it rather disturbing from a consumer’s view. ‘One end of the scenario is that as you’re walking down the block, your phone goes off as you pass every store and tells you that there’s a 50percent-off sale’, says Bruce Mello, vice-president of wireless and emerging media at 24/7, a global provider of end-to-end advertising and marketing solutions. ‘For me, by the end of that one block I might be breaking my phone.’ Mello is not the only one voicing concerns about this type of invasive marketing. Mobile-phone service providers such as AT&T are cautious of advertisers’ access to their networks. If consumers are wary of having advertisers track their every move, geographically targeted advertising may not be the most promising way to

35

Maximizing Strategic Opportunities

pump up the wireless market. Still, advertisers are willing to at least give it a try. With the introduction of WAP, companies can now distribute internet-ready information to wireless devices equipped to receive it. However, the industry still lacks a standard way to distribute advertisements across all devices in a single shot.

Case study

Wireless grocery shopping (B2C) at Safeway Safeway has announced it has found a mobile application that really works. In 1999 in a field trial at a Safeway store in London, the company loaned Palm Pilots to 200 customers to try for remote shopping. Safeway quickly found that remote shoppers not only purchased more as a result of using the devices, but also showed a significant increase in responsiveness to advertisements. To use the shopping program, customers pull up a grocery list based on their own purchasing history by clicking an icon on their Palm’s applications screen. Shoppers download their personalized shopping list, receive special offers and place orders by synching their Palm with Safeway’s corporate customer database via a standard telephone line. Currently, Safeway is developing wireless accessibility to the application as well. Because the database stores detailed purchasing history for each customer, the system can create personalized specials for individual shoppers. For example, dog owners may receive special offers on pet items, but not for cat items. Safeway chose the original group of 200 participants from heavy-spending customers who had at least some previous experience with the store’s phone and fax ordering services. According to Kevin Mann, marketing strategist for IBM’s Pervasive Computing Division, which built the program for Safeway, the group’s response to targeted offers was surprisingly successful from the beginning: 15 per cent of users responded to the mobile offers, compared to the single-digit percentage response rates most ad campaigns produce. More important, participating customers purchased even more of their essentials when they shopped with the devices. Although Safeway has not disclosed the exact percentage of increased buying seen in the trial group, according to Mann, ‘It’s not a small number; it’s a wake-up number’, reflecting increased sales in every category of groceries. The application itself is surprisingly simple. Although there is a key on the Palm devices for secure encryption, monetary transactions do not take place over a remote connection. Instead, shoppers pay at the store when they pick up their groceries. Unlike online shopping services, which offer customers access to the full contents of a store via multiple drill-down menus, Safeway’s Palm-based service presents customers with a checklist of only about 200 items. Because these 200 selections are taken from each individual shopper’s personal buying history, Safeway insists customers still have all the choices they want, without the hassle of large downloads and search times.

36

How businesses are using mobile technology

WAP phones will find it challenging to implement applications such as Safeway’s remote shopping because WAP phones are not able to provide that much data. But with the introduction of Java phones, there will be fast connectivity beyond what WAP offers. Targeted advertising requires an understanding of consumer trends, an area in which Safeway has already invested heavily. The chain has collected purchasing data and related it to specific buyer profiles for years through its loyalty card programme. When customers use their loyalty cards to receive discounts at the cash register, Safeway collects data on each individual’s product choices, size of purchase and time of purchase. It then analyzes this data to spot trends and identify distinct shopper profiles. This is not the first time Safeway has tried other technology approaches to reduce labour costs and increase customer loyalty. In 1995 it experimented with handheld scanners, letting customers move through the store checking prices and keeping track of how much they were spending. Safeway began a ‘collect and go’ service in 1997, which studied customers’ past purchases to suggest a grocery list, which customers phoned or faxed back to the store. All these programmes helped prepare Safeway for the transition into the mobile market, letting customers submit orders any time, anywhere. IBM’s Mann says the biggest breakthrough was simply coming up with creative ways to apply the existing capabilities:

There’s hard work to do in these projects, just like any other IT project, but this is no longer rocket science. It didn’t take a very long time to get it together, and it didn’t require lots of resources. When they went live it was immediately successful.

Safeway isn’t alone in seeking out new ways to get in touch with its customers. Its primary competitor, Tesco, is also testing new technology to allow grocery purchases via the internet for home delivery. According to Adventis consultant Bob House, who advises Tesco, the company has already recruited 250,000 online customers and estimated that customers’ purchases have increased by as much as 50 per cent. Tesco is planning to extend its online service to mobile phones, from which users will be able to confirm instantly their purchases, make changes to their standard orders, and specify which two-hour delivery window works best for them. After six months, Safeway was so pleased with the results of its mobile system that it began plans to expand the test to five additional stores in the UK and has now deployed the application to 1,000 customers. However, that is probably about as far as the trial will go, say both IBM’s Mann and Safeway’s Withers. As Mann admits:

The cost of having only a few people on the system far outweighs the profits. But what Safeway’s really interested in doing with this trial is testing the technology, fine-tuning

37

Maximizing Strategic Opportunities

its approach, and learning how to craft an effective user interface, so when it wants to make a major technology play, it can do so confidently.

That major technology play, he says, will result in providing software that supports multiple devices so that shoppers can access a remote-shopping service from their personal phones and handheld devices. Mann states that Safeway ‘needs to be ahead of the curve when it comes to innovation [so it can] maintain market share leadership’ in the extremely aggressive grocery industry. By experimenting with mobile devices that will eventually lead to a wireless implementation, the company is also providing a real-world test of whether m-commerce is a viable business option. To date, all the initial testing has been widely accepted and successful.

Case study

Tightening the supply chain (B2B) at Wesco International Extending supply-chain management tools to the wireless world is not yet a reasonable investment, says Kevin O’Marah, the service director for supply-chain strategies at consulting firm AMR Research. ‘Once the truck has left the dock’, he says, ‘the supplier can’t come up with another 14 cases of product just because the order shows up on the dispatcher’s Palm.’ When time is a critical issue in cost or customer satisfaction, wireless can offer numerous benefits that justify the initial investment. ‘For field service-intensive, maintenance-type businesses involving complex machinery, mobile supply-chain applications are worthwhile already’, O’Marah says. ‘It’s just a question of how unpredictable, labour-intensive and inventory-heavy the business is.’ Wesco International, the world’s largest distributor of electrical supplies, assists a clientele whose operating environment is inherently erratic, labour-intensive and/or inventory-heavy. The 84-year-old Fortune 500 company has a lengthy commitment to establishing customer relationships. With a distribution network of 350 sites around the USA, Wesco entered the online world with Wescodirect.com. Russ Lambert, Wesco’s director of e-commerce, saw secure benefits that would follow from adding mobile capabilities to the existing business model. Most Wesco customers – construction companies, utilities, service and repair companies – are under substantial demands to complete projects on time and on budget. Ensuring that the right part is available where and when it is needed is imperative. So is avoiding excess inventory, not only because it hurts cash flow but also because there is not a lot of storage space on job sites or repair trucks. In both construction and field service, employees are usually highly skilled, thus costly, and so keeping them in a productive mode is key to the success of business. These types of industries typically deal with a significant amount of unpredictability. A service representative has no way of predicting which piece of equipment

38

How businesses are using mobile technology

will fail, nor can a construction supervisor anticipate sudden supply issues. In an effort to avoid expensive downtime, unnecessary inventory items are stockpiled and extra charges are incurred for rush orders. However, even with the best intentions and plans, the process of identifying and ordering supplies is filled with disruptions and inefficiencies. A field-service representative who lacks a needed article on the service vehicle might not be able to place an order until the end of the day back at the office, resulting in further repair delays and downtime for the client’s business. On large construction sites, says Chud Fuellgraf, president of Wesco customer Fuellgraf Electric, a contractor is likely to amass numerous notes about needed inventory before returning to the job-site trailer, making it easy for them to become lost or misplaced. Faxes and mail orders can take several days, so contractors must begin the process of either finding parts somewhere else or put the job on hold. At first, Wesco’s customers did not directly demand wireless services, says Lambert:

We saw customers struggling with lots of paper, lots of fax machines, and lots of phone calls. We saw that as a pain point, and we started asking customers, ‘If we could automate this portion, would that make sense?’

There were apparent pluses to allowing customers to order remotely what they needed and whenever they needed it. For Wesco, it boosted sales and customer loyalty. For Wesco’s customers, it eliminated problems such as unscheduled downtime and rush charges by giving them instant access to availability. Working with e-commerce specialist Vignette, Wesco catalogued over 50,000 items online, connected the catalogue to the inventory database, and erected a transaction-processing system. Wesco’s e-commerce team launched the service on the wireless-capable Palm VIIx devices because of Palm’s 70-per-cent market share and because the Palm OS has an easy development platform. Lambert’s e-commerce team also banked on the fact that other hardware vendors were adopting the Palm OS platform, thus allowing Wesco easily to transfer their application to other devices as their customers requested it. Weslink, Wesco’s service, includes three parts: ■

the ordering application that resides on the Palm, which was developed in-house by a three-person development team within Wesco’s e-commerce group;

■

Vignette tools that manage the communications between the various applications, the Wesco website and the wireless devices;

■

an internet gateway, developed by Wesco’s main IT group, which translates between the website and Wesco’s ten-year-old legacy computer systems.

39

Maximizing Strategic Opportunities

Aside from Vignette’s consultants, Wesco handled all the development in-house. The company employs more than 100 people in its IT and e-commerce departments. Wesco’s development team’s biggest hurdle was ensuring that the product would be attractive and useful to its customers. Acting on customers’ suggestions, Weslink went through three major revisions and upgrades before launching in November 2000. Using Weslink, customers know as soon as they place an order whether the desired item is in stock and can select a substitute if necessary. The application even includes a calculator that handles engineering-type calculations of such things as the appropriate size of wire or conduit for a particular job. After four months of using Weslink in the field, contractor Fuellgraf says that, while he expects the service to save him money eventually, his company is already seeing significant non-cash benefits in two areas. ‘We’ve reduced the number of billings’, he says, ‘because we’re not ordering nearly as often. We’ve also reduced the downtime for our supervisors, who can do the job they’re out there to do instead of sitting on the phone ordering materials.’ The fact that his employees can carry the device any time also pays off: Fuellgraf says he finds that his employees are even using the application after hours – an employee watching a football game remembered that he needed a certain part and entered the order without getting up from the couch. Several months into Weslink’s deployment, Wesco received between three and ten orders per day through the system. About 50 customers signed up at rollout, while several dozen more have signed on since. Weslink complements and extends the functionality of technology components Wesco already had in place, such as the e-commerce site. Costs for Weslink are minimal, including staffing the 24-hour, seven-days-a-week helpline; the workgroup for the product consists of about five employees, including Webb. A significant part of this team’s work is enhancing Weslink to incorporate suggestions that have been coming in since rollout. ‘This is an orderentry tool, and different people want different things out of that’, says Webb. His team has incorporated some suggestions already and is working on others: administrative tools to let customers see order status; better record-keeping capabilities; and the ability for a user to assign aliases to product names, which are often better known by slang terms than by the 100-character description in Wesco’s catalogue. While Wesco expects to recoup the costs of developing Weslink through increased sales and efficiency, its true value to the company, says Lambert, is as part of an ongoing campaign to deliver customer satisfaction and work closely with customers. ‘The relationships will be tighter, and we’ll get more of the business. That’s where we see our long-term return: greater loyalty, greater penetration, getting more tightly linked into their business operations.’

40

3 Key issues and trends

■

The importance of security

■

Security options

■

Emerging wireless markets

■

Bandwidth

■

Electronic messaging trends

43

44 50

54 55

41

Key issues and trends

THE IMPORTANCE OF SECURITY Wireless security issues have become more critical because of the increasing adoption rate of mobile technology for communication, data transfer and transactions. With advances in wireless handheld devices, much more than the ability to have a private conversation is at stake. Organizations and individuals are progressively using their wireless handsets to download e-mail, transmit corporate information and participate in m-commerce. Unfortunately, just as in the wired world, new technologies are subject to unauthorized access. As the acceptance of wireless grows, so does the need for privacy and security measures. As rapidly as vendors are unveiling new wireless security solutions, researchers are poking holes in them, which is why many proponents want to approach security issues in a holistic manner. Today wireless security addresses two main issues: protecting information and preventing unauthorized access. Most wireless security mechanisms have been developed as a result of mistakes made in the early days of cellular and cordless telephones when analogue conversations could be easily picked up with simple radio scanners. The importance of wireless security continues to increase as wireless networks become standard throughout society. First-generation wireless security standards, such as Wired Equivalent Privacy (WEP), were designed as a baseline for digital traffic. While WEP is adequate for smaller wireless installations, it is not capable of meeting the security requirements of large networks. As John Drewry, senior director of business development at 3Com, has said,

What the industry was trying to implement was a baseline. They weren’t trying to address everyone’s wireless security needs with one protocol. With the coming standardization and enhancements, the technology will go mainstream with applications for everyone from home users up through the very large enterprises. To find a single security solution that will address the needs of all those different environments is not realistic.

