- Global Trends
- Drivers and Barriersto Adoption
- Business Agility Lessons
This chapter is from the book
This chapter is from the book
This chapter is from the book
Drivers and Barriersto Adoption
Drivers for Adoption
The drivers for adoption of mobile business within the enterprise and with consumers are numerous (Figure 2–4). They include the following: the increasing mobility of today's workforce; the convergence of telecommunications and software industries; the increasing need for information and transactions anytime and anywhere; the new breed of wireless handsets coming on the market; the revenue opportunities created via location-based services and M-Commerce; the productivity improvements to be gained via wireless extensions to enterprise applications and processes; the improvements in bandwidth brought about by the migration from 2G to 2.5G and 3G networks; and the adoption of wireless standards such as WAP and Bluetooth, together with the cultural and regulatory drivers in various countries. If we distill these drivers into their primary forces, we see the forces of industry convergence, improvements in wireless technology and standards, together with cultural and regulatory effects as driving global adoption of mobile business.
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Figure 2–4 Drivers for Adoption of Mobile Data.
Barriers to Adoption
Despite the strong forces that are driving adoption of mobile business, it also faces considerable barriers. There are two main types of barriers to adoption: business barriers and technology barriers. The primary driver for adoption of any new technology needs to be the business case. But even with a business case developed, if the technical obstacles are too high, deployment will be troublesome, if not impossible.
As technical obstacles diminish, they can actually help the business case by expanding the realm of possibilities. For example, accurate location determination techniques can create opportunities for location-based advertising.
Business management needs to be aware of both the drivers and the barriers to adoption of mobile business so that informed decisions can be made. Acting too early or too late can have significant consequences. An entry into mobile business that is premature or incorrectly targeted can distract scarce resources within the enterprise without achieving significant results. An entry that is too late can be even more dire and lead to lost revenues, lost productivity, lost competitive advantage, and even lost customers.
Business Barriers
The major business challenge for mobile business is simply the business case. On a macro scale such as the creation of an entirely new business, the following standard questions may apply: Can a business make money by using this model? What is the nature of the product or service being offered? Who are the customers and how will they benefit from this product or service? What is the point of pain that is being removed? What is the size of the market and the differentiation from the competition? What is the pricing strategy and how will the service be delivered? What channels will be used to promote the product or service? What should the branding strategy be? Are end users ready for this service? These are all fairly classic questions for any business. They apply equally to the M-Business arena because the market still has to be created and moved from early adopter status to the mainstream. Often, in addition to a compelling value proposition around M-Business, one still needs to educate and influence consumer and enterprise behavior in order to drive adoption. The new way of doing business needs to be compelling enough and simple enough in order to change user behavior.
On a smaller scale, such as a new business initiative within an enterprise, the following questions may apply: Will end-users accept the technology and process change? Will it provide enhanced customer service or improved employee productivity? How will this be measured? How will end users transition from prior processes into this new process? What is the return on investment? What is the learning curve for end-users? What training is required? What support services are required? What service level agreements need to be in place? How critical is this new application to the business?
The case studies in the industry examples chapter of this book will serve to illustrate how some of the enterprise early adopters have answered these questions and have achieved true business benefit and return on investment.
Technology Barriers
The technical barriers to adoption of wireless technologies are numerous. They include diverse standards for applications and networks, spotty coverage, low bandwidth, perceived lack of security, diversity of devices, slow response times, primitive user interfaces, and numerous other factors.
In a December 2000 survey of 101 IT and business managers, Internet Week found the following distribution of wireless Internet concerns (see Table 2–2).
