Grasping for Growth
Time, cost and complexity are delaying the large-scale infrastructure opportunity. Longer-term, wireless network infrastructure, as well as hardware and security, offer the lions share of growth for wireless vendors and their stock prices. While there is a market for wireless networks, companies are tending to install them as a supplement to a fixed network, this revenue opportunity is several years away. Considering ongoing economic and business weakness, there is little reason for most businesses to upgrade networks and PCs. Most currently in use were bought in 1999-2000, largely driven by Y2K or Windows NT, and are adequate for running most current operating systems and business applications. For the most part, companies only go for en-masse upgrades of notebooks and PCs to run new software, and no such software seems to be on the horizon.Installation of wireless infrastructure and wholesale hardware upgrades looks more and more likely to be a 2005 event. With the dollars required, as well as the extent of equipment required, a company would have to significantly cannibalize other areas of their IT budget to install much of this wireless technology right now. While there appears to be evidence of some increases to wireless IT spending, for the most part this is in proportion with IT increases overall: companies are not cannibalizing areas of their IT budgets to pay for wireless. However, we should continue to see early wireless adopters on line sooner. 2005 to 2006 seems more likely for widespread adoption with meaningful economic benefits for vendors. We are in 2003 already, and it takes a year to plan and a year for installation, which means 2005 before a system would be up and running for early adopters. The masses are likely to be more conservative, especially since money is so tight.
For now, wireless hardware seems like a pilot effort in larger companies and is probably two to three years away from entering mainstream, large-scale installations anywhere. Longer-term, investors should keep an eye on the larger vendors, including: Cisco, Intel, Dell, Microsoft, Hewlett-Packard, IBM, Sun Microsystems, and IBM. Although they currently have modest wireless offerings, they have yet to reach critical mass and high volumes of sales. Furthermore, there are not yet any convincing market share leaders with depth of penetration in wireless infrastructure and hardware.