Enterprises need to focus their wireless security on three specific areas: ■

transmission

■

device

■

wireless gateway.

43

Maximizing Strategic Opportunities

It is imperative to evaluate each of these aspects of wireless technologies in terms of individual needs. Whilst one business may have an issue with easily lost handsets among users, another might have issues with transmissions being monitored or gateways being compromised. Tracking down wireless vulnerabilities can also take more sleuthing than traditional network and wireline security issues, because not all wireless transmission devices are deployed by the corporate IT department. To tackle wireless security in the enterprise, you first need to ask the basic question, ‘Are employees using any type of wireless device to transmit company data through an information gateway?’ Many personal wireless users route corporate e-mail through wireless portals, once they realize how convenient these can be. And others keep information such as contacts, e-mail and calendar entries on their wireless devices. Some 90 per cent of enterprises surveyed by Telephia wireless research firm indicated that e-mail raised the greatest wireless security concerns. Calendar and address book entries were next, with 80 per cent, and access to the corporate network via wireless only concerned 25 per cent, although accessing company databases and networks is considered one of the most dangerous wireless activities at risk of breaches of security. In medical and law enforcement circles, wireless security is dictated by very specific regulations, because of the sensitive nature of information being passed over the airwaves.

SECURITY OPTIONS Currently, the most problematic issue surrounding wireless security and privacy is a lack of understanding, even though the issues for wireless security parallel those in traditional wired networks. Another prominent issue arising with wireless devices is how to implement security. Currently, the two options are removable security elements and embedded security elements. The removable security element can be interchanged with multiple wireless devices. Security elements can be stored as WIM (Wireless Identity Module) functionality on a SIM (Subscriber Identity Module) card, creating a combined SIMWIM card. Alternatively, additional chips may be stored on a removable device, such as a smart card with a WIM application. Embedded security elements support non-SIM technologies such as proprietary hardware and software. Not too far off in the future, biometrics may be the answer for security for wireless devices. Biometrics involve measurable physical characteristics – such as 44

Key issues and trends

fingerprints, voice patterns or the shape of the human eye – that are easy to authenticate but difficult to counterfeit (see Fig. 3.1). Biometrics will virtually guarantee the authentication of a wireless device’s user. Biometrics can be either software-based, such as signature recognition, or hardware-centric, such as fingerprint scanning. Digital IDs based on unique features of the human body will eventually replace complex passwords and PIN numbers.

Fig. 3.1

Top biometric technologies by business

Handprint 7.1% Retinal scan 14.3%

Fingerprint reading 64.3%

Voice print 28.6%

Source: TechTV

At the 2000 Comdex show in Las Vegas, fingerprint and iris-recognition technologies appeared touting their security features for laptops, PDAs and other wireless devices. For example, Motorola has been funding research for the integration of fingerprint scanning with wireless handsets for user authentication. Other wireless hardware industry giants, including Siemens and Sony, are in a rush to market with wireless devices embedded with fingerprint scanners for identification and authorization.

What is encryption and how does it work? Securing traditional wired networks has been achieved through a process known as encryption. Electronic encryption is accomplished with algorithms that use a ‘key’ to encrypt and decrypt messages by turning text or other data into digital

45

Maximizing Strategic Opportunities

code and then restoring it to its original form. As the size of the key is increased, so more computing power is needed to compromise the code. To crack an encrypted message without the exact key requires trying every possible key. These keys are comprises of bits, binary units of information that can have the value of zero or one. Because determining combinations are exponential, an eightbit key has 256 possible values. A 56-bit key poses 72 quadrillion possible combinations. And a 128-bit key 4.7 sextillion (4,700,000,000,000,000,000,000) times more difficult to crack than a 56-bit key. Currently, a 56-bit key is considered crackable, but a 128-bit key, which has emerged as the new digital standard, is not. Encryption software can also utilize keys in assorted ways. With single-key encryption, both the sender and receiver use the same key to encrypt and decrypt messages. However, this means the sender has to send the key to the receiver somehow, without it being intercepted. This is still considered a security risk. A fairly recent improvement in cryptography is the invention of public-key systems, which are algorithms that encrypt messages with one key (a public one) and permit decryption only by a different key (a private one).

What is privacy? Privacy is increasingly being undermined by technical advances. Millions of databases worldwide collect and store just about every type of information imaginable – telephone numbers, e-mail addresses, personal information, medical records, purchasing trends, travel information – the amount data is mind boggling. However, as computational power increases, organizations are developing effective ways of drilling down into the data to extract the precise information they need. Mobile advertisers and marketing firms are going to walk on very thin ice as privacy issues arise in the wireless environment. While businesses see the mobile medium as new uncharted territory, end users are dreading a new barrage of unsolicited communications akin to junk mail, spam and telemarketing. Privacy is a human right, although definitions of privacy vary greatly according to perspective and location. In many countries, the concept has become synonymous with data protection, which interprets privacy in terms of management of personal information. However, privacy should not be confused with security. Protection of one’s privacy is generally defined as a way of setting limits as to how far society can intrude into a person’s affairs.

46

Key issues and trends

There are different types of privacy that need protection. Rules governing the collection and handling of personal data – such as credit information, and medical and government records – fall into the area of data protection. Communications privacy encompasses the security and privacy of mail, telephones, e-mail, SMS, chat and instant messaging. With the introduction of GPS (Global Positioning System) into mobile devices, territorial privacy is rapidly becoming an issue. This type of privacy deals with setting limits on personal surveillance. In 2000 the European Commission released a proposal for a new directive on ‘the processing of personal data and the protection of privacy in the electronic communications sector’. The proposal was introduced as part of a larger package aimed at increasing competition within the European electronic communications markets. These changes update the existing 1997 Telecommunications Directive by extending the existing protections for an individual’s ‘telecommunications’ to a broader, more technology-generic category of ‘electronic communications’. The updated version exchanges existing definitions of telecommunications services and networks with new definitions of electronic communications services and networks. In addition, it adds new definitions and protections for calls, communications, traffic data and location data, in order to improve the consumer’s right to privacy. These new provisions would, for example, protect mobile-phone users from precise location tracking and surveillance. The directive also gives subscribers to all electronic communications services, such as GSM and e-mail, the right to choose whether they are listed in a public directory.

Wireless security today and tomorrow WAP is an open specification that allows wireless devices to access and interact with information and services in real time on a wireless network. Wireless Transport Layer Security (WTLS) is the wireless security layer specified in WAP, similar to Transport Layer Security (TLS) which is the security mechanism for the internet. Thanks to WAP’s ability to deliver content, WTLS can also support scripting capabilities. WTLS uses elliptic-curve cryptography (ECC), which provides a high level of security while demanding few resources. However, e-commerce sites (and many corporate sites) use Secure Socket Layer (SSL). SSL requires a ‘reliable transport layer’, i.e. one that ensures that all packets arrive and in the right order. TCP is usually used for this reliable transport but the WAP designers decided that TCP could not be implemented over all the wireless devices for which WAP was

47

Maximizing Strategic Opportunities

designed. Hence, WTLS, which is an adaptation of SSL/TLS, can run over nonreliable transport layers. ECC is not a mandatory part of WTLS, just an option in the specs, and therefore has not been used much in practice. The WAP specification is independent of any operating system, device or network. Generally speaking, however, coding for WAP should not be difficult for anyone who is familiar with Java and HTML. Currently in WAP there is a two-zone security problem where over-the-air encryption is not the same as on-the-wire encryption. This creates an unencrypted/re-encrypt operation at the carrier’s server. However, for buying film tickets with a WAP device, carrier-level security is sufficient. Since WAP’s ability to deliver true end-to-end security solutions is extremely weak, additional solutions are being actively sought. One of these solutions involves an authentication mechanism called the Public Key Infrastructure (PKI). PKI authentication is performed by the same mechanisms used in wire line networks. These include key management and encryption. With the growth of enterprise wireless networks and m-commerce transactions, PKI is becoming critical for identity verification. Wireless PKI (WPKI) creates a secure and trusted environment by using cryptography, digital signatures and digital certificates. It meets the four key requirements of privacy, authentication, integrity and non-repudiation. This is accomplished by providing each individual in a PKI with a pair of keys – a private key and a public key. These key pairs are linked using cryptography and each key pair is unique. The sender’s message is digitally signed by the private key. That digital signature would be as valid as the sender’s personal signature. The public key of the key pair is used by the recipient of the message to verify the signature. Because it is the one and only matching key, only it can verify the signature and provide proof that the originator is who they claim to be, as well as checking that the data has not been changed in any way. When PKI is implemented on a wireless device, there is a key store on the device where the private key and a public key pair are generated. The private key never leaves the device’s key store and is protected by a PIN, whilst the public key is registered with the Certificate Authority (CA). This protocol is specified WPKI for communication between a wireless device and a PKI portal, which is basically the certificate authority proxy. These PKI portals can mediate between multiple CAs and multiple types of algorithms used in cryptography. Several PKI products for wireless communications are emerging, including MobileTrust by Certicom. Applications currently being tested by ePocrates, a

48

Key issues and trends

company focusing on delivery of medical information via secure wireless devices, include real-time medical information exchange such as writing prescriptions and accessing medical records. However, the challenges of implanting PKI on handheld devices include low throughput, computational power and integration to legacy systems. Another viable option for wireless handsets is a smart card that provides a place to store security information. Historically smart cards have been deployed in two places – point-of-sale transaction value cards that can be slid into a public telephone and SIM cards for GSM phones. (In the WAP world a SIM is a WIM – Wireless Identity Module.) Widely used in Europe and Asia, GSM phones are equipped with a smart-card reader in which a user inserts a SIM card provided by the carrier. Simon Blake-Wilson of Certicom explains the advantages of using a smart card:

One of the features of having a smart card, especially for me because I travel frequently, is I don’t have to carry my handset around from North America to Europe. My North American handset won’t work in Europe, but I can still pull out the SIM, take it with me and plug it into a European handset, make calls and they will be billed correctly back to my account in the States.

The SIM contains your phone number, information for billing and encryption technology for the calls to be encrypted as they pass over the wireless link. What Certicom is examining now is the integration of application-level security into smart card. Smart cards also provide a way for keys and certificates to be embedded on wireless devices, in addition to being directly embedded on the device itself. A smart card is a better place to store the keys, rather than Palm devices, in which the keys are embedded on to the device. However, true wireless security starts to break down when enterprises and e-businesses begin transmitting corporate and financial information using devices that can be inadvertently lost or stolen. Security is always difficult to implement and ultimately rests on policies and people. Furthermore, although there are many wireless security option available, none of them by itself is completely secure. Each security solution has its own respective shortcomings. This may be because wireless security is often considered as an extension of internet security and many industry proponents feel there is no need to ‘reinvent the wheel’ for wireless security.

49

Maximizing Strategic Opportunities

Ultimately, wireless security rests on the actual location of the device itself. John Pescatore, senior analyst with the Gartner Group points out: ‘Companies come to us very worried about interception over the air, but the biggest risk we’ve seen is the physical security on the device itself. With Palms and Blackberrys in particular, the password is optional.’ So if the device is lost or stolen, all the information and access available on that particular wireless device is available to whoever has possession. The best way to combat wireless security in the enterprise is by instituting a comprehensive wireless policy integrated with general IT policies. This does not mean telling employees they cannot use wireless devices, but specific guides should be in place telling them exactly how they are allowed to use wireless for business purposes.

EMERGING WIRELESS MARKETS The number of wireless phone subscribers worldwide is expected to reach 1 billion by 2002, with a considerable number of these users having wireless internet access. This translates into mobile internet users outnumbering wire-line internet users by 2003. Several industry analysts forecast that m-commerce will represent a multibillion-dollar business by 2005. With a wireless device in the pocket and constantly connected via GPRS and other 3G technologies, instant shopping and electronic payment services from the mobile phone will be commonplace. M-commerce today is a typical budding market, laden with a profusion of methods and concepts that do not always operate together seamlessly. At present, there is no single body providing globally accepted standards for m-commerce. Whilst several initiatives have been undertaken by various organizations to promote standardized protocols and security, they have failed to address the unique requirements of wireless devices, which essentially put end users at the centre of the m-commerce world. Therefore, wireless users want to maintain control over their personal security when accessing content and completing transactions. Cahners In-Stat Group estimates that over the next few years there will be significant wireless subscriber growth worldwide, reaching a global market penetration of 24 per cent by 2005. This period will see several changes for the wireless industry – the most substantial being the rollout and adoption of 3G. However, capital investments required to put 3G infrastructure into place will not yield significant subscriber revenues to offset the short-term expenditures, so delaying profitability until well after 2005. This could possibly lead to serious conflicts when it comes to allocation of funds needed to maintain a profitable 50

Key issues and trends

2.5G service and to add to the 3G subscriber base. Nevertheless, subscriber growth is predicted to grow at an unabated rate and it will be services, not a particular technology, that will push the growth in the wireless industry. Despite the wireless market experiencing turbulent growth, the largest stumbling block remains constrained service availability. However, the wireless market is expected to remain in a growth pattern, based on the deployment of 2.5G services such as General Packet Radio Service (GPRS) and Code Division Multiple Access 1x (CDMA 1x). Additionally, new application development will be driven by the availability of WAP, BREW and J2ME (see Table 3.1).