Table 2–2 Wireless Internet IT Concerns. Source: Internet Week.
|
Rank |
Feature |
Percentage |
|
1 |
Security |
77% |
|
2 |
Lack of Reliable Standards |
69% |
|
3 |
Lack of Web or Enterprise Integration Products |
61% |
|
4 |
Inadequate Bandwidth |
54% |
|
5 |
High Costs of Technology |
49% |
|
6 |
Quality of Technology |
44% |
The concerns are similar to those of the wired Internet about four years ago. Typical concerns back then included the primitive graphical user interface of the Web browser versus the richer user interface of client/server applications, the lack of security, and the low bandwidth. Enterprises were not convinced that the Internet technologies were robust enough for their critical applications. In fact, I remember many meetings with enterprise clients as a consultant where the stakeholders questioned the need for applications such as extranets and quite rightfully asked about the return on investment. Since ROI calculations had not been extensively developed in those early days, we tended to talk about the soft benefits of enhanced customer satisfaction and improved communications.
Moving back to the present day, as the industry continues to evolve, innovative technology companies and wireless carriers are providing solutions to these technology obstacles—thus helping to drive adoption. What is clear is that the enterprise cannot afford to wait. Mobile business strategies should be crafted today in order to target quick wins and to drive the process change within the enterprise toward mobile business.
Even with a lack of reliable standards, inadequate bandwidth, incomplete coverage, and a wealth of devices and software on the market, it is possible to design and implement highly effective applications within the enterprise that provide a good return on investment. Applications can be implemented that support multiple devices, multiple carrier networks, and can handle incomplete coverage by offering online and offline capabilities. Typically, during offline usage where the carrier network cannot be accessed, the applications use the onboard database of the device and store data for later synchronization when the wireless network becomes available or when a standard dial-up connection or cradle connection is available.
Regulatory Environment
In addition to the major global carriers, handset manufacturers and software companies creating the market for mobile business for the enterprise, the global regulatory environment is also helping to chart its course. Regulations such as the Telecommunications Act of 1996 and the Enhanced 911 (E911) mandate from the Federal Communications Commission (FCC) within the United States have helped to bring about major change in the telecommunications industry.
The FCC was established by the Communications Act of 1934 as an independent United States government agency directly responsible to Congress. The FCC is responsible for establishing policies to govern interstate and international communications by television, radio, wire, satellite, and cable.
Enhanced 911
In the United States, the Federal Communications Commission's E911 mandate made automatic location identification a requirement for the wireless carriers to implement within their networks. The following is an extract from the FCC Web site:
"In a series of orders since 1996, the Federal Communications Commission (FCC) has taken action to improve the quality and reliability of 911 emergency services for wireless phone users, by adopting rules to govern the availability of basic 911 services and the implementation of enhanced 911 (E911) for wireless services."
The basic 911 rules required wireless carriers to transmit all 911 calls to a Public Safety Answering Point (PSAP) without regard to validation procedures intended to identify and intercept calls from non-subscribers. Phase I of the enhanced 911 (E911) rules, required carriers to provide to the PSAP the telephone number of the originator of a 911 call and the location of the cell site or base station receiving a 911 call. Phase II of the E911 implementation required wireless carriers to provide Automatic Location Identification (ALI) beginning on October 1, 2001 in order to provide emergency services with greater accuracy for call origination. The ALI accuracy requirements were as follows:
For handset-based solutions: 50 meters for 67% of calls, 150 meters for 95 percent of calls
For network-based solutions: 100 meters for 67% of calls, 300 meters for 95 percent of calls
This Government mandate has helped add fuel to the location-based services industry as a sub-set of the M-Business market. According to Strategy Analytics, the market for location-based services will reach $6.5 billion in the United States and $9 billion in Europe by 2005. Some of the potential applications of located-based services include tracking services for locating and tracking people and assets, and location-based advertising. The business models and potential applications for location-based services will be explored in further detail later in the book.
Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of telecommunications law in almost 62 years within the United States. The goal of the law was to let anyone enter any communications business—to let any communications business compete in any market against any other.
The main thrust of the law was to force the Bell Operating Companies to open up their local loops to competitors in exchange for providing them the ability to enter the long distance market. The Telecom Act has done a lot to create a competitive environment in the telecommunications industry and has resulted in a large increase in financial investments in the telecom industry.
