By Dan Briody, Mon Nov 26 00:00:00 GMT 2001
In today's tight fiscal environment, wireless technologies are able to give companies the returns they need.
If you've recently strolled by your chief information officer's desk, only to see him red-faced, veins bulging, screaming into the phone "SHOW ME THE MONEY," you're not alone. This seemingly greedy motto, made popular by Tom Cruise in the movie "Jerry McGuire, has become the rallying cry of the embattled information technology worker, struggling to justify spending during times of economic uncertainty.
And when it comes to wireless solutions in the corporate environment, most companies aren't interested unless it a) makes money, b) saves money, or c) increases productivity. There is no shortage of products that IT managers can employ when mobilizing their workforce, just as there is no shortage of questions they face in evaluating those technologies.
To top it off, the wireless industry landscape is still changing very rapidly, and decisions made today may very well prove to be instrumental five years from now. Nobody said this was going to be easy. So strap in as we take a bird's eye view of the challenges, solutions, and benefits of mobilizing the workplace in 2002.
What employees want
Historically, employees have always wanted more than management was willing to give them. This dynamic remains consistent when it comes to wireless in the enterprise. If it were up to employees, we would all be running around with the latest cell phones, wireless modems on our ThinkPads, Blackberry pagers, and wireless LAN connections in the office.
Alas, the world is unfair, and employees aren't allowed to decide which wireless services they can use. It's a cruel irony, given the fact that we are all constantly exposed to the latest mobile technologies. Five years ago, mobile workers represented less than 10 percent of the total workforce, but today that number is 30 percent and climbing fast. Wireless envy is rampant.
But wireless devices, through the convergence of cellular data networks and the mobile computing market, are becoming more integral to the everyday business productivity of workers. In this case, as it turns out, what's good for the employees is good for upper management, and company executives are catching on.
What management wants
Besides the stylish brown trucks and clean-pressed brown uniforms, the key to UPS' success is the wireless tablet devices the sartorial-challenged delivery men carry on their rounds. Though UPS and FedEx have been using wireless connectivity for years to add productivity to their workforce, the trend is just now starting to hit other fields.
Insurance claims adjusters have learned that with a customized application, and a wireless handheld, they can assess a claim and cut a check on the spot, while still at the scene of an accident. And stockbrokers have seen the benefits of wireless trading applications that never leave their side.
The affect of these conveniences has been astonishing. Studies have shown that employees work 20 percent more when given the means to work anytime, anywhere. People get hooked on their phones, their laptops and their handhelds. And workers feel liberated if they don't have to sit at a desk all day. Now that's showing them the money.
Companies needing any further convincing should take note of a recent study done by Ipsos Reid, a market research firm. The study focused on users of the popular Blackberry pagers, and aimed to show the return on investment that users realized. The results were jaw-dropping.
Of those interviewed, 93 percent said the Blackberry device had been able to convert downtime into productive work. And 59 percent of the respondents indicated that they were able to recover more than thirty minutes a day of downtime. For a worker that makes $50,000 a year, that translates into a savings of $5,521.
The quality of life improvements were even more impressive. More than 90 percent of those interviewed said that Blackberry had improved their quality of life. Those are figures that are difficult to translate into dollar savings, but certainly something that every enterprise strives for.
But that's not all. For that same employee, making $50,000 a year, the return on investment of a Blackberry is...are you ready for this?...1,587 percent. And that takes less than a year to recoup. Blackberry is just one example of how wireless technologies show companies the money.
Quantifying the value of these changes is almost impossible. How does one calculate the return on investment of happy employees? Or the cost-savings involved with a dedicated workforce? Upper management has already seen the benefits, and need no further convincing.
Supply meets demand
While killer apps may not have emerged yet on the consumer side, the corporate world has already embraced the mobile enterprise en masse. Besides email, which appears to be the bare minimum for any wireless corporations, companies are offering wireless versions of their most popular applications. And these really are killer apps.
Oracle has even created a new division, OracleMobile, for its wireless efforts, which include its Field Service Application Suite. The software allows field service agents to access database information, communicate with headquarters in realtime, and complete and close jobs on the spot, all using a Palm, laptop, or any number of WAP enabled phones.
Enabling employees to access the same applications that they are accustomed to at the office from the field is what wireless corporations are all about - at this point at least. Oracle competitors are onto the mobile scent as well. With SAP's mySAP Mobile Business, the company is going right after the same market of field force professionals that OracleMobile is targeting. Count Microsoft, Siebel, and PeopleSoft among the other big-time software providers that are in the hunt as well.
