Wireless Scorned

Vendors attempt to make technology appealing to enterprises

At a time when most companies are watching every penny, IBM, Microsoft and OracleMobile are trying to make it easier for enterprises to justify spending on wireless technologies. But their involvement in the wireless space could spur consolidation — perhaps too soon — as struggling start-ups look for an out amid the shrinking availability of investor dollars.

Instead of buying wireless platforms to extend corporate information to mobile workers just because wireless is hot, enterprises are looking for assurances that such investments are necessary. "People really want to see a return on investment in wireless," says Val Rahmani, general manager of global wireless at IBM. Thats a change since last year, when companies seemed to want to be mobile for the sake of being mobile.

Companies are indeed fearful of the cost of implementing wireless. Fifty-three percent of information technology decision makers say cost is the primary barrier to rolling out wireless solutions, according to a recent survey by Digi International, a company that offers software connectivity tools. Managers also cited security and compatibility with other IT infrastructures as barriers to adoption.

Traditional software players are introducing offerings aimed at making the implementation of wireless easy and predictable, hoping to quell fears within the enterprise.

OracleMobile has found that enterprises want to enable wireless access, but have concerns about how to implement a solution, how much it will cost and how quickly it can become available. "We take away the risk by selling you a predictable application, like e-mail, in a predictable time," says Jacob Christfort, chief technology officer and vice president of product development at OracleMobile.

OracleMobile recently introduced a solution that promises to provide a company with wireless access to e-mail and a corporate directory in a speedy 15 days, for a fee based on usage. "Were trying to kick-start and drive adoption," Christfort says.

Christfort believes enterprises will ultimately deploy many more mobile applications in addition to e-mail, but the e-mail solution is proven, can be implemented quickly and has a clear value. The e-mail offering is built on OracleMobiles wireless platform, on which an enterprise can then build additional applications.

Wireless e-mail provides a more reliable option for remote e-mail access then synching a mobile device with the desktop, a process that creates a copy of messages. With wireless e-mail, users read messages directly from the server. "Its more secure because there are no copies of e-mails. But the price youre paying is its a bit slower to access over the network, and you may use more bandwidth," Christfort says.

IBM recently rolled out a number of new wireless initiatives, including one that offers to implement a wireless local area network for a company in two days. The offering comes in concert with news that all IBM ThinkPad notebooks and WorkPad Palm devices will have wireless-LAN capabilities, and the ThinkPads will have an antenna built into the screen.

This summer, IBM will begin a pilot program with The Venetian Resort Hotel Casino in Las Vegas: Reception staff will meet guests at the door and check them in using a handheld device, so that new arrivals wont have to wait in long lines to check in. The device will communicate wirelessly with the hotels reservation systems.

In addition to enterprise applications, IBM expects business-to-consumer wireless services will gain momentum in the near future. "Well see a time soon, in the next 12 months, where you cant operate a bank or an airline without wireless," IBMs Rahmani says.

Microsoft may also be trying to breathe life into the mobile market with its Microsoft Mobile Experience Tour, a traveling exhibition of mobile solutions.

One of the companies participating in the exhibit is AvantGo. AvantGo will showcase its software, which enables mobile access to applications such as customer relationship management, and sales force and supply chain automation.

Some analysts say the presence of such heavy-hitting software players in the wireless space — coupled with the market downturn — could spur some consolidation, possibly prematurely. Companies such as Oracle, SAP and Sybase are beginning to tack on wireless as an option when delivering other database solutions to enterprises, says David Chao, managing general partner at Doll Capital Management, a venture capital firm.

But Chao doubts that many of those companies have actually developed wireless solutions. "Everybody says they have it, but in reality, its probably still vaporware," he says.

When the capital market was still hot, many of those big software companies may have decided to develop their own wireless products because it would have been cheaper than trying to buy a start-up that had already created a solution. "The key issue here is all these companies are going to go through a make-or-buy decision in the next 12 months," Chao says.

Now that start-ups are struggling with the market downturn and their values are slipping, the traditional software vendors might reconsider scooping up a small company with already-developed software.

Getting bought could be a good solution for start-ups, as the challenge of finding new investors increases. "A number are looking at how long they can survive without funding," says Andrew Cole, global wireless practice leader at consultancy Adventis.

This type of consolidation isnt coming as a result of the maturity of the marketplace. "If not for the economic slide, we would still see prolific activity with multiple start-ups," Cole says. But consolidation isnt negative, "so long as it doesnt stifle innovation."

Consolidation could also begin to occur between start-ups that hope to broaden their offerings. A number of wireless data software start-ups have very solid offerings that may complete only one piece of the wireless data puzzle. "The danger is they may be world-class at what they do, but the inclination is to go to a one-stop shop," Cole says. Customers may prefer to employ one vendor that can deliver an entire solution, rather than piece together different products.

Openwave Systems, the company made up of Phone.com and Software.com, is one of the few companies in the wireless space that has made enough significant acquisitions to be able to offer a broad, end-to-end solution. Since the end of 1999, the company has acquired Avagadro, @Motion, Onebox.com and Paragon Software.