Spectrum
The allocation of spectrum, the various frequencies for radio transmission, is also subject to regulation. Radio spectrum is the part of the natural spectrum of electromagnetic radiation lying between the frequency limits of 9 kilohertz and 300 gigahertz.
The International Telecommunications Union (ITU) in Geneva is responsible for worldwide coordination of both wired and wireless telecommunications activities. Frequency planning is conducted by the ITU Radiocommunication sector (ITU-R), which has divided the world into three broad regions.
In the United States, responsibility for radio spectrum is divided between the FCC and the National Telecommunications and Information Administration (NTIA). The FCC administers spectrum for non-Federal government use and the NTIA, which is an operating unit of the Department of Commerce, administers spectrum for Federal government use.
3G Licensing
One of the biggest costs, in addition to physical infrastructure building, for the wireless carriers in moving toward 3G networks has been the bidding on spectrum auctions. According to Nokia, over 80 3G licenses were granted in 2000 and several hundred more will be granted over the next few years.
The U.K. government auction, which ended on 28th April 2000 after seven weeks of bidding, raised nearly 22 billion pounds from five operators—TIW, One2One, Orange, Vodafone, and BT Cellnet. The German auction, which ended on 5th September 2000 after fourteen days of bidding, raised $37 billion from six operators—T-Mobil, Mannesmann, E-Plus-Hutchison, Viag Interkom, MobilCom, and Group 3G. According to 3G Newsroom (http://www.3gnewsroom.com), the five most expensive auctions were Germany, Britain, USA, Italy, and South Korea with a total of over $100 billion spent within these five countries alone.
Other countries such as Norway and Finland have adopted a beauty content approach and have given away spectrum licenses for free or for reduced prices when compared to auction pricing. Due to the high fees paid out by the wireless carriers in buying these 3G licenses, companies such as BT and Vodafone have actually started to talk about teaming in order to share the costs of the 3G buildout in terms of network infrastructure such as mobile masts.
With this much money invested in 3G networks, it will be interesting to see how quickly the wireless carriers transform their business models, products and services, and target both consumers and the enterprise in order to attempt to recoup these massive expenditures.
Telecom Environment
One of the major trends in the telecom industry is that the wireline and wireless carriers are seeking to leverage data services as a new value-added service offering, a new revenue stream, and a differentiator from the competition. With data services, these companies have the potential to increase average revenue per user (ARPU) and reduce customer churn. With voice service becoming increasingly competitive and commoditized, these companies are moving into data services with the same zeal as enterprises that have adopted E-Business over the last several years. In effect, they are transitioning themselves into a totally new class of service provider—often termed the next generation communications service provider or CSP.
The following figure from the ARC Group shows how large the problem of declining voice revenues is becoming. The next year or two will be critical for the communications companies to transition their business model and their products and services in order to capture the market for data services before it is lost to the competition.
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Figure 2–5 Predictions for Increase in Value-Added Data Services in Order to Raise Carrier ARPU. Source: ARC Group.
Value-added data services can help communications companies not only increase ARPU but also to reduce customer churn and to increase customer loyalty. Consumers, small businesses, and enterprise customers are far more likely to stay with a given service provider if they depend upon them for not just their "pipe" (the connection) but also productivity increasing communications services. Such services include unified messaging and e-mail, content services that are personalized to their needs, and applications such as personal information management, Internet and intranet access, time and expense reporting, dispatch/scheduling, equipment monitoring, sales force automation, and field force automation.
Today's communications companies could end up becoming the M-Business providers of tomorrow. Owning the network, they are in a powerful position to become the ultimate owner of the customer—financial services providers, retailers, content companies, and software companies need to pay close attention to the strategies and movements of some of the leaders in this industry.
In fact, we appear to be moving into an era of vertical integration. Wireless companies are attempting to become full service providers within the industry. They are beginning to do this by providing the network, the applications, and the integration services for their enterprise customers. An example that comes to mind is the merger of Motient Corporation, a provider of two-way mobile and Internet communications services, with Rare Medium, an Internet professional services firm. This vertical integration model is reminiscent of the early decades of the computer industry, wherein companies such as IBM, HP, and Digital provided complete solutions from hardware to software.