Table 3.1

US carrier 3G network technology migration schedule

Carrier

Network technology

Estimated deployment

Subscribers

Verizon Wireless

CDMA 1X

Limited markets July 2001; nationwide 2002

28.7 million

CDMA 1EV

Following 1X rollout

GPRS overlay on GSM markets

Year-end 2001

GSM/GPRS overlay on TDMA markets

Begin year-end 2001; completion early 2004

EDGE overlay on GPRS/GSM markets

Begin late 2002

GSM/GPRS overlay

Conclude year-end 2002

Begin upgrade to EDGE

Mid-2002

Begin upgrade to UMTS (W-CDMA)

Early 2003

CDMA 1X

Test deployment end of year 2001; commercial nationwide mid-2002

CDMA 1xEV-DO (evolution/data only)

2003

CDMA 1xEV-DV (evolution/data voice)

2003–5

Data compression to boost data rates to 60–70 kbps

First half of 2002

iDEN upgrade to double capacity

2003

Launch GPRS

Late 2001

Begin upgrade to EDGE

First quarter 2002

Cingular Wireless

AT&T Wireless

Sprint PCS

Nextel Communications

VoiceStream Wireless

21.3 million

17.1 million

14.4 million

9.6 million (8.17 million domestic)

6.3 million

51

Maximizing Strategic Opportunities

While geographic wireless coverage is improving, data speeds need to increase and service prices will need to decrease. Horizontal applications, such as e-mail and wireless reporting, are expected to drive the mass market. Demographically, the largest markets for wireless data services over the next few years will be the consumer and large business markets. The number of small businesses utilizing wireless technologies is forecasted to grow from 765,000 in 2000 to more than 7.3 million in 2005. Another significant target poised for rapid growth is children and young adults aged 10–24 in the USA. Cahners In-Stat Group estimates wireless youth subscribers will exceed 43 million by 2004, up sharply from the current 11 million. That means by 2004 half of US youths will own a wireless phone and nearly three out of four will use one. University-bound young adults aged 18–24 will be the largest segment of the youth wireless market. Carriers are pursuing young wireless data subscribers with targeted content on their wireless internet services. These sites will provide shopping, news, sports, entertainment, education, opinion polls and other types of youthoriented content. To appeal to this audience, carriers and handset manufacturers will offer a wide variety of wireless handset colours, forms, faceplates and accessories for this fashion-conscious crowd. With many parents footing the bill for the young users’ phones and service, carriers are advocating the ability to communicate with their kids anywhere, anytime, although the lure for the kids is primarily a cool way to socialize. Not only is wireless making a significant impact on economically stable and growing societies, but it is also infiltrating lesser developed and impoverished areas. The ‘telephone ladies’ of Bangladesh, one of the most impoverished places on Earth, is an excellent example of how wireless telephony has improved the quality of life for people who live in extreme poverty. In a country with 130 million people and only 500,000 wireline phones, the wireless phone service offered by the women represents wealth and prosperity. The women, who power their phones with solar panels, now make $500 per month and there is no more travelling to the city to make a phone call. Yunis’s programme (named after Professor Mohamed Yunis, founder of the Gramine Bank) has already spread to over 3,500 rural villages. With wireless phones available worldwide, it is only to be expected that all wireless handsets should have the capability of roaming from country to country and region to region, without the loss of any functionality. However, accomplishing this feat is easier said than done. Yet there is a market for this type of wireless service. For example, in 2000 28,065,000 travellers from the USA visited locations with GSM service. The popularity of international travel and the value of always being in contact will drive the demand for world phones over the next few years. Cahners In-Stat Group expects the total number of global roaming phone subscribers will

52

Key issues and trends

be approximately 91 million by the year 2005. ‘Global roaming capability is becoming more important as international travel becomes more prevalent’, says Ray Jodoin, a principal analyst with the high-tech market research firm. ‘Perhaps this is why every major cellular handset manufacturer and even some mid-tier manufacturers have a world phone amongst their current offerings.’ By 2005 an estimated $29 billion in roaming revenues will be generated by international travellers as world phone subscribers travel in ever greater numbers. The wireless technologies most likely to advance the global roaming market are the GSM 850/900 and PCS 1900 bands. GSM will still be the target into the year 2005. One in four international travellers are business people, so the majority of the travel is by professionals, managerial or executives who have annual incomes above $100,000. The Americas and Europe account for 78 per cent of all international travellers.

The expansion of m-commerce With over 500 million internet-enabled wireless devices in the hands of consumers by 2003, m-commerce will become one of the key applications of the mobile society. Mcommerce will provide operators with new markets and allow them to gain leverage investments in technologies such as WAP and GPRS. Financial institutions will see a marked increase in the number of transactions as an obvious consequence of mcommerce. By using the wireless device as a conduit for banking and payments, a multitude of new personalized services will appear. Because many of these services will be developed on standard methods, their time to market will be minimal. One of the current leading concepts in m-commerce is the Wireless-enabled Application Service Provider (W-ASP). W-ASPs offer the infrastructure and services to deliver applications over a wireless network for a fee. Applications are accessible via the internet as well as on wireless networks. Some 90 per cent of the already established W-ASP subscribers are organizations with more than 100 employees, and roughly 68 per cent of these subscribers work for enterprise businesses. There were an estimated 140,000 subscribers in 2001. However, in spite of the increasing growth of wireless services in 2001, the lure of wireless access was not enough to give the W-ASP industry the major boost it needed. Limited bandwidth and the poor usability of wireless access devices for accessing applications, such as WAP-enabled phones and Palmtops, consign W-ASPs to primarily vertical-specific business niches. According to Kneko Burney, a director at In-Stat:

53

Maximizing Strategic Opportunities

The future of W-ASPs rests keenly on the growth and evolution of the wireless internet and the comfort-level of US business professionals using the internet to interface with various applications. Though this market has a great deal of promise in the long term, growth for these hosted services in US business and consumer markets is expected to be quite moderate, particularly for the next two to three years.

Burney predicts that despite the global economic downturn, the convenient nature of wireless access devices for using applications, as well as the fairly non-strategic nature of wireless-accessible hosted applications, will lead to slow but sure adoption over the next five to seven years. Similar to the W-ASP concept are wireless portals, which are becoming increasingly popular (see Fig. 3.2). Wireless portals provide software infrastructure and products for the mobile internet, delivering content and enabling transactions across multiple devices and platforms. Portals provide the ability to translate web content into Voice eXtensible Markup Language (VXML) for interactive voice response (IVR) applications, or WHTML format for WAP-enabled phones. Significant value can be attained by publishing content in a single, standard format, which can then be automatically reformatted for almost any wireless device with a built-in browser. ‘Many in the industry are projecting growth for potential wireless data services’, according to Dick Snyder, wireless data strategy director for Lucent’s Wireless Networks Group. The first two major wireless portals were Sprint’s Wireless Web Portal and Palm Computing’s Palm.net portal. However, players such as Yahoo, AOL and other internet-content providers have developed their own wireless portals as an extension of their online services. Most major wireless carriers have wireless portals in place, but are charging a premium for their service. The Strategis Group predicts that low-speed wireless internet service will eventually be free to subscribers as part of a bundled, enhanced service plan.

BANDWIDTH The slow data rate of 2G wireless networks is one of the main impediments in the adoption of wireless internet applications. The good news is wireless bandwidth is expected to increase by 25 times over the next ten years. High-speed circuit switched data-rates of 57 kbps for e-mail and file transfers can also be expected.

54

Key issues and trends

Although this technology will be widely available, carriers are predicted to move to General Packet Radio Service (GPRS) that will give users up to 144 kbps for wireless applications in the next five years. Code Division Multiple Access (CDMA), which will be a significant facet of 3G, will boost transfer rates even higher, into a range from 384 kbps to 1.2 Mbps. Overall, 3G wireless systems will provide significantly higher data rates (up to 2 Mbps) and offer a new array of mobile communication services, including video teleconferencing and web browsing. Global roaming capabilities of 3G wireless devices are also now closer, thanks to the international IMT-2000 standardization effort. Fig. 3.2

Wireless portal subscribers

25

Millions

20

15

10

5

0 2000

2001

2002

2003

2004

2005

2006

Source: The Strategis Group

More wireless bandwidth spells success for mobile data technologies both current and future. Access to better bandwidth will drive the wireless internet to include rich interactive features and streaming video in full colour/audio. Thus private radio networks for data communications will eventually become outdated.

ELECTRONIC MESSAGING TRENDS Short Message Service (SMS) is popping up everywhere. From getting the latest news and weather to quickie conversations with other users, SMS has transformed instant communication into a more personalized messaging environment.

55

Maximizing Strategic Opportunities

SMS is a feature available in the new wave of wireless handsets, allowing users to send and receive short text messages, generally from 150 to 160 characters, to other cell phones. SMS is usually limited to phones activated on the same network; however, expansion on to other networks is imminent. Wireless users usually pay a monthly fee to their service provider or a small fee for each text message. Some companies even offer SMS free of charge. SMS can also be sent from a cellular service provider’s web page or by visiting web sites that send text messages free of charge. The success of SMS in European and Asian markets has been explosive, with average penetration rates in these regions between 60 and 70 per cent. In May 2001 subscribers in Europe sent a total of 19 billion messages, which surpassed voice-call minutes. UK usage is also very high (see Fig. 3.3). This growth has been primarily due to the increasing number of teens and young adults that are using these services. The GSM Association reports estimates that 25 billion SMS messages a month will be sent worldwide by 2002, whilst the Mobile Streams research group estimates that number to be almost double (see Fig. 3.4).

UK SMS message usage

Fig. 3.3

1,000

Millions

800

600

400

200

Source: Mobile Streams

56

Mar-01

Feb-01

Jan-01

Dec-00

Nov-00

Oct-00

Sep-00

Aug-00

Jul-00

Jun-00

May-00

Apr-00

Mar-00

0

Key issues and trends

Global SMS message usage per month

Fig. 3.4

60

Billions

40

20

0 North America

South European Eastern Union Europe America

December 2000

Asia

Middle East and India

Africa

December 2001

Source: Mobile Streams

In comparison, the US market has seen a moderate adoption of SMS. At the end of 2000 users sent a total of only 100 million messages, producing a paltry penetration level of 12 to 15 per cent. This offers huge market potential and growth opportunity for SMS services in the USA. Carriers in the USA recognize the potential of the youth market, and are aggressively promoting their services in this segment. SMS works on a similar model to instant messaging (IM) systems over the internet, but using wireless handheld devices. Network operators generally charge the same amount to send a short message to someone in the same room as they do to someone travelling overseas with their mobile phone. Thus SMS has achieved a new level of personal communication, proving itself to be more expedient than e-mail or IM. However, SMS is also encountering growing pains as a result of the interoperability issues in the IM community. Divisions between proprietary and open standards threaten to restrict the rapid expansion of the market that a single, global standard might encourage. In June 2001 the GSM Association announced

57

Maximizing Strategic Opportunities

the release of wireless handsets with the Enhanced Message Service (EMS) standard, which offers a richer user experience with choices of typefaces, format, text alignment, icons, animation and distinct ringtones. Meanwhile, Nokia, which holds 31 per cent of the European market is staying with its proprietary Smart Messaging system, which is incompatible with EMS. Nokia is banking on the next step, Multimedia Message Service (MMS), and began shipping handsets with the MMS technology in 2002.

WAP v. SMS WAP and SMS, although very similar in technology, are inherently different in functionality. The main difference is that WAP is passive and SMS is active. This divergence feeds both kinds of wireless users – those who want access to particular information and will actively seek it will be more inclined to WAP, whereas users who require content to be pushed to them automatically (stock quotes, news, etc.) will migrate to SMS. One of the advantages of SMS over WAP is its ability to store messages. If a WAP device is turned off, there is no flow of information. SMS has the capability to store messages for later retrieval. However, SMS will not deliver the rich content that is expected to drive the wireless internet. That would fall more into the territory of WAP.

