Serving Up Cost Savings on a WLAN Dish

 
 
By Paula Musich  |  Posted 2001-05-14 Email Print this article Print
 
 
 
 
 
 
 

IEEE 802.11 standard has made technology stable for full-scale networks.

Most of the wireless work done by professional services today involves deploying wireless telecommunications infrastructures. But there is a small, quiet groundswell of enterprise WLAN deployments beginning to take shape.

IBM Global Services is so convinced of the opportunities for helping clients deploy wireless LANs and wireless-enabled legacy applications that it expects its fledgling wireless services practice to grow by more than three times over last year and grow another three times next year, said Dean Douglas, general manager for Wireless e-Business Services for IBM Global Services Americas, in Somers, N.Y.

The practice was started last June.

"By the time we get into 2002, we will have to have skills pervasively deployed across all global services," Douglas said. "By the end of 2002, there wont be very many people in IBM Global Services that will not have some understanding of wireless."

Not all that activity will focus on WLAN deployments, but IBM Global Services is involved in several large projects. Its helping wireless service provider startup MobileStar Network Corp. with WLAN deployments in hundreds of locations around the country. MobileStar plans to use a combination of WLANs and high-speed land-line connections to offer traveling laptop users high-speed access to their corporate virtual private networks.

Behind the uptick in WLAN deployments is the IEEE 802.11 standard, which has made the technology stable and pervasive enough for full-scale production networks.

But before they invest in wireless technology, clients are turning to professional services organizations such as KPMG Consulting Inc., in McLean, Va., to determine whether they can achieve a return on those investments.

"In almost all of the technology analysis weve done on how to deploy wireless, were asked to do some formal ROI [return on investment] in the analysis," said Joe Sims, managing director for mobile commerce and wireless solutions at KPMG. "You cant afford to make a major investment like this just to see if it works."

When it comes to wireless data, "What companies in the U.S. are looking for is the right economics," said Ken Dulaney, vice president of mobile computing at Gartner Inc., in San Jose, Calif.

Most enterprises are looking to use the technology to go after new revenue opportunities or to reduce costs. But finding the answers isnt always intuitive, Sims said. "Many clients went in with the expectation that they would see increased sales, and, instead, weve found cost savings."

For example, by enabling a legacy system for wireless access for a manufacturing client, KPMG found it can shave four to five weeks off custom product design time, saving $100,000 per week. That allowed the manufacturer to increase market penetration by 5 percent to 6 percent.

But finding the ROI isnt always easy. It can depend on what type of application it is designed to support. The most obvious–enabling field personnel in delivery or repair functions–is the easiest payback calculation to make, said Glover Ferguson, chief scientist at Accenture, in Northbrook, Ill.

Enterprises are also turning to professional services companies for advice on whether they should wait for the technology to settle down and whether its possible to deploy wireless projects now in a way that allows them to future-proof their applications, said George Stobie. He is responsible for managing the cross-products wireless solutions for Compaq Professional Services, a division of Compaq Computer Corp.

To use wireless to create new business offerings, clients turn to Compaq for help in understanding "how to apply it in a way to differentiate their business using this technology. Often they need help in justifying that internally," said Stobie, in Stow, Mass.

With the MobileStar network, IBM Global Services is helping the startup to take on the risks associated with WLAN deployment, while allowing traveling executives or other enterprise mobile workers to gain high-speed access to corporate networks. MobileStar began with 134 hotel and airport locations last year and, this year, will extend to about 1,700 sites, including many Starbucks Corp. stores, said George Sutton, chief operating officer for the Richardson, Texas, company. Starbucks agreed to allow MobileStar to deploy WLANs in 4,000 locations.

Still, the lions share of the professional services business over the next few years will remain in wide-area infrastructure build-out for carriers. Gartner Dataquest estimates that by 2004, professional services revenues from the wireless arena will be $35 billion.

Today, 80 percent of the business opportunity is with carriers, while 20 percent is with enterprises, said Cathy Tornbohm, an analyst with Gartner Dataquest, in Egham, England. "By 2004, enterprise will be more significant," Tornbohm said.

While that may be true for Europe and Asia, IBM Global Services has seen the opposite, said IBMs Douglas. "In the Americas, the opportunity is for enterprises–80 percent of revenue we saw came from enterprises, 20 percent from telcos."

 
 
 
 
 
 
 
 
 
 
 

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