Wireless Data Services
One of the first data services, after two-way interactive paging, provided by the wireless carriers was the well-known "wireless Web." This service provided access to Internet sites over a cell phone equipped with a micro-browser via the Wireless Application Protocol or WAP. The WAP standard defines a set of technical specifications for delivering Internet communications and advanced telephony services on digital mobile phones, pagers, personal digital assistants, and other wireless terminals. The initial work on WAP started back in June 1997; this was done by a consortium that included Ericsson, Motorola, Nokia, and Unwired Planet. (Since that time Unwired Planet changed its name to Phone.com and later merged with Software.com in order to form Openwave.)
Thus, the first generation of wireless Internet data services provided by the carriers was focused on consumers and provided access to Internet Web sites via the Wireless Application Protocol. Carriers formed partnerships with multiple content providers in order to build closed-content portals often known as a "walled garden." Users were confined to the content providers listed within the portal and had little or no way of getting out to any other sites on the Internet. Given the "walled garden" situation, it has made a lot of sense for content providers to form relationships with the wireless carriers in order to get placement on their WAP portals and better visibility for their wireless services.
The story of how wireless carriers came to focus on horizontal wireless data applications for enterprise customers is an interesting one. According to Paul Reddick, VP of Business Development, Sprint PCS, the company was already looking at enterprise applications for wireless data as early as 1998. They initially talked to enterprise customers to understand the killer applications for various vertical markets such as the insurance and real estate industries. Their discussions with customers revealed that, although vertical market applications did not warrant heavy investment at that time, there appeared to be a universal need for more horizontal applications on the mobile phone such as e-mail, and personal information management (PIM) such as contacts, calendars, schedules, as well as customer relationship management, corporate directories, and sales automation. Sprint PCS adjusted their strategy and delivered these horizontal applications with a set of industry partners as part of a suite of products known as the Wireless Web for Business in September 2000. They are now moving into the vertical applications space as described in the next section on wireless application service providers. According to Reddick, part of mission of the Sprint PCS Clear Wireless Workplace is to make people more productive. The natural extension to this is to allow their customers to access information in addition to people. This is true whether one is dealing with consumers or with enterprise customers. Thus, the migration from voice to data services has been a natural evolution, as well as a fundamental part of their mission statement.
M-Commerce Services
The next logical step after wireless data services such as wireless Internet access is for the wireless carriers to facilitate M-Commerce transactions over their networks. Many pilots and trials have been adopted worldwide, with some carriers such as NTT DoCoMo already having production implementations. We have seen this earlier in the section on global trends. Examples of some of the trials that have occurred include the NetCom trial with the M-Commerce software company MoreMagic, the AT&T Wireless trial with QPass, and the DirectBill service offered by Cingular Wireless.
The trial conducted by Norwegian mobile operator NetCom used the MoreMagic payment transaction software to pilot four M-Commerce service offerings: a popular Norwegian daily soap, a pizza delivery service, an online newspaper archive, and a location-based service. The MoreMagic transaction platform is described in Chapter 8.
Outside of the wireless carriers, other players are also engaging in pilots. Palm has been testing M-Commerce payments using the Palm PDA as the holder of digital wallet information; such information can be beamed over the IR port to merchants with Palm-compatible terminals for payment.
Since M-Commerce is still in its infancy, business models have not yet stabilized. It remains to be seen who the eventual winners will be. The main players are the wireless carriers, the portals and content aggregators, the financial service institutions, and the merchants themselves. How the value extracted from M-Commerce transactions will be shared between these players is still to be determined. What is likely is that a significant portion of the percentage of the revenues will shift from the wireless carriers toward the content and application service providers.
Who will own the M-Commerce consumer is also an open question. The carriers, as we suggested earlier, may be one possibility. They control and operate the network and the portal interface presented to the user. But the financial services institutions, who can be carrier network agnostic, may also be able to extend their customer relationship from the credit card world to the M-Commerce world, that is with digital wallets. The digital wallet is an important item to own from a provider standpoint, because it can contain customer payment choices and shipping addresses, as well as customer preferences and a link to the customer's transaction history and buying habits.