E- via handhelds Wireless e-mail – it’s everywhere you turn. Almost a hundred companies now provide interfaces between e-mail applications and wireless devices. Carriers are stepping on the bandwagon by integrating e-mail capabilities into their base services. To bring the personal users on board, portals and providers are adding wireless e-mail access to the list of information accessible via handhelds. Wireless e-mail solutions combine two separate pieces: an element installed in the wireless device, which includes drivers and other software, and a component residing in the server or post office, which receives calls from the mobile users and sends messages to them over a radio network, similar to the cellular telephone system. Most wireless devices also require some type of web clipping application (WCA) in order to receive e-mail. Using standard internet mail protocols such as POP3 or IMAP, setting up a WCA is as simple as setting up a computer-based

58

Key issues and trends

e-mail account. The same information, such as user name, password, incoming and outgoing mail server names, are needed. Wireless e-mail applications provide the ability to send, receive, read, reply and compose. Another feature of wireless e-mail systems, which is designed to stem the tide of unnecessary communications, is a filter that allows the user to decide which e-mail is sent to the wireless device. Previewing options allow mobile users to receive only the headers of e-mail and then decide whether or not to download the entire message. All these functionalities take into account the limited bandwidth and screen size, in an attempt to make wireless e-mail attractive despite the limitations of current technology. To reduce the amount of data being sent, wireless e-mail management programs can compress text and send clips of the message for easier wireless transmission and display. Some wireless e-mail application providers are luring users to try wireless e-mail even if their wireless device is a simple voice handset. By providing sophisticated voice-totext and text-to-voice interfacing, these providers are banking on using existing technology as a stepping stone for more complex applications and technologies. The focus on providing wireless e-mail for businesses has had to take into account that organizations want to maintain control of their systems internally. So as well as providing outsourcing options, wireless e-mail providers offer on-site server options that provide end-to-end security required for the transmission of business data. Single mailbox integration, with only one e-mail address, is another primary feature now integrated into business wireless e-mail systems.

59

4 Mobile checklist

■

How will your business benefit from mobile?

■

The right wireless solution

■

Choosing wireless technologies

■

Making it all work together

64

64 68

71

61

Mobile checklist

According to the Meta Group, a research and consulting firm focusing on IT and business transformation strategies, 40 to 65 per cent of companies will make their critical applications available wirelessly within the next three to four years. Access to services and content via wireless devices such as internet-enabled phones, PDAs, two-way pagers and voice, will transform the way modern business is conducted. Businesses introducing wireless capabilities to their mission-critical applications achieve improved communication for their customers, employees and partners, and are able to work more effectively and be more productive. Organizations are already looking to provide wireless capabilities for their critical applications. Businesses that engage in the wireless arena today will lead the way and experience the benefits, while those that hesitate jeopardize losing customer confidence and market share. As the revolution continues through wireless innovations, businesses will improve productivity, build their brands and differentiate their products and services. Wireless technologies are transforming the way businesses interact with their customers, business partners and employees. By taking advantage of innovations in wireless technologies, customers can receive information, products and services anywhere. At any time, employees can access enterprise systems, business applications and productivity tools, and partners can share information in a timely manner. Wireless opportunities are increasing each day. Ever more consumers and professionals are using wireless devices such as WAP phones, PDAs and interactive pagers as parts of their daily lives. In 2002 it is estimated that there were over 1 billion wireless subscribers, and by 2004 wireless customers are expected to account for 40 per cent of m-commerce, according to the Gartner Group. Flashy new technologies such as icon-based interfaces, ‘always-on’ technology, the integration of data and voice and declining prices for both devices and service will continue to improve wireless adoption rates. By 2003 it is estimated there will be twice as many wireless phones as computers. While the wireless market is still emerging, businesses understand that participating in it is quickly becoming an inevitability. As with the internet, businesses that enter into the wireless world will harvest the most benefits. As the wireless growth rates have skyrocketed, it is very likely that businesses will be conducting a significant portion of their marketing, sales and service efforts through wireless devices. The answer for businesses thus becomes not whether to engage in the wireless world, but how to participate in it effectively.

63

Maximizing Strategic Opportunities

HOW WILL YOUR BUSINESS BENEFIT FROM MOBILE? Wireless telephony is transforming the way we work, the way we shop and the way we communicate. However, there are a number of important questions to ask and considerations to be made before integrating wireless into your business model.

Who is your audience? Are you focusing on supplying wireless solutions to your customers and/or your employees? Most likely, your answer to the second question will be ‘both’. The m-business infrastructure enables a wide array of users – customers, partners or employees – and devices to access various enterprise application services and information. However, the challenge is now the increasing volumes of content and applications, as well as the diversity of user devices that are requesting access to the increasing amounts of content. Being able to leverage these wireless access device technologies, as well as the massive proliferation of content and applications, can present substantial and lasting competitive advantages for your business. However, it is not necessary to pick just one audience for your wireless solution. For example, wireless infrastructure is to include both customers and employees, IT management should draw up a deployment plan that details which audiences will be offered wireless device capabilities at which phases of system evolution. IT management may choose to begin with employees only, and then expand the system design to include suppliers or customers.

THE RIGHT WIRELESS SOLUTION Your wireless solution is dependent upon your audience. Customer-based solutions differ significantly from internal/vendor-based wireless deployments. Some of the top reasons that business make wireless solutions available to their customers are because they:

64

■

increase sales per customer;

■

reduce support costs;

■

reduce customer acquisition costs;

■

increase on-time service delivery rates;

■

encourage more efficient logistics;

■

allow easier delivery of new products;

Mobile checklist

■

allow customers to access e-mail or download news;

■

allow customers to access account/customer-specific information;

■

allow customers to track orders;

■

help customers shop while in stores;

■

allow your business to push ads and/or product data to customers wherever they are;

■

provide offerings for specific industries (healthcare, legal, etc.).

Internal deployment of a wireless solution requires as much research and planning as a customer-centric rollout. Consider which business objectives you will achieve by offering wireless applications to your employees. They should include: ■

increased employee productivity

■

reduced costs

■

improved communications

■

increased revenue/sales

■

increased speed to market

■

more effective data capture

■

more efficient data analysis

■

new business model or corporate strategy.

As much as everyone wants to benefit from the advantages of wireless capability, determining how it will be used throughout your company is equally important. From blanket applications, such as e-mail, to department-specific functionality, such as supply chain monitoring, the choice of where a wireless implementation would produce positive benefits should be carefully considered. The following departments have profited the most from wireless devices in the market today: ■

marketing

■

middle management

■

non-sales travelling/field employees

■

production/manufacturing employees

■

sales force

■

senior executives

■

warehouse/stocking/logistics/fulfilment employees

■

information technology.

When you have determined who will be using wireless, the next step is to establish what kinds of mobile communication applications will be permissible. Options include communication between:

65

Maximizing Strategic Opportunities

■

employees and organizational systems

■

employees

■

telecommuters and company offices

■

employees and customers

■

employees and supply chain (e.g. suppliers, distributors, shippers, logistics firms).

Once you have decided what forms of communication will take place on your wireless system, you will need to consider content. Your content may be delivered in a variety of platforms and protocols. For example, it might be HTML web content on new, wireless-only custom applications based on WML (Wireless Mark-up Language) or other emerging and not-yet-standard formats. It is necessary to keep in mind your overall business strategy when deciding on the importance of mobile offerings for both customers and employees. What services and applications would best benefit your business model? You will need to plan in detail the adoption of your wireless services. Some of the major issues to consider when planning a wireless solution are: ■

Expense – who will bear the expense of the hardware and the service? Will you provide wireless devices or allow users to choose the handset or device?

■

Reliability – will users be able to access the wireless network when it is most needed?

■

Complexity – will your wireless solution be easy to use?

■

Security – will the information passed over the wireless network remain secure? (This is a crucial question.)

■

Support – who will support the users?

■

Return on investment – is it worth your time, money and effort?

How will you offer support? This question should be one of the final points addressed when planning a wireless solution. Only when you have established your wireless model can you truly decide how to support your users. It is paramount to remember that the wireless medium is very different from the other mediums presently being used to provide access to information. Although you may want to add visionary ideas into your plan, a successful wireless strategy is characterized by its own set of parameters, which need to be kept in mind when designing information access solutions for the wireless networks.

66

Mobile checklist

Just as with your traditional IT infrastructure, written corporate policies on the use of mobile computing devices should be put into place. For example, you might want to define the extent of providing wireless support for employees who purchase their own devices, or security measures such as immediate notification if a device is lost or stolen, as well as issues regarding personal use.

Who will be responsible for the selection of wireless devices? This is another challenge when rolling out a wireless solution in either an internal or consumer environment. Many employees already support their own wireless devices, such as PDAs and smart phones. As an organization, when you officially implement wireless into your overall structure, do you deploy a consistent set of wireless devices throughout your workforce or continue to allow individual users to determine what type of device would best suit their needs? Similarly, since your customers are the life-blood of your business, is it in your best interest to dictate through which wireless means they will wirelessly access your services? Will they be able to use their personal devices or will you, as a business, provide hardware and/or software specific to your applications and services? In Safeway’s deployment of wireless shopping (see Chapter 2), the initial testing phase provided wireless devices to customers in a controlled environment, but the public deployment of the system will include support for assorted wireless devices.

What modifications will need to be made to the network infrastructure to accommodate wireless initiatives? ■

Increased network capacity.

■

Increased network security.

■

Supported new programming standards (XML, WAP, etc.).

■

Increased server capacity.

■

Additional network server provider(s).

■

Additional application service provider(s).

■

More application development staff.

■

More network support staff.

■

More technical support staff.

67

Maximizing Strategic Opportunities

CHOOSING WIRELESS TECHNOLOGIES Wireless technology has advanced on many fronts. Phones are adding PDA-type data capabilities, while PDAs are adding a voice capability. Cellular networks are adding packet-switched data overlays and migrating towards the networking model of the internet. There will therefore be a mix of 2G, 2.5G, 3G and even 4G services in future and an increased emphasis on IP (Internet Protocol) networking. To date, the focus for wireless data has mainly been on these radio access technologies, the terminals employed, the applications and services that run on the networks and the networking infrastructure that will tie all of these elements together.

The hardware Wireless technologies have evolved into several distinct types of devices, all of which support a diverse set of protocols, platforms and applications. The vision for users of wireless is that all devices will integrate seamlessly, 100 per cent of the time. However, since that is highly improbable, you need to evaluate what technologies would best serve your business. Take a look at all the options for wireless connectivity available on the market today: ■

Windows laptops

■

Apple laptops

■

UNIX laptops

■

Palm OS handhelds

■

Windows CE handhelds

■

proprietary handheld devices

■

mobile e-mail devices

■

pagers

■

internet-enabled cell phones

■

voice-only cell phones.

The current market is indeed very confusing. Old business is based on telephony and smart phones; new business is internet and PDA-centric. And with the negative publicity currently surrounding the telecoms’ sector in general and 3G in particular, it is very difficult to decide what technologies to implement. Nevertheless, given the enormity of the market for wireless internet services and applications, finding a solution to fit your particular needs should be possible.

68

Mobile checklist

Conceptualizing wireless solutions for your specific needs is not a simple task. It involves extensive technology research, knowledge and experience in both the world of the internet and wireless telephony. Moreover, with all the wireless devices already on the market and just as many in development based on emerging technologies, the variety and number will certainly increase over the next few years. Some people estimate that the device lifecycle is currently between nine months and one year. As wireless bandwidth increases, this short lifecycle will only aggravate the diversity of devices in use as vendors add device functionality to leverage these new opportunities.

Applications After determining the type(s) of hardware and platform technologies that best suit your business, the next major step is choosing your wireless applications. In traditional application development, the destination device (such as a computer) was always assumed, and so the user interface component was a basic presentation layer. In contrast, the user interface is at the heart of a wireless application. Converting an existing application for wireless technology, or creating a new wireless application, involves sorting out the elements that determine the application’s user experience from the rest of the application functionality, and implementing a widespread user-experience layer that adapts the application to the specific circumstances, regardless of device, platform or architecture. Providing this favourable user experience for a wireless application involves examining aspects that are specific to each and every contact with the application. The user experience layer must adapt applications to the instantaneous requirements of a given user by taking into account data such as: ■

the attributes of the device being used

■

the client software (browser) used on the device

■

the mark-up languages support on the device

■

the bandwidth available to the device at that instant

■

the user’s preferred language

■

the user’s personal preferences

■

the physical location of the user

■

the current date and time.

69

Maximizing Strategic Opportunities

Wireless applications are not just about rendering the same content in the same way to every supported device. Rather, taking into account varying form factors such as screen size, display and input mechanisms, successful mobile applications must be able to deliver content and applications that leverage the unique features and capabilities of each device. The three options for developing and deploying wireless applications are: ■

custom development

■

platform-based development

■

mobile extensions to existing products.

Custom development for wireless applications has customarily been employed by large enterprises and very early adopters that accepted wireless as a compulsory competitive necessity and expansion of their core business. Internet portals such as America Online and Yahoo! and wireless carriers fall into this category. Due to their market strength, research capital and access to leading technologies, they have the abilities to dedicate a team of programmers to transform manually their content to WML, HDML (Handheld Device Mark-up Language) and other formats. Unfortunately, manually coding each application is extremely timeconsuming and expensive. Porting existing content to new formats is not conducive to developing new applications. Furthermore, it provides no resources for programmers to develop applications that can be distributed across channels to multiple, diverse wireless devices. So although in early wireless deployments custom development enabled large enterprises such as AOL and Yahoo! to create wireless applications, it was used only because there were no other options available. However, today there are numerous viable wireless platform-based development tools and wireless extensions to existing products. The need for custom development is beginning to fall by the wayside. Platform-based development is the second method for wireless business applications. By utilizing third-party software platforms, developers are guided through the process of wireless application deployment. They are able to integrate the platform within their company’s server environment, or they can have thirdparty systems integrators and hosting providers that develop and deploy their applications. This option allows businesses to capitalize on all the benefits of a development platform while maintaining the flexibility to manage their wireless applications either internally or through partners. Even though platforms differ in terms of capability, environments supported and scalability, platform-based development provides a number of important

70

Mobile checklist

advantages over the other options. Primarily, it has the ability to develop an application once and deploy it across multiple channels. Unlike custom and outsourced solutions – which require recoding to account for changes in standards, new channels and devices – platform-based solutions automatically adjust to these changes. This advantage allows a business to implement new wireless opportunities without rendering the application obsolete. Other key benefits are saving time and money in wireless development and management costs. The third option is mobile extensions to existing products. With the growth in demand for mobile access to applications, a few software vendors have offered basic wireless access to their products. If your enterprise requires only basic mobile capabilities, these product extensions are worth exploring. Unfortunately, more extensive wireless functionality by software vendors has been hindered by the cost and time required to create functional wireless support. Obstacles such as device proliferation and integration complexity only add to the problem. Fraught with the time and cost of integrating wireless capability into their current solutions, software vendors have failed to meet many of their customers’ expectations in a timely and cost effective manner.