But outside the world of sales-force automation, mobile databases, and wireless customer relationship management software lies the rapidly developing start-up market for wireless applications. Some companies, like Seven and Amdocs, aim to provide billing and customer care solutions to wireless providers, so that the providers can then offer those services to their business customers. In reaching the largest business customers, these startups have to go through the service providers.
Then there are the companies that are working to make an enterprise's existing applications mobile. Xora and Everypath are two examples of applications companies that work with a company's application base to provide more mobility to its workforce. But no matter what applications you have, you can be sure there's a way to make it mobile.
By 2006, it is expected that 40 million workers will be wirelessly enabled, according to Ovum, a market research firm. Those 40 million will be spending $29 billion on wireless enterprise solutions, including wireless application, wireless LANs, and any number of devices. Clearly there is a fantastic opportunity for businesses aiming to capitalize on this market. And the market is not wanting for competition.
Wireless operators are still sitting in the catbird seat. Carriers are expected to command an $18.6 billion piece of that $29 billion pie. And data traffic will account for 82 percent of those revenues. Most software, services, and device manufacturers will have to go through the carrier before they get to the enterprise. Software revenues for wireless enterprise applications is expected to grow to more than $10 billion by 2006, a five-fold increase from today. The numbers are stunning.
Capitalizing on the opportunity will be harder than it sounds though. Many of the software companies are pitching their wares to wireless carriers who are already overburdened with debt after a spending binge on 3G spectrum. And the expected delays in 3G mean that application start-ups that were counting on the high-speed networks to make their software relevant, are running out of money fast and furious.
Still, when opportunity knocks, the capitalists answer the door. North America, Western Europe, and Asia-Pacific are expected to account for a whopping 77 percent of the total growth in wireless enterprise technologies. And of that, the U.S. and Canada are expected to pull down 40 percent of that growth. Most of that is because the U.S. has so much catching up to do as compared to Europe, which has simply runaway with the wireless race.
This nirvana of wireless enterprises is not without its potential failures however. There are number of possible obstacles to the stellar growth of mobile corporations, any one of which could have a serious impact on the development of wireless services.
Certainly the most crucial element of the wireless pie is the success of 3G. For years people took the advent of 3G services as a given, part of the natural evolution of the wireless network. The extra bandwidth will allow data speeds that make corporate applications truly useful.
3G would deliver us from the black-and-white world of sports scores and stock quotes: cute applications for consumers, but not quite ready for enterprise levels. But 3G has gotten off to a rocky start. After several of the first trials of the technology, both in Japan and the U.K., were delayed, analysts began to speculate that all the hype surrounding 3G was unwarranted. Some went so far as to say that 3G would be a colossal failure, like that of high-definition TV: a neat technology with not market.
3G certainly has some stormy seas ahead, but in all likelihood, the technology will reach the market and in fact be a success. The bandwidth gains alone make it worth the risk for carriers. And once users get a taste of broadband wireless, they'll wonder how we ever lived without it.
Another possible roadblock to the wireless enterprise is the wireless carriers themselves. After overspending on 3G spectrum, many wireless carriers are in danger of bankruptcy or insolvency. The result of this shaky financial situation is that carriers will be loathed to take the necessary risks in developing business models that suit corporations. They also won't be willing to make the investments in new applications and services that businesses need.
Wireless service providers are acting as incubators in the race to get compelling mobile applications to business customers, and without their continued investment, those applications will take longer to come to market. Fortunately, they seem to be aware of this, and are doing everything short of begging for spare change at bus stations to get the money necessary to fund these activities.
Proud Jerry McGuire
Ultimately, the wireless enterprise is going to move forward no matter what, and working will never be the same again. The days of working 9 to 5, chained to a desk, are over. And the productivity gains, money saved, and even new revenues generated from wireless enterprises are changing the question from whether to mobilize your workforce to how to mobilize the workforce. When it comes down to it, wireless enterprises show enough return on investment to make Jerry McGuire proud.
It's Mobile Corporate Week on TheFeature. Learn why, when and how corporations are mobilizing their business processes.
After failing miserably at every attempt to become the next great American author, Dan Briody settled in San Francisco and started writing about the technology revolution in the mid-90s. One bubble and two recessions later, Dan began writing for Red Herring magazine, the ultimate chronicler of the rise and fall of Silicon Valley. Like most other tech journalists, Dan headed back to the harsher climes of New York City when the Internet bubble went pop. Today he is the author of Red Herring's Wireless Watch column, and he is still trying to write the great American novel.