One aspect of M-Commerce transactions that the wireless carriers have seemed reluctant to own is the billing for third-party products and services. The issues around billing relate to the legality of billing for non-telecom-related changes, the issue of collecting payment, and the issue of customer care and dispute resolution.
The winning strategy for the wireless carriers may well be to outsource the billing and collection aspects around M-Commerce transactions, but to own the customer profile, preferences, and the digital wallet. This builds in switching costs for the consumer, owing to the time required to activate a digital wallet, and the level of personalization and ease-of-use that it provides. Yet this still frees the wireless carrier from the burden of handling or providing all the costs associated with post-transaction customer care and billing.
On the other hand, merchants may become less willing to share revenues if all the carrier provides is the channel to the customer. As closed wireless carrier portals give way to open portals with free access to any Internet URL, the carriers may find themselves dis-intermediated from M-Commerce transactions with merchants who already have a strong brand name and customer loyalty. To stay in the loop, they need to provide more user-friendly, efficient, and secure M-Commerce mechanisms than the merchants provide by themselves. This may include digital wallet services, one-click transactions, ease of navigation, security, and context-relevant services that enhance the value proposition for both the merchant and the consumer. This model of value-added services in order to stay a key component of the value chain is similar to the strategies of distributors in the supply chain of the business-to-business electronic commerce world.
The action item for the enterprise contemplating their M-Commerce strategy is to continue to observe the various business models and revenue sharing arrangements that are occurring worldwide. Moreover, enterprises need to be prepared for when this channel becomes significant. Eventually the M-Business channel will be just as important as the wired Internet channel to customers that you have today. Today, there are few consumers making M-Commerce transactions, so the incentives for the enterprise to invest in and roll out M-Commerce solutions are reduced. However, it is prudent for the enterprise to plan an overall M-Business strategy that considers customers, employees, suppliers, and business partners. The evolution and adoption of M-Commerce within those user constituencies must be a consideration in an enterprise's future endeavors. Be prepared to migrate from wireless communications and content to wireless commerce as your customers begin their adoption. Providing simple non-transactional M-Business services to customers today can also help to pave the way to transactional M-Commerce interactions with your customers in the future.
Wireless Data Example
AT&T Wireless
As an example of a wireless Internet offering provided by a major carrier, we'll take a look at the Digital PocketNet Service offered by AT&T Wireless. In addition to access to WAP-enabled Web sites, this service provides e-mail, address book, calendar, alerts, and to-do functionality for the cellular phone. The e-mail account has the format username@mobile.att.net and users can customize the settings of their wireless data services either directly on the cellular phone or via the AT&T Web site at http://www.att.com/mypocketnet. Updates to the preferences made on either the cell phone directly or via the Web site are reflected immediately in the service. For example, the Web site can be used to enter favorite links to Web sites or favorite phone numbers. The personal Web site provided by AT&T Digital PocketNet Service is powered by InfoSpace. Additionally, FoneSync software from Openwave is used to provide synchronization capabilities between the PocketNet Service and a user's Personal Information Management (PIM) software, i.e., Microsoft Outlook, Lotus Notes, Lotus Organizer, Symantec ACT!, and Goldmine.
Figure 2–6 shows some of the menu options and partner content available from the "Web Sites" section of the PocketNet service.
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Figure 2–6 Sample of Content Providers on the AT&T Digital PocketNet Service.
Wireless Application Service Provider Platforms
The next generation of wireless Internet data services provided by the wireless carriers has started to focus on the enterprise. One of the major trends has been for the wireless carriers to provide wireless application service provider (or WASP) services to enterprise customers. This gives an enterprise wireless access to a variety of applications and content. In 2001, almost every major wireless carrier in the United States announced plans to provide these WASP services to the enterprise by teaming with systems integrators and software companies.