Choosing mark-up languages Mark-up languages are merely the means for expressing how information is to be presented. Mark-up languages such as HTML, HDML, WML and VoiceXML simply describe how particular pieces of information are to be handled by a wireless device. Mark-up languages do not define the scope or nature of a mobile application. Nor do they define an industry or a market category. Wireless application developers must pay careful attention to a number of issues when selecting a particular development strategy or development tool. There are a variety of mark-up languages to choose from. Developers creating a wireless user-experience layer face significant technical challenges such as: ■

device, mark-up language and client software proliferation

■

database, network and application integration

■

scalability

■

security

■

push and pull capabilities.

71

Maximizing Strategic Opportunities

MAKING IT ALL WORK TOGETHER Wireless solutions offer significant opportunities to businesses, but these opportunities come with a number of fundamental challenges. Crucial issues that businesses face in implementing a wireless model include: ■

integrating wireless into their existing infrastructure

■

access by multiple wireless devices

■

strategic relationships.

The most crucial aspect in deploying a wireless strategy is integrating wireless strategies with your existing infrastructure. In most cases, wireless applications encompass different types of data resident on multiple systems. Therefore, employing wireless technology often requires interfacing with a variety of systems, including enterprise databases, legacy systems, the internet and content management systems. And because launching wireless applications usually requires interfacing with mission-critical, enterprise systems, it is extremely important that the actual integration process has a minimal impact on existing users of your systems. It is important to integrate aspects of your system that will produce the most robust and scalable applications. Integrating web servers and simply transcoding content for re-use across different channels and devices may offer a quick solution, but it is unlikely to scale up or provide best user experience across multiple devices. Another significant challenge with wireless applications is that there are hundreds of wireless devices in the market, each sporting its own capabilities, features and interface. Developers must have a firm understanding of how devices differ in aspects such as screen size, interface design and navigation tools. However, the sheer number of devices in the marketplace, as well as those in development that will offer even more functionality, makes this process extremely time-consuming, if not impossible. The consequence is poor or non-existent support for many wireless devices. Whilst wireless devices may eventually unite in terms of their capabilities, it is unlikely that they will standardize around basic issues such as screen size, graphics handling and other features that affect the user experience. Instead, wireless device manufacturers will continue to create increasingly better products both to meet the unique demands of new mobile applications and to distinguish their products from competitors. According to Forrester, an independent research firm that analyzes the future of technology change and its impact on businesses and consumers, by 2003 approximately half of mobile users will utilize more than one wireless device.

72

Mobile checklist

Complicating the issue even more is the fact that each type of device could utilize different standards or mark-up languages. The following are the currently accepted wireless standards for internet browsers: ■

Wireless Application Protocol (WAP) with the Wireless Mark-up Language (WML) for browsers on internet-enabled wireless phones;

■

Palm Query Application (PQA) and a subset of HTML for Palm OS like Palm VII;

■

a subset of HTML for browsers on two-way pagers and wireless PDAs;

■

J2ME for internet-enabled phones and PDAs.

This assortment of standards requires developers to understand not only all of the current but also the emerging standards, so they can ensure their applications reach their intended audience and to extend the life of the application itself. For developers to stay on top of the ever-evolving wireless world entails a heavy investment in time and assets. Only then can they maintain a consistent and intuitive experience for end-users across all wireless devices on the market. Most approaches toward wireless solutions today unsuccessfully answer the question all businesses face – how to deploy wireless applications across multiple devices in a cost-effective and timely manner. Yet wireless solutions offer a vast array of technologies and infinite content that should be exploited. Businesses will need to develop strategic relationships with wireless vendors to supply persuasive and practical applications. It is likely that businesses will either: ■

become customers of vendors to obtain access to technology and content;

■

develop partnerships that provide an opportunity for mutual benefit.

In either case, it is crucial to be aware that no single vendor today can meet all of your wireless needs. The vendors themselves purchase or create their own strategic alliance to acquire the products and services that they in turn provide to their customers. Wireless vendor services vary greatly and may include everything from strategic consulting, technology integration and application development to hosting. Products they offer might range from enabling technologies such as development platforms, transaction processing software, synchronization software and location-based services to security. Although different vendors are accountable for each of these technologies, your business may be able to purchase them as part of a bundled package through a single vendor. Another type of strategic relationship might relate to specific content. For example, leveraging location-based technologies goes hand-in-hand with location-specific

73

Maximizing Strategic Opportunities

information. To achieve this combination, businesses must not only partner with a provider of GPS or location-based technologies but also with a provider of mapping information and directions. Launching a successful wireless solution for your enterprise will depend on your ability to develop these types of strategic relationships.

74

5 Implementing mobile solutions

■

Evaluating and selecting the right wireless technology

■

Critical success factors

■

Wireless business requirement checklist

■

Mobile project management

■

Measuring success

77

78 82

86

87

75

Implementing mobile solutions

EVALUATING AND SELECTING THE RIGHT WIRELESS TECHNOLOGY Launching a wireless business solution can save time and money, improve communication between employees, customers and partners, create better business relationships and increase revenues. Harvesting all these advantages means planting the right seeds in the beginning. However, not all wireless solutions are equally suitable. Choosing a wireless solution that does not meet your enterprise’s current and future needs will hamper your organization’s productivity and growth. Future changes to your wireless infrastructure could be costly and time consuming, and business users, IT professionals, partners and customers may have to work harder to counteract any inadequacies. Choosing the right wireless solution, in contrast, will increase productivity, improve communication, allow you to seize business opportunities, strengthen business relationships and increase revenues – both now and in the future. The right solution should include the flexibility and scalability to meet future requirements, as well as serve your current wireless needs. Demographically, consumer and large enterprises present the most potential in the wireless market. The number of wireless data subscribers in small businesses is forecasted to grow from 765,000 in 2000, to more than 7.3 million in 2005, according to Cahners In-Stat. So what does this mean for your business? It means that eventually you will have to evaluate and select a wireless solution that will complement your business needs. To select the right wireless solution for your enterprise, you will need to identify the unique facets of your business in advance, before they present potential problems and become costly liabilities. An example of a unique challenge could be particularly stringent security or reliability requirements. The expectations not just of upper management but also of employees and other partners must be taken into account. What are your users’ expectations? Increased productivity, reduced total cost of ownership, higher return on investment – or is the goal for less tangible but more strategic benefits, such as a better competitive edge? When you have addressed these questions, your company’s IT management can begin the infrastructure planning process. Choosing a wireless solution is a difficult venture. The technologies are complex and still evolving with few accepted standards. Understanding the technical intrinsic worth of competing solutions requires a extensive technical understanding. Wireless solutions are complicated to evaluate because of the variety of similar technologies

77

Maximizing Strategic Opportunities

and lack of standards, which leave much open to interpretation. The demands of implementing a wireless solution can be IT intensive, impacting current IT infrastructure and IT support resources. Because technologies are still emerging, your business will need to avoid purchasing additional expensive hardware or software that will become obsolete before you can attain enough return on your investment. Predicting future requirements is difficult, yet it is vital to choose a solution that will scale up with the company’s growth. The solution you choose must have: ■

Intelligent cache management – allows the infrastructure to employ additional intelligent cache management systems. These systems use advanced algorithms to store routinely used content at staging areas close to the user.

■

Distributed adaptation – an additional layer that allows content adaptation to take place on the network node closest to the content server. Since adaptation typically produces a clipped version of the original content, the resulting file is smaller, and thus provides more efficient wireless device performance.

■

Scalability – a wireless infrastructure must be able to scale rapidly to more content, more applications and more users.

■

Modular architecture – to let you reap the benefits in scalability, but also so that your business can initiate its wireless solution with a modest infrastructure installation, which then grows according to your needs.

■

Integration – your wireless solution should be built on industry-standard technologies that fit in within your existing enterprise infrastructure as seamlessly as possible. This means easily tying into web servers and back-office applications, thus maximizing your existing technology investments.

CRITICAL SUCCESS FACTORS In addition to determining which wireless platform and operating systems to use, you will also have to decide which device(s) to support, which enterprise solutions to enable wirelessly and which wireless protocol to use. Each one of these aspects must be seriously researched and compared to your business model. Industry leaders recommend the following five critical steps for successfully capitalizing on wireless technology. 1

Choose your software. ‘Most wireless software applications and middleware require enterprises to use that wireless software’s API [application program interface]’, says Matt Tripani, executive vice-president and co-founder of Novarra, Inc., a software company that delivers wireless enterprise solutions.

78

Implementing mobile solutions

Because an API is a specific method that a programmer must follow to interface one application to another, API requirements can cause expensive, time-consuming customized projects if they do not integrate well. To avoid this pitfall, select a software application that uses an open architecture that will allow your programmer to install the application in a few hours as opposed to a few months. 2

Choose your carrier. Before you decided on a wireless solution, decide on a carrier, because each carrier has unique qualities. And don’t be surprised if a single carrier does not meet all your wireless needs. Multiple carriers for wireless deployments are quite common. For example, a carrier may have a strong signal coverage in one region but be weak in another. Additionally, you will need to bear in mind what types of wireless protocols each carrier offers. Will you need SMS for text messages, WAP for voice messages and data messages or Cellular Digital Packet Data (CDPD)?

3

Choose your device(s). According to Kevin Bruder, analyst for the IDC Group, ‘Most people want small, light and inexpensive devices they can stick in their pockets and not worry about.’ Determine what types of wireless applications the devices need to support. For some that means web-enabled PDAs, while for another business a WAP handset would cover their needs. Don’t be afraid to deploy more than one type of device throughout your enterprise, based upon your needs. There is no one-size-fits-all wireless device on the market.

4

Choose your application(s). According to Jeff Ross, director of business development at Wireless Knowledge, ‘Less is more. Enterprise applications such as ERP and CRM are high-powered solutions with fancy graphical displays and tons of reporting features. To attempt to migrate all this functionality to a wireless device is bandwidth suicide.’ Businesses should concentrate on those aspects of their applications that are mission-critical to the mobile workers’ success. Offering a portion of your business application’s functionality will increase the wireless device’s performance because it will not demand additional resources such as memory and bandwidth. In addition, the simplicity will help mobile workers to be more organized and access information more quickly because they will have shorter lists to scroll through and can get to their information in fewer clicks.

5

Choose your security. If your wireless plan includes sending private data over the airwaves, such as credit card information, then security is a chief concern. Wireless devices that will be transmitting this type of data can utilize the Transport Layer Security (TLS) encryption protocol. However, additional security can be gained by incorporating your enterprise’s existing virtual private network (VPN). Additionally, wireless devices can be equipped with special authentication features such as biometrics to guarantee that the person

79

Maximizing Strategic Opportunities

using the device is an authorized user (based on the user’s unique physical traits such as a fingerprint or retinal scan). Keep in mind that using encryption requires a considerable amount of bandwidth and thereby will decrease your data transmission speed. The goal with wireless security is to balance reality with the sensitivity of the data being transmitted. Although the future of wireless telephony assures more reliable coverage, more bandwidth and better devices, do not be tempted to hold out for the perfect moment when you might be able to implement a wireless solution with strong security, more bandwidth than wire-line connections, and devices that have high-resolution colour displays and complex graphics capability. By the time wireless technologies such as those become commonplace, you will have missed the boat, thus jeopardizing your business. Transferring large amounts of data or streaming video on wireless devices sounds appealing, but has very little to do with leveraging the power of wireless technology to your enterprise. A wireless utopia is in the future, but the time to take advantage of wireless technology has already begun.

Choosing suppliers and outsourcing options The wireless telephony market has experienced incredible growth, giving rise to numerous carriers, device manufacturers, service providers, developers, solutions, software, applications and integrators. Unfortunately, because of the diversity of the industry, there is no one-stop shop when it comes to implementing an enterprise wireless solution. Instead, choosing the best wireless solution for your business entails an explicit understanding of what the project requires as well as your particular needs. Knowing how the solution works and what it needs to work are crucial. The following aspects must be carefully considered: ■

Wireless device – what type would best suits your needs?

■

Wireless modem – how will you transfer your data?

