Removing the Sting
Technology vendors, corporations and consumers can do little about the current limitations of wireless technologies, but corporate decision makers are finding a better way to roll out mobile communication services: Let someone else take the risks.
Specifically, corporations are letting a new breed of company the wireless application service provider (WASP) navigate still rocky wireless terrain.
Industry experts caution that wireless technology is dangerously overhyped and rife with technological pitfalls ranging from a lack of standards to low bandwidth, but they say WASPs make deployment a far more financially and operationally viable undertaking.
"I dont know if theres anything thats been more overhyped than wireless in the past few years, but WASPs provide a skill set that is hard to come by," says Dennis Gaughan, a research director at AMR Research in Boston.
Information technology (IT) managers who have used these new communication services say they make it possible to take advantage of the potential of wireless without taking on so many of the risks.
John Klopp, president of Pacific Mechanical Service, an Upland, Calif., commercial air conditioning installer with 27 employees, is nothing but happy he found FieldCentrix, an Irvine, Calif., WASP.
FieldCentrix provides applications for field service employees in various industries. The company hosts an application designed specifically for the industrial air conditioning industry that Klopp estimates would have cost Pacific Mechanical more than $100,000 to build.
"I really liked the FieldCentrix software, but the question was Could we afford it?" Klopp recalls. "At the time, FieldCentrix was just rolling out their hosted model and I said, Send me a contract. "
Pacific Mechanical now pays only $400 per month per technician for the application, which includes deployment and support costs. Klopp says the technology has been "amazingly dependable" with excellent connection reliability.
The wireless application, accessed with an Itronix 5200 handheld computer a proprietary device about half the size of a laptop replaces paper-based maintenance contracts and service call records, as well as cell phone dispatch and communications.
Klopp says the wireless application saves time and money and makes Pacific Mechanicals customer service far more effective.
"Its a huge leap forward for us," he says.
Special Skills Required
Wireless technology requires a unique set of skills and resources apart from most IT tasks. Also, WASPs hold prearranged connectivity agreements with telecommunications carriers agreements that are difficult to obtain by individual companies.
Unlike traditional ASPs, WASPs may or may not directly host a specific application. Overall, corporations are most interested in partnering with these companies for their hosted connectivity services and for their experience in converting client-server or Web-based applications to the most effective formats for the myriad mobile client devices now in use. Those devices range from Palms and pagers to cell phones and proprietary handheld computers.
Most WASPs help companies convert their existing applications to wireless formats, and then manage the delivery of those applications to any device the company is using.
Typically, WASPs characterize themselves as wireless "platform providers." Their core skills focus on such issues as storing and forwarding wireless messages, security, and adapting applications to many devices with limited bandwidth and interfaces.
About two dozen or more WASPs are at work today, with few clear leaders but several with proven deployments. Some of the more noteworthy companies include Aether Systems, Air2Web, AnyDevice, Brightpod, Broadbeam and iConverse.
The market is ramping up rapidly, with new companies popping out of the woodwork daily. Jack Gold, an analyst at Meta Group in Stamford, Conn., says most of these new WASPs are small, with Aether filling the role of the "800-pound gorilla" with only $60 million or so in sales. Most companies in the category are only a year or two old and have a handful of customers.
Analysts say they have heard few complaints from customers working with WASPs, but most deployments have been limited to a few hundred or a couple of thousand customers or pilot users. Most of these projects have been in use for less than a year, and many for only a few months.
Gaughan says WASPs vary in their services and software, but most adapt existing applications run by companies, letting them stay behind the corporate firewall, and feed the information to their hosted site via eXtensible Markup Language data exchange. The WASP directs this data into various versions of the application, each designed to communicate and interface with different devices.
Although corporations can benefit from WASPs, Gold says most of todays WASPs will not survive more than a couple of years, leaving only two or three companies.
"Standard ASPs are already suffering a fallout," Gold says. "Wireless ASPs certainly wont fare much better. While their services are valuable, the market is not so big."
Nevertheless, analysts expect strong growth in the segment, especially for WASPs serving the enterprise marketplace. IDC predicts that WASP revenue will rise from $13.8 million in 2000 to $732.2 million in 2004. Business-to-business services will make up the largest slice of that pie.
Cheaper, Better, Faster
Gold says companies can not only gain a cheaper and faster deployment by using a WASP, but in the process can learn from these partners in preparation for future deployments. Gold figures companies are best off with WASPs for at least two years, until standards and other wireless data communication issues settle.
Betting on the wrong WASP will prove far less costly to a company than betting on the wrong technology for developing wireless services in-house. No one knows yet which standards, services or companies will emerge as pre-eminent for wireless communications. WASPs, at least, help mitigate these risks, Gold says.
But companies can certainly shop wisely, Gaughan says. They should assess a potential WASP by such criteria as carrier and technology partners, current customers, funding and, most importantly, its success record.
