Still Trapped in the Ozone
It must overcome glitches, cost, and cultural resistance
Cover Story: Information Technology Annual Report
Wireless data was supposed to be the next big thing in networking: Over nothing but thin air, mobile workers could relay E-mail, purchase orders, and inventory reports as if they were deskbound. The idea is as good as ever, but the reality hasn’t caught up. At General Electric Co., for instance, only 5% to 10% of the wireless communications budget goes for data; the rest is for voice. Jerry W. King, GE’s manager of telecommunication technology, says that most workers don’t need moment-to-moment access anyway. Asks King: “How does the salesman really work, as opposed to this ideal the technologists have of checking your E-mail every 15 seconds?”
King and others say wireless data networks cost too much, don’t offer universal coverage, and don’t mesh well with their wired data networks. The result: Yankee Group Research Inc., a Boston consulting firm, estimated last year that only 1.2 million Americans used any form of mobile data network. “We were naive to expect that it would take off immediately,” says Roberta C. Wiggins, Yankee’s research director on wireless mobile communications.
There’s hope in the air, though. Suppliers of wireless data networks realize the deficiencies of today’s systems and are working hard to eliminate them. Wiggins predicts that in two years improved wireless data offerings will begin to reach a mass market. In fact, Yankee forecasts that the number of U.S. customers will rise to 7.3 million by 1998.
OLD HABITS. Still, venturing forth with wireless data today requires careful planning. Wilson Sporting Goods won high-tech brownie points and even made a magazine cover for equipping its sales reps with laptops that linked up with Chicago headquarters via Motorola Inc.’s Ardis Co. wireless data network. But around six months ago, it went back to wired connections. The problem: It never persuaded most sales reps to enter orders from the road.
For now, the wireless data market remains dominated by traditional uses such as field service and fleet dispatch. Slightly more than half the customers use private, special-purpose networks run by the trucking companies, government agencies, and shippers, Yankee Group says. One third use cellular, either by hooking modems to conventional voice channels or sending on the cellular industry’s new piggyback service, called CDPD, for Cellular Digital Packet Data. Satellite services come in next with 8%, dominated by Qualcomm Inc.’s data and vehicle-location service for long-haul truckers. Just 5% use the specialized data networks run by Ardis and Ram Mobile Data USA, a company affiliated with BellSouth.
Cutting prices is the first prerequisite to expanding wireless data’s niche. Ardis and Ram charge about 15 cents for 600 characters, or more than 1,000 times the per-character rate for a wired transmission with a 14.4 kilobit-per-second modem. Hardware prices are stiff as well: IBM charges about $800 for its new line of radio modem cards for Ardis, Ram, or CDPD systems.
Network availability is another deficiency, though Ardis, Ram, and others continue to expand their coverage. The CDPD standard will eventually take wireless data services wherever cellular-phone networks reach. As yet, though, it’s available in only a handful of markets. Ditto for Nextel Communications Inc.’s data network that uses mobile-radio (fleet dispatch) frequencies.
Finally, there’s software. Applications that are designed for office-standard 10 megabit-per-second local-area networks aren’t practical for wireless connections, which run about one thousand times slower. More than a dozen companies, including Motorola, are trying to solve that with middleware that sits in the wireless device and in a special network server and smooths the interaction between them.
Even as suppliers continue to tackle these bugs, there are plenty of happy wireless pioneers. Marcia G. Kadanoff, a principal in Miller/Kadanoff Direct, a San Francisco direct-marketing firm, uses her Motorola Envoy digital assistant to fire off questions to her staff during visits with clients. Generally, an answer comes back before the meeting is over. Says Kadanoff: “I totally love my Envoy.” But would she shell out more than $1,000 apiece to equip her staff with Envoys? “If they came to me today, I’d say, `Love to do it. Let’s wait till the technology gets a tad cheaper.”’ That’s why most roving workers will continue to look for a phone jack.
— Peter Coy
Original article on Business Week site (link doesn't work - thanks Bloomberg!)