■

Wireless network – over what network will your data travel?

■

Enterprise software – what specific functionality do you want?

Your wireless solution should be able to handle the devices you currently have – or may have in the future. It should also be able to handle the various wireless networks currently available, including:

80

■

Mobitex

■

CDPD (Cellular Digital Packet Data)

Implementing mobile solutions

■

GSM (Global System for Mobile Communication)

■

CDMA (Code Division Multiple Access)

■

TDMA (Time Division Multiple Access).

Keep in mind that other networks, such as GPRS and EDGE, will also be available in the near future. The raw data rates for today’s wireless networks range from 8 kbps to 19.2 kbps. The solution you choose should be able to optimize and maximize that data transfer rate, as well as provide reliability and security for the data being transferred. With the arrival of enterprise wireless solutions over the past several years, many wireless outsourcing businesses have sprung up, allowing your company to go wireless faster than if you were to launch your own solution internally. However, there are several important issues you should consider before deciding to tackle your own wireless deployment or to outsource the project: ■

Does the solution meet your company’s security needs?

■

Will the solution meet your needs for speed and reliability?

■

Can it leverage existing technology, or will you need to buy special devices or significantly change your corporate infrastructure?

■

Will the solution meet your needs now and in the future?

■

Do you have a need to support multiple devices – will the solution support these devices?

■

Is the solution easy for your technical team to manage and easy for end users to learn?

Choosing a successful wireless solution for your enterprise involves determining what your specific needs are, and ensuring that the solutions you look at will adequately meet these needs. Another important step in determining requirements and restrictions is to form an internal team focused on choosing the best wireless business solution. It is important that all sectors of the organization – especially business users and technical personnel – agree upon a solution and a plan for implementing the solution. If your business requires strict security requirements, specific solutions to your business may be available. Currently, wireless security applications include those that meet the specific needs for the financial, medical and legal industries where security is regulated by a professional body. Whatever your business, your wireless solution should provide an end-to-end security model by creating a secure

81

Maximizing Strategic Opportunities

pipe from the mobile user, through the wireless data network, to the corporate server. For complete security, the system must provide: ■

authentication – proving the identity of the user;

■

authorization – determining what the user is allowed to do;

■

encryption – ensuring the privacy of transmissions;

■

data integrity – ensuring that the information has not been altered.

Wireless security methods are being delivered on top of regular wireless solutions for added security. Before you make any decision, be sure to research extensively the full range of wireless business solutions. Develop a requirements checklist (see below), review product specifications and test products in depth. While this research will require some time and effort, choosing the right wireless business solution will result in gained economic benefits over the long term.

WIRELESS BUSINESS REQUIREMENT CHECKLIST Numerous vendors currently offer wireless solutions and more are entering (as well as leaving) the market every day. Several factors should be taken into account to decide which solution best fits your needs. As a rule, inclusive wireless solutions can: ■

offer access to e-mail;

■

safeguard sensitive corporate information;

■

provide speed, reliability and coverage;

■

leverage existing corporate and network technology – no special devices or significant changes to your corporate infrastructure should be needed to extend wireless access to strategic employees;

■

be scalable for future needs;

■

support multiple existing devices, such as mobile phones, PDAs and laptops;

■

minimize impact on IT infrastructure;

■

be easy to learn and use.

Getting started ■

Determine the number of employees who travel or need access to corporate information away from the office.

82

Implementing mobile solutions

■

Make a comprehensive list of your organization’s operating system(s), mobile devices used currently (and in the future), and messaging system(s).

■

Make a list of locations of mobile employees – this will determine which wireless data network you will use. (If you have multiple locations, your organization may need to use more than one network.)

■

What are your speed and reliability requirements?

■

What are your security requirements and restrictions?

■

Make a list of assets, tools and applications that will need to be available to mobile employees.

■

Check the solution supports the following networks: – Mobitex – CDPD (Cellular Digital Packet Data) – GSM (Global System for Mobile Communication) – CDMA (Code Division Multiple Access) – TDMA (Time Division Multiple Access).

■

Does the solution meet your security requirements?

■

Does the solution meet your speed and reliability requirements?

■

Can the solution leverage existing technology, or will you need to buy special devices or significantly change your corporate infrastructure?

■

Do you need to support multiple devices – will the solution support these devices?

■

Is the solution easy for your technical team to manage and easy for end users to learn?

■

Is the solution designed to maintain connectivity and re-establish dropped connections?

■

Is the solution designed to ensure data integrity through coverage problems, data loss, roaming and other network related issues?

■

Will the solution meet your needs now and in the future?

Key features In addition to the business requirements, you should also evaluate the following key features: ■

Access to critical business applications. To meet business objectives effectively, your mobile employees need to have access to fundamental applications such as their e-mail, calendar, contact list and other applications while they are away

83

Maximizing Strategic Opportunities

from their desks. The wireless device should be simple to use and transport from location to location. ■

Protection of sensitive corporate data. Security in general is a major concern for wireless users; however, network security is of the utmost importance. Wireless providers include basic security, but not to the degree required by many enterprises. A wireless solution should provide end-to-end security by creating a secure tunnel from the mobile user, through the wireless data network, to the enterprise server. For complete security, the system needs to provide: – authentication – authorization – encryption – data integrity.

■

Speed, reliability and coverage. These three integral facets are crucial in your wireless solution. – Speed – your wireless solution should be able to optimize and maximize the data transfer rate, as well as provide reliability and security for the data being transferred. The raw data rates for today’s wireless networks vary from 8 kbps to 19.2 kbps. – Reliability – your wireless solution should be accessible 24 hours a day, seven days a week. Inclement weather, distance and other adverse conditions should not compromise the service availability. – Coverage – transmission and coverage considerations have given wireless a bad reputation in the past, being unreliable for many types of business applications, especially ones that require transmitting large files and maintaining extensive connections. Your wireless solution should supply reliable data transport and be designed to maintain connectivity and re-establish dropped connections. In the event of coverage and connection problems, your data should be protected from loss of integrity despite coverage problems, roaming and other network related issues. For example, if you are running a wireless application and the connection has interrupted the middle of a file transfer, your wireless solution should have the capacity to allow the data flow to be automatically restored as soon as the connection is re-established.

■

Ability to leverage your existing corporate technology and network. A wireless solution that can leverage the mobility of voice, SMS messaging and WAP is more desirable than those that are dependent on a specific device. It should also be able to incorporate wireless devices already in your infrastructure.

■

Future scalability. Even though your wireless solution should be able to handle the various wireless networks available today, such as Global System for Mobile Communication (GSM), Code Division Multiple Access (CDMA), Time

84

Implementing mobile solutions

Division Multiple Access (TDMA) and Cellular Digital Packet Data (CDPD), it should also be engineered to support emerging technologies. ■

Multiple device support. With the vast array of wireless devices on the market today, your plan should include the flexibility to include multiple devices.

■

Integration with current IT infrastructure. Your business’s IT department cannot afford to compromise the stability and performance of corporate systems that are already in place. Your wireless solution needs to be compatible with the existing firewall and the security already provided.

■

Usability. A good wireless solution is one that is self-explanatory and easy for end users to understand.

Cutting through all the wireless vendors’ hyperbole can be confusing, especially so because wireless technologies are fledgling and often unproven. But that does not mean you should not consider new technologies. However, before becoming a wireless pioneer, here are some things to keep in mind: ■

Understand that there are no magic cures.

■

First try a small-scale implementation.

■

Educate your end-users.

■

Be prepared for failure – preparing for the worst becomes easy once you have followed the first three points.

Looking ahead A popular inclusion in the fine print of many wireless vendors’ terms is ‘forwardlooking statements’. Forward-looking statements are based upon management’s beliefs, opinions and projections on the date the statements are made. However, vendors have no obligation to update forward-looking statements if circumstances or management’s beliefs, opinions or projections should change. Today many wireless vendor’s news releases and even marketing collaterals contain forward-looking statements that are based on the vendor’s current expectations and projections about future products and services. They can include statements regarding the ability to support multiple devices and networks interchangeably; productivity and income gain from wireless access; the desire of companies to migrate from simple messaging devices to a more robust wireless platform solution; and the robustness of the mobile platform solution. Actual results could differ materially from those anticipated in these statements, as a result of a number of factors including the risks involved in integrating solutions with third-party software and services and competition with existing and new

85

Maximizing Strategic Opportunities

products offered by competitors. It is crucial to scrutinize any documents this type of statement attached.

MOBILE PROJECT MANAGEMENT Traditional project management has many difficult challenges, ranging from scheduling concerns to the difficulties of keeping team members focused and on track. Wireless technologies can have significant benefits for the project management of a mobile workforce. The ability to co-ordinate projects quickly with far-flung team members is fast becoming one of the most popular aspects of wireless communication and data exchange. Electronic project management systems are integrating wireless capabilities into their core functionality and specialized solutions are now on offer in a number of vertical markets. Mobile project management can quickly assess the impact of changes to schedules and resources. Mobile project management applications can help managers oversee project developments, as well as maintain repeatable development guidelines and rules. Such features help improve efficiency, as well as help companies achieve certification from organizations such as the International Standards Organization (ISO). Other uses for mobile project management via wireless devices include: ■

daily logs and calendars

■

inspections and equipment test records

■

quality-control checklists

■

tracking of materials, including deliveries, installations and balance to deliver and install quantities

■

notices to comply

■

instant status updates

■

safety notices.

There are three main categories of mobile project management applications to choose from: ■

mobile functionality integrated into traditional electronic project management software;

■

mobile project management systems for wireless devices;

■

web-based mobile project management systems with wireless delivery integration.

It is important to keep in mind that adding wireless functionality to your business’s project management system should not require its own extensive project management.

86

Implementing mobile solutions

MEASURING SUCCESS Once your wireless solution has been deployed and overcome the initial bumps and hiccups associated with the launch of new technologies, how can you measure its success? Before you can assess your achievement, you need to assign a metric specific to the results that you want to measure. In other words, to measure success, it is first necessary to define what success means to your business. For example, if your goal was to increase sales force automation, is there a marked increase in sales revenues that can be directly attributed to the use of wireless technologies? Some benefits do not provide hard-number statistics, but they may still be measurable. Does using wireless technology save your business significant time? Does it provide a faster service for your customers? Does it facilitate smoother operations and better communication? While these types of benefits do not have a specific monetary value attached to them, they can greatly improve the overall operation of your enterprise, thus creating intangible value. Regardless of how you measure success, the results deserve intense scrutiny as businesses look for return on their wireless investments. According to a Gartner report, a large percentage of m-commerce initiatives fail as a result of a lack of success metrics, especially in the wireless channels. In contrast, an implementation of wireless metrics will indicate how effective wireless operations are in terms of operations, the customers’ experience and ROI (return on investment). With this information, your enterprise can gauge the success of wireless solutions. Managers should consider carefully the information collected. With a greater awareness of how the deployment of wireless services affects their business, they can initiate precision marketing, effective sales and spot-on service. This is particularly important in an ailing economy, when time, resources or money must not be wasted. The obstructions to analyzing the impact to your bottom line may not always be technology related. Quite often the problem is a lack of interpretation of the data, preventing the enterprise from transforming that information into a better understanding of customer behaviour and defining the right wireless agenda. By Gartner’s predictions, businesses in 2005 will need three times as many employees compared to today to analyze their business metrics. Currently, the demand for analytic talent outweighs supply by at least two to one. Ted Bechman, CFO of Gameplay.com, Europe’s largest online games destination, has a different view about success in the wireless market. ‘It is about domination

87

Maximizing Strategic Opportunities

of space’, he says, ‘rather than the traditional methods of measuring success.’ And becoming dominant in a particular wireless niche is easier than one might think. According to a Forrester survey of 50 European executives, to develop and maintain a wireless-accessible corporate site costs approximately $87,000 – about 6 per cent of the budget for the average European corporate site. Return on investment (ROI) is a crucial factor in any organizational implementation of technology. However, as companies invest in wireless technology, tracking ROI with traditional measures is not enough. Fundamental indicators such as customer satisfaction and loyalty, process efficiency, global connectivity and scalable growth supply a consequential, balanced tally for measuring success. In addition to ROI, a new methodology that measures return on opportunity (ROO) is gaining popularity. Instead of focusing exclusively on the initial costs and the recovery of investment expenses, as with traditional metrics such as ROI, ROO metrics assess and calculate overall benefits, such as increased revenue, market capitalization, new business opportunities and increased customer retention. The most important conclusion is that it is vital to align wireless technology decisions with your enterprise’s core competencies, and then implement the solution in a way that presents the most significant impact.

88

6 Using mobile to change and re-engineer the business

■

Major change opportunities with mobile

■

Case study: CMP Media puts its applications where its mouth is 93

■

Case study: Rural South African doctors implement wireless under extreme conditions 97

■

Case study: Point of purchase payment at sports stadiums in the USA 99

■

Case study: Carlson Hotels Worldwide wireless hospitality 100

■

Case study: Wireless eBay

91

102

89

Using mobile to change and re-engineer the business

MAJOR CHANGE OPPORTUNITIES WITH MOBILE Mobile applications will change the way you do business and the way you live. In the future, two principal factors will unite to drive the mobile transformation: ■

Business mobility will increase. Customers will want any-time, anywhere commerce. Mobile professionals will want easy, reliable one-stop access to their information. However, they do not want to have to purchase another wireless device, which they will then have to learn how to use, carry around and eventually replace when the next generation of technology is available.