WASP customers report initial development projects take several weeks to a few months, and most end up working according to expectations.
Most WASP partners also say the providers meet their promises within the technologys limits.
WASPs greatest value is the ability to manage connectivity for applications. WASPs know about the ins and outs of maintaining the connections with these networks and properly designing and monitoring dynamic device data, which ensures various mobile client devices can understand the signals they receive.
"That kind of setup cant be shrink-wrapped," says Dale Gonzalez, vice president of wireless development at Air2Web in Atlanta. "Hosting lets companies be a first-mover in a sane way."
Cost a Key Factor
WASPs help companies control expenses by deferring much of the up-front costs into monthly subscription fees for the hosting service. However, most WASPs do charge an initial development fee for reformatting applications, among other tasks, which typically runs $50,000 to $400,000, but can be as low as $10,000.
While not cheap, WASPs are proving to be the most cost-effective approach to wireless application rollouts. And cost is a key factor in deploying these services, since few companies are generating much revenue from such applications, says John Gilbride, a vice president of product development at IPO.com, a New York City provider of financial information on start-up companies.
IPO.com has 14,000 registered users of its Internet-based financial information service, which is delivered via mobile phones, pagers and personal digital assistants. AnyDevice adapts IPO.coms content and broadcasts it to the mobile devices.
Gilbride says the venture is more about building customer satisfaction than generating revenue. "The return on investment on wireless applications is terrible," he says. "But going with AnyDevice gives us a nice way to sample the market and learn and grow with the technology."
Some WASPs focus on connectivity hosting and partner with standard ASPs for packaged offerings. As is the case with corporate customers, ASPs are happy to let WASPs handle the specialized technology challenges of wireless services.
And the WASPs are more than happy to partner with the ASPs. Whether their revenue comes from an enterprise customer or an ASP reseller matters little to them.
Most ASPs would not reveal the details of their agreements with WASPs, but they say that they typically enter a revenue-sharing agreement, as opposed to a monthly subscription model. The up-front development costs are similar to those charged to corporate customers.
EcSalesdata, a Los Angeles ASP that offers merchandise-tracking software for small and midsized suppliers, has partnered with Research Triangle, N.C.-based Brightpod. EcSalesdata uses Brightpod to let salespeople and other employees in the field look up shipment and order information.
Brightpod has proven to be not just a "Barney partner," referring to the dinosaur from the childrens PBS show who sings "I love you, you love me," says Steve Drake, ecSalesdatas chief technology officer. Barney partners talk a good game, but do not deliver on their promises.
"I was hoping to stay away from that, and Brightpod has been getting the job done," Drake says. "They were in a better position to develop a wireless version of our product than I was. My core competency is making desktop applications, not setting up wireless communications."
EcSalesdata is now testing its wireless application with limited functions, though Drake says the company will roll out its full version by late spring.
Ericsson, the telecommunications equipment manufacturer, provided Brightpods seed money when it was spun off from Ericssons Mobile Internet Group by one of its executives in May. It now has 22 employees and a handful of customers. Drake says he picked Brightpod in part because of its relationship with Ericsson, which gave him faith the company will weather changes in the industry better than most WASPs.
Brightpods technology, which lets users work offline and synchronize data when they connect, also caught Drakes eye.
Picking the Best of Breed
Brightpod, unlike many WASPs, doesnt use its own wireless connectivity technology, but instead harnesses a collection of software that it considers "best of breed" from such vendors as AvantGo and IBM.
Scott Baradell, Brightpods vice president of marketing, says his companys design model will let it switch to new vendors and technologies as wireless evolves, rather than being stuck with its own technologies if they fail to take hold in the market.
While proving the most viable approach to wireless exploration, WASPs are also passing the most important test of offering useful services to end-users. Individuals tapping into applications delivered by WASPs are finding the services generally dependable and useful, if limited in their capabilities.
Dan Foster, for example, is a customer of Internet bank, NetBank, which is based in suburban Atlanta. He uses NetBanks recently introduced wireless service options, which allow him to view limited account information such as his balance, deposits and last five transactions.
NetBank is working with the Atlanta-based WASP, Air2Web, which runs its connectivity platform for NetBank and connects to applications behind the corporate firewall remotely.
Foster says he has been happy with the service, since it allows him to check on his account while traveling, using his Nokia mobile phone or Palm VII personal digital assistant.
"It gives me peace of mind," Foster says.
Signing up and managing the free service has been "pretty idiotproof," he says. But Foster is an IT professional, most recently a CTO at a now defunct dot-com. He says he didnt have unreasonable expectations for the service, since he was aware of wireless technologys current limitations and complications.
Indeed, no WASP can claim to overcome the inherent limits of todays wireless technology, but companies that are satisfied with WASPs are like Foster, and come into the partnerships with humble expectations.