■

New technologies are evolving that make wireless business solutions feasible for general business use. IT staff members want to increase their company’s mobile connectivity without adding to the never-ending list of projects, maintenance, support, infrastructure and people. While maintaining the stability and performance of corporate systems already in place, IT will choose a scalable, secure, reliable wireless solution that can be generally deployed.

Organizations are becoming more and more reliant on information in order to be competitive – going far beyond a simple Rolodex or file folder in a filing cabinet that would have sufficed several years ago. Now the critical information resides on the corporate network in the structure of applications, tools and knowledge. In addition to this digital paradigm shift, people are spending less time in front of a computer and more time out using wireless technologies. A wireless impasse, however, is becoming apparent. Employees want the technological tools available to them, but the organization may be slow to respond to emerging technologies in the current economic climate. Despite the tightening of the corporate purse strings, a wireless business solution can still be a sound investment because it gives employees access to the information they need to do their jobs more efficiently. More efficient employees equals a more productive business. Measuring the effect of increased productivity includes better customer satisfaction, better business relationships and increased sales. Thus developers appear to be moving forward with their projects. A CMP survey in 2000 of 550 software developers worldwide revealed that they will be devoting more time to developing new wireless applications. Indeed, 60 per cent already had wireless applications in development that would be deployed within the next six months. According to the survey, the areas for wireless application development were led by e-mail, followed by instant messaging, m-commerce and locationbased services. The wireless device with the most applications in development at the time of the survey was the wireless telephone, followed by PDAs, wireless modems and wireless LANs (see Figs 6.1 and 6.2).

91

Maximizing Strategic Opportunities

Fig. 6.1

Leading areas for wireless application development (percentage in development across the wireless industry)

Location-based services

33.9

M-commerce

37.7

Instant messaging

39.1

E-mail

49.4

Source: MBusiness

Fig. 6.2

Devices with applications currently in development (percentage in development across the wireless industry)

Wireless LANs

Wireless modems

PDAs

Wireless phones

Source: MBusiness

92

27.6

37.8

57.4

58.6

Using mobile to change and re-engineer the business

Regardless of the wireless business solution you select, that solution should be able to increase productivity and take advantage of more business opportunities while leveraging your existing technology. With instantaneous access to data, downtime turns into valuable time. And with communication and collaboration spontaneously happening anywhere, any time, employees can respond faster to customers, suppliers, partners and colleagues. Furthermore, your enterprise has already invested a great deal in strategic applications on your corporate network, hardware, software, integration and training. Being able to take advantage of those resources is an obvious economic advantage.

Case study

CMP Media puts its applications where its mouth is Manny Sawit, the group director for CMP Media’s Internet and Mobile Group, suggested to Bridget Hart, events co-ordinator, that she should create a mobile application for attendees of Web2000 (a trade show for web developers and designers). Hart’s first response was: ‘That’s really cool, but I produce conferences. Developing mobile software is not my forte.’ In retrospect, Hart was representative of today’s wireless planners, who in this undeveloped field are coming from the managerial side of the business and receiving little IT support. As show director for Web2000, Hart already had a full agenda. The lack of practical experience with mobile devices created apprehension. But the more she contemplated the idea, the more she accepted the opportunity both to present a uniquely convenient application and to experience the same type of development tribulations as the conference audience. By the time Web2000 opened at San Francisco’s Moscone Center, Hart had developed an alliance with software providers Centura Software and Handango to loan attendees (with the option to buy) 350 Palm Vx Limited Edition wireless devices preloaded with a intelligent ‘matchmaking’ application that helped attendees with similar interests to locate each other and network. Equipped with wireless modems, these devices were loaded with other useful applications, including e-mail, an interactive conference guide with mapping, San Francisco city guides, traveller’s aids, expense tracking and stock quotes. Unfortunately, as ideal as Hart’s plan sounded, the road to success was still rocky. Hart and her team had to overcome several major technical difficulties. Hart chalked these difficulties up to the same common mistakes many wireless development projects routinely encounter: disconnection between ideas and reality, the technical compromises and the unforeseen barriers. Overseeing the development of her company’s first wireless application took Hart nine labour-intensive months. Without an internal team and no time budgeted for the project, she quickly learned that setbacks and workarounds were a natural part of the process.

93

Maximizing Strategic Opportunities

Although trade shows commonly provide software freebies, Hart was determined to provide the attendees with useful tools that would create a memorable show experience instead of another gadget for them to set on their desk. Hart went to work on a list of potential applications: ■

Global Positioning System (GPS) capacity for people to navigate the show floor with exact locations to vendors’ booths.

■

The capability to exchange wirelessly contact information between devices.

■

An electronic evaluation form for conference seminars.

■

An interactive conference directory.

However, her most innovative concept came from an alternative source: the Cybiko, a wireless Japanese toy that lets users within 6 metres of each other establish spontaneous networks and exchange e-mail. The technology allows users to build individual profiles and match them to others to establish similarities. Hart harnessed that capability to facilitate attendees to locate people with mutual interests. Hart believed if she deployed her own profiling questionnaire at the conference, attendees could connect with others who had similar concerns and send instant messages to arrange a personal encounter. When Hart posed her ideas to potential developers, she was quickly introduced to the world of reality versus vision. The first issue was that the current GPS systems were not functional in an indoor setting because of the structural features of the convention centre – thick concrete walls, steel beams and massive roof. The wireless seminar evaluation system was also deemed unfeasible, despite the fact it would save the Conference Group hours of input if attendees could wirelessly transmit their information directly into the database. An application of that magnitude and functionality would have cost Hart several hundred thousand dollars. With two of her ideas already rejected, Hart concentrated on the matchmaking application. Unfortunately, the game maker did not want to enter into custom application development, so that idea, too, soon vanished. Hart’s next challenge came about from her unfamiliarity with the costs associated with application development. Approaching several companies for informal estimates left her with a huge price tag of six figures for a single, basic application. Frustrated that her project was floundering before even getting off the ground, Hart made a step forward with Centura Software, one of the first companies to which she had spoken. As an enterprise solutions developer, Centura wanted to move into the wireless arena. In exchange for the opportunity to showcase his company’s wares to an audience of internet professionals, CEO Scott Broomfield traded the hefty development fees for the publicity, as did a number of other vendors in the early days of wireless launches. Hart would not be so lucky if she were attempting the same deal today, since this practice is becoming extinct with the proliferation of wireless applications. Hart was ready to get the ball rolling until she saw Centura’s proposal. Despite being based on an exchange for advertising and promotions, the overheads were higher than Hart could

94

Using mobile to change and re-engineer the business

accept. She began looking for other partners and, like many who have outsourced development for financial reasons, she found herself swimming with sharks. Based on her experiences with outsourcing, Hart warns:

Make sure that you’re dealing with people who can do what they say they’re going to do, Not just a company that consults and says, ‘Oh, by the way, we also have this new mobile arm, because there’s these two guys, you know, a developer, and a lead tech guy’. You need to find organizations that have depth.

Hart was back to square one. Fortunately, Centura came back and offered Hart a better proposal. Centura’s job was then to build the matchmaking application and to combine it with off-the-shelf software into a customized suite named the Web2000 Application. Hart’s next major challenge was managing a technically complex project. ‘To have me talk to the technical people directly was not a good match because we weren’t speaking each others’ language’, says Hart. ‘They would get frustrated with me, and I would get frustrated with them.’ To resolve this issue, Hart designated a technically savvy intermediary to deal with the developers. Because the convention centre had its own cell tower and because Hart’s goal was a user experience that reflected reality, the wireless devices hooked up using the Cellular Digital Packet Data (CDPD) protocol, the most widespread wireless data transmission standard in the USA. Furthermore, the application was designed for the Palm OS. Hart opted for PDA rather than a telephone platform to take advantage of the larger screen size. Graphical applications such as the show floor map would have been impracticable on anything less than a 160160 pixel screen. By putting the wireless devices with preloaded software in the hands of users, rather than simply offering a downloadable bundle for those with devices of their own, Hart added to the reality of the experience for the attendees. However, that decision meant acquiring hundreds of PDAs and wireless modems as well as licensing the third-party applications to be installed into the Web2000 package. Again, Hart was faced with what she thought might be an insurmountable task. Not scared from her previous outsourcing experience with her project, Hart and Centura together approached the largest handheld software publisher, Handango, to manage these logistical tasks. Handango accepted a trade agreement similar to the one Hart had arranged with Centura. Additionally, Handango would receive all the profits from selling the loaner devices to the attendees who wanted to keep the PDA. ‘The goal was for the customer to pick up the device, turn it on and have it work – and there’s a lot that has to go into that,’ says Handango’s vice-president of product management, Clint Patterson. ‘The software has to be loaded, the device has to be charged, the modem has to be charged, the wireless service has to be provisioned.’

95

Maximizing Strategic Opportunities

The next hurdle came when Hart wanted to use the orange Handspring Visors for the wireless device, to complement the conference’s colour. Unfortunately, the only available cellular modems for the Visor were not yet in production, so she ran the risk of the devices not arriving in time. To guarantee availability, Hart went with the combination of Palm Vx Limited Edition and Novatel Minstrel V wireless modem as the hardware platform. This was not without sacrifices. Hart also lost the peer-to-peer networking feature with her new choice. She recalls:

One of the things that I wanted was that Cybiko function, where it would give you an excuse to walk up to someone and say, ‘Hey, let’s beam, let’s match’. The idea was to exchange profiles and decide how many stars of a match you were. But we couldn’t do it, we found out, because [on a Palm], you can’t beam as you wirelessly connect on the modem at the same time.

The Visor could have transmitted while connected, but with the risk of late shipping of Visor modems, the project could have ended up a total disaster, having no wireless applications at all. Once again, Hart compromised. The trade off was instead of people being able to point their Palms at each other and beam to see if their profiles were similar, they would only get a list of people who matched and, if they liked, trade messages on a server-based message board. Although Hart still got her matchmaking application, its coolness factor had been diminished. The next challenge to be tackled fell into Handango’s territory. Hart set the device limit at 350 Palms, but Handango knew that that would still be too many connections for the single low-power cell station built into the convention centre. Its solution was to have the wireless carrier assign a second channel that raised the signal to those two channels. Without the peer-to-peer beaming or GPS functionality, and with the main hardware decisions made, Hart concentrated on the matchmaking application. Knowing the application could not be dependent on a continuous wireless connection, such as a WAP application, Hart needed both the data and the user interface to be updated continuously via connection to the host. Unfortunately, the CDPD’s 19.2 kbps speed would seriously damage the performance. Once again, it was Centura that came to the rescue. By engaging distributed mobile computing, where both the application and its data are split between the wireless client and its server, the application’s performance over CDPD was acceptable. With distributed mobile computing, the data and functionality could reside either on the remote server or on the wireless device. In the matchmaking application, the database of attendees would sit on the server, while the shortlist of matches and the simple user interface would reside on the wireless

96

Using mobile to change and re-engineer the business

client. However, the interactive show guide application, which included a zoomable map of the show floor and a dynamic schedule, would be for the most part based on the client. Also loaded on to the wireless handhelds were local travel guides, a travel and expenses application, MultiMail 3.1 (which is the de facto handheld e-mail client for wireless devices) and a copy of Blogger Wireless Edition (a web application allowing users to post quick messages to impromptu web communities). Hart had her first look at the matchmaker application two weeks before the show. ‘It was amazing to see it working for the first time’, she says. ‘I was so impressed with the way it turned out. It exceeded all my expectations.’ One surprise she had not expected was the logo Centura had incorporated into the Web2000 Application splash screen. Its removal was the last tweak to the application. All Hart’s hard work paid off when show attendees’ reaction was for the most part overwhelmingly positive. ‘Experiencing the power behind this application has led me to start thinking about how my company might benefit from using similar technologies in the future’, says Corey Josephs, a web developer at the National Marrow Donor Program. Hart had achieved her goal of planting the seeds of the many uses of wireless into the minds of IT professionals. However, while the reception to the applications and the wireless devices was warm, the purchases of the hardware/software bundle were cooler, with only a fraction paying $900 for the package. In the next version of Web2000 Hart plans to include features that were cut because of budget and time constraints, such as positioning technology or beaming capability. By accepting the limitations of the technology, Hart learned to concentrate on how the strengths of the technology would integrate with mission-critical needs. As she admits: ‘You start out any project by brainstorming, and everyone is full of ideas. You don’t know what the limitations are, so it’s pie in the sky.’

Case study

Rural South African doctors implement wireless under extreme conditions On the eastern side of South Africa, in the rural area of Transkei, weeks might elapse between the time a villager tested positive for a disease at a local clinic and the time treatment actually began. But thanks to a wireless application developed to connect two public-health agencies and three laboratories using Short Message Service (SMS), test results can now be wirelessly sent to six clinics in the region and speed up treatment times. Now doctors and nurses obtain patients’ lab results the same day the tests are completed and can initiate treatment immediately, instead of letting the patients return to their villages and risk further spreading the disease.

97

Maximizing Strategic Opportunities

Conceived by South African application developer ExactMobile in partnership with the Eastern Cape Department of Health, which operates the clinics, and National Health Laboratories, which is in charge of the labs, the project has prevailed over the lack of communications infrastructure that is common in remote areas such as the Transkei. In addition to assisting public health, the project demonstrated the viability of using rural communities as test beds for wireless applications with a negligible investment. Although ExactMobile donated its services, software development costs were only about $1,250. The reward for its support is that the Eastern Cape Department of Health is actively requesting funds from the South African government to implement the ExactMobile application to additional clinics and labs in rural areas. The Eastern Cape Department of Health’s goal was to improve communication between rural clinics and the National Health Laboratories facilities that manage the clinics’ test results. Healthcare professionals treating patients are stationed in clinics throughout the Transkei region, but medical transports visited the laboratories only every week or two, so medical staff at the clinics waited weeks to get test results. The Department first focused on tuberculosis (TB) because of the disease’s highly contagious nature. Doctors treat approximately 15,000 cases each month in the Eastern Cape, with a cure rate of about 50 per cent. The cure rate was even lower in the Transkei region because of its isolation. TB treatment would not commence without a positive lab result diagnosing the patient as infected. Before the launch of the wireless application, laboratory services to rural areas were almost nonexistent and depended on sporadic transport to and from the clinics. To transport the sample to the labs on a daily basis, the South African Institute for Medical Research donated motorcycles. As soon as laboratory personnel entered results into a computer, the application automatically sent them via SMS to a cellphone, donated by Motorola, carried by a doctor or nurse in the outlying clinic. The arrangement of motorcycles and the wireless application cut the delivery to get lab test results from weeks to hours. In the first three months of the wireless implementation throughout six clinics, the number of samples submitted for TB testing increased by 333 per cent, compared to the threemonth period before the project began. Now that clinics can get results faster, they can treat more people and slow the spread of disease. The National Health Laboratories and the Eastern Cape Department of Health want to extend the project and introduce new functions, such as diagnosing AIDS and HIV infections. Additional advantages of wireless devices could be used to prescribe medications and transmit x-rays. There is also the prospect of a single national database of lab test results, from which reliable national statistics could be accessed. This functionality would be greatly facilitated by the distributed access made possible by wireless data communications technologies. Despite the success of the Transkei project, difficulties remain. Emerging data technologies like General Packet Radio Service (GPRS), which may actually reduce costs, will not be available in the Transkei region until 2004. In the future, rural health care will utilize more

98

Using mobile to change and re-engineer the business

wireless options and has the potential to develop into a viable market for corporations, but only if costs go down and bandwidth goes up. Current costs of 550–850 rand (about $75–100) per month need to go down to US-like levels of 250–400 rand (about $30–50), and bandwidth needs to increase from the current 9.6 kbps throughput levels to 2.5G’s 64–128 kbps. Ironically, despite these hurdles, countries with largely rural populations like South Africa may have a head start on more developed countries in terms of the access to wireless services in rural areas. The lack of infrastructure lets these countries move directly to wireless, bypassing traditional technologies.

Case study

Point of purchase payment at sports stadiums in the USA Wireless data services are allowing Volume Services America to accept wireless credit card transactions at a number of sports stadiums throughout the USA. Wireless point-of-sale (POS) is becoming an accepted standard for transaction processing. Volume Services America showed an early interest in both the speed and mobility provided by wireless transactions. It quickly realized how this new technology could increase its revenues because more transactions were able to take place in the same period of time, and also because wireless terminals have lower transaction costs associated with them. Even more important, real-time card authorization enables merchants to increase their merchandise assortment to include more expensive items. For example, sports teams can now sell $500 logo leather jackets alongside $20 caps. And real-time credit card authorization has reduced the number of fraudulent transactions that were previously accepted. The portability of the wireless terminals also means that merchants can track sales information more accurately, based on location and event. Wireless processing and data transfer has enabled every merchant (and merchant services provider) to receive and immediately use information about their sales activity. Internet access provides the reporting of transaction activity in real time – merchants can go online for comprehensive, up-to-the-minute information. The extent of information available helps merchants improve profitability by adjusting inventory levels, adding staff at peak times and improving customer service. Another significant advantage is the ability to reconcile statements at any time compared to only at the end of the month before the wireless system was put into place. Yankee Stadium has been using wireless point-of-purchase since the start of the 2000 baseball season, with two terminals at mobile souvenir trailers offsite. Sales have increased since the introduction of the wireless system and the stadium plans to purchase more terminals in the future. The biggest benefit of wireless point-of-purchase is the no-risk factor.

99

Maximizing Strategic Opportunities

Wireless point-of-purchase enables a credit card to be authorized right then and there, which decreases the amount of fraud. Volume Services uses a neutral Synapse platform that provides a seamless interface to its existing system. Merchants can trace purchases, returns and voids by terminal as they occur. They also have the ability to download information into a spreadsheet or other format for accounting, inventory or other business applications; analyze trends over time by dollar and transaction volume; and review historical merchant growth and statistics. All this data is captured by combining transaction processing with wireless data transfer with the internet, through Synapse. The platform connects hardware, carriers and processors and provides communications protocol conversion, message reformatting, data capture and analysis, online reports, terminal activation and remote diagnostics.

Case study

Carlson Hotels Worldwide wireless hospitality Carlson Hotels Worldwide is a global hospitality company, with over 720 hotels located in over 64 countries around the world. It is part of the Carlson Companies, a global conglomerate that operates in 140 countries and has nearly 190,000 people employed under its brands, which include the Carlson Leisure Group, the Carlson Marketing Group and the TGI Friday restaurant chain. Carlson has deployed the Compaq iPAQ to give corporate staff, hotel operators and owners instant access to critical information in a mobile, wireless environment. According to Michael Murphy, director of IS support services for Carlson Hotels:

The real driving force behind the project was to get information into the hands of frontline people so that they can make timely decisions – for example, optimizing room rates in a tight market. Now they can make those decisions almost instantly using information viewed on the Pocket PC devices.

Over the past several years Carlson has made a $20 million investment in its back-office and reservations systems to enhance its level of service at every hotel under its large corporate umbrella. These systems contain vital information, such as yield management and room status. However, because they required desktop access, their power was limited for hotel managers who prefer to be on the floor of their properties, interacting personally with guests. To provide managers with greater mobility while retaining access to important business information, Carlson began by deploying about 150 Microsoft Windows Powered Pocket PC Compaq iPAQs. The devices provided Carlson’s field managers with more than just access to static information – they delivered real-time business intelligence that let field managers

100

Using mobile to change and re-engineer the business

spot trends. The next step was to deploy the wireless access to Carlson’s hotel operators and owners, giving them access to information in real time instead of weeks. ‘The application, dubbed Mobile Access for Carlson Hospitality, or MACH-1, was designed to get managers out from behind their desks and talking to the customers’, says Michael Murphy. He explains the reasoning behind the project:

In the mid-1990s we made a commitment to be a more customer- and owner-focused operation. This entailed shutting down some remote sales offices and using technology to put information such as sales, operations and key account profiles into the hands of field personnel so they could spend less time on paper work and more time with their customers. Going forward, we wanted to drive that next level of performance to the front desk and hotel managers, giving them access to the information stored on our reservation system in Omaha, Nebraska. In the past, it took anything from a week to a month for them to get reports with the information that formed their decisions. The real driving force behind the MACH-1 project was to get information into the hands of frontline people so that they could make timely decisions – and to focus on managing for optimum performance rather than monitoring past history.

The MACH-1 application has changed the way Carlson does business. Now there is less reliance on static monthly or even weekly reports because people have access to MACH-1 for their business information. Carlson selected the Windows for Pocket PC software as the platform for its mobile software because of its multi-tasking capabilities, the application compatibility with the corporate environment, the ability to record sound and the inclusion of Microsoft Internet Explorer for the Pocket PC. As Murphy says:

From a design perspective the use of Internet Explorer is key to compatibility with our intranet. Colour is also an important aspect of the application because we can use colours such as green, yellow and red in our alerts to managers on the floor, letting them instantly understand the urgency of a situation.

Carlson has been implementing the MACH-1 programme in a multi-phase rollout, beginning with senior management and field sales representatives. The initial phase, which involved about 150 staff members, harnessed infra-red connections on the devices to synchronize with back-end systems. MACH-1 Hotel, which also provided property management information, was rolled out in spring 2001, with up to five Pocket PC devices distributed in each hotel. Carlson selected the Compaq iPAQ 3630 and 3650 models for their elegant design as well as for their flexibility.

101

Maximizing Strategic Opportunities

Using the iPAQ PCMCIA Expansion Jacket lets Carlson managers using the MACH-1 implementation to use wireless communications like the IEEE 802.11 and Bluetooth standards to access the corporate intranet. Tom Nalley, senior director of application development for Carlson, says the MACH-1 application communicates with an Oracle database on the back end, which contains over 200,000 rows of information on all of the company’s hotel properties worldwide. Managers can download room, revenue and other information that is specific to the properties under their supervision. Carlson’s wireless solution has thus already begun to provide better service for its customers and performance enhancement to their hotel managers.

Case study

Wireless eBay With approximately 35 million registered users and a quarterly value of goods traded of over $2 billion, eBay is the world’s largest online marketplace. It is a truly diverse and global marketplace, with country-specific sites in the USA, UK, Canada, France, Germany, Japan, Australia, Italy and Korea, and users representing 150 different countries. The company receives 3.5 million average daily unique visitors and it hosts approximately 100 million items per quarter. eBay identified wireless users as its next growth area and set out to reach and serve this growing global market with an anywhere, any time service. eBay saw a chance to increase customer allegiance and reach by presenting enhanced expediency and control to its users through an inclusive wireless solution. This tactic would provide eBay’s customers with the choice of accessing the site from their preferred wireless device, thereby maximizing user satisfaction and retention. Morever, wireless access could potentially have a central role in increasing eBay’s global reach. In most international markets, wireless penetration exceeds PC penetration. A wireless solution would broaden eBay’s user community to an even wider audience. Finally, wireless technology would permit eBay to generate more effective marketplaces around the world – markets with a greater number of participants who all have the capacity to access constantly and take action according to the information provided. eBay had very rigorous standards for its wireless solution. Ideally, the solution had to be scalable to keep up with increased transaction volumes as the wireless market expanded. Second, the solution had to be exceptionally reliable, as service interruption would be costly to customers and damaging to the brand. ‘Our user base depends on eBay to function 24/7’, says Todd Madeiros, director of business development and eBay Anywhere. Finally, due to eBay’s international development plans, the solution had to support all domestic and international browsers, mark-up languages, protocols and devices. eBay’s goal was to work with a single provider that could supply the entire range of wireless applications – WAP, CE (consumer electronics), Palm, RIM, SMS, etc. – in an optimized

102

Using mobile to change and re-engineer the business

approach. As Madeiros explains: ‘We wanted one provider to ensure that the user experience was uniform in all media’. eBay did consider developing its own wireless solution. But after careful research, it recognized that the wireless industry and associated technologies were rapidly changing, so it decided to focus on its core competencies and outsourced the solution with 2Roam. 2Roam is a company dedicated to wireless internet technology, so it could deliver a complete solution that fulfilled eBay’s wireless criteria. Before making its final choice, eBay thoroughly researched numerous wireless solution providers. ‘We found 2Roam to be “best of breed” – the only provider that offered a complete end-to-end solution that fulfilled all our technology requirements and met our business objectives of establishing a useful service for eBay members’, states Madeiros. eBay also set up strategic relationships with Sprint PCS and AT&T Wireless so that it would be highlighted in their wireless portals. For eBay’s site to function properly in these portals, it had to conform with the diverse design requirements of both carriers. Through 2Roam, eBay site producers had the ability to define content, organization and navigation for each type of device, to guarantee the best possible user experience. Additionally, 2Roams’ adaptable XML architecture ensured that content and services would be readily accessible on all wireless devices. According to Madeiros, ‘It’s important that we can give our customers a consistently high quality experience, no matter what device they choose to use.’ 2Roam leveraged multiple aspects of eBay’s online site to model a persuasive wireless experience. On 22 May 2000 eBay Anywhere was successfully launched. The wireless services have proved to be extremely popular. Wireless users can register with eBay, check My eBay personalized content, view Featured Items and browse through eBay’s site. Customers also have the capacity to search for items of personal interest, access up-to-the minute bidding information and place new bids. The solution is working successfully and customers seem to truly enjoy connecting wirelessly to eBay. After the first successful launch, eBay contracted 2Roam with the international extension of its wireless service. To date, eBay has launched its wireless sites in 18 different countries. Thus through 2Roam’s technology and knowledge, eBay has expanded its wireless solution around the world, providing its members with the ability to access its marketplaces instantly at any time, anywhere and from any wireless device.

103