It should be noted that prior to the wireless carriers entering the market, many wireless software vendors had been providing their technology as a hosted service to the enterprise; this had initially created the wireless application service provider market. Such companies included 2Roam, Aether Systems, Air2Web, and JP Mobile.
As examples of wireless carriers entering the WASP market, Sprint PCS announced a relationship with Compuware to deliver applications such as wireless meter reading, real-time tracking for the transportation industry, mobile phone applications, enterprise resource planning and customer relationship management tools. AT&T Wireless announced a relationship with Accenture to wirelessly enable applications such as corporate e-mail, customer information management, sales force automation, and inventory management. Cingular Wireless announced a relationship with Siebel Systems to offer Siebel eBusiness Applications across their network and a Corporate E-mail PLUS service to give enterprise employees wireless access to their Microsoft Exchange or Lotus Notes-based corporate e-mail systems.
Many business challenges still exist for the carrier versions of these wireless application service providers to become a hit with the enterprise. Their go-to-market strategy has to make sense for the enterprise buyer from both a business and technology standpoint. The business buyer needs to feel assured that the wireless application service provider understands their business and has a solution that can add real value. Business buyers may feel a little uncomfortable buying services from a wireless carrier who is unfamiliar with their industry and business processes. IT buyers need to feel assured that the offering provides all the required levels of security, performance, reliability, and scalability, in addition to contract flexibility and the breadth of the service and support offerings. When faced with selecting a single wireless carrier for wireless access to enterprise applications, the issue of coverage will also be very important.
Finally, the wireless application service provider will need to have smoothed out all the internal partnerships that need to occur to provide an end-to-end service offering for the enterprise. This will typically include relationships with systems integrators and a number of software vendors. One of the fundamental challenges is that wireless carriers do not typically understand enterprise needs in terms of application solutions. If wireless carriers can successfully cross over this hurdle, they will be well on the way to becoming valuable service providers for the enterprise and will have successfully broadened their data services from a consumer focus to an enterprise focus.
IT Environment
As we have discussed in Chapter 1, the IT department is also changing rapidly. Why are changes to the IT department important to an executive considering his or her business strategy for mobile customers, partners, or employees? By understanding the dynamics occurring within these departments, the business executive can have a better set of expectations around what can be delivered, how quickly, and how the progress of an initiative can be tracked and measured.
IT was under an increasing amount of scrutiny from the business side during the slowdown in the economy in mid- to late-2000. At the same time, IT departments were becoming increasingly complex in terms of application portfolio, technical architectures, hardware and software configurations, departmental skill sets, best practices, methodologies, standards and guidelines, and development lifecycles. The ratio of boxes (servers) to IT staff has been increasing and many enterprises and service providers have evolved to the "thousand server environment"—where literally thousands of computer servers are required to run the business.
Why was IT never scrutinized over the past couple of years? Mostly because the economy had been so strong that IT spending was questioned, but not scrutinized. The downturn in the economy in late 2000 and early 2001 caused IT business management practices to be improved and IT expenditures to be more justified. The total cost of computing and return on investment is being more accurately tracked, reported, and articulated to the business.
It is important to note that if we look at the changes within the IT department on a longer time scale (that is, in terms of decades), we find that this scrutiny in terms of costs and justification for projects is actually a return to normalcy. In fact, the anomaly was the couple of years during the Internet and E-Business era of the mid to late 90s, where spending was increased and the race was to capture the market and stay ahead of the competition.
These forces of increasing scrutiny from the business side, together with increasing complexity and the evolution of IT from a cost center to a strategic partner, have meant that mobile business initiatives and other initiatives are now becoming more carefully designed, developed, and deployed. Moreover, IT is now equipped with additional, if perhaps rudimentary, tools for the calculation of total cost of computing and the return on investment for IT initiatives.
IT has also shifted some of its focus from revenue generation activities and applications toward applications that can help to improve productivity and reduce costs for the enterprise. It is here that M-Business initiatives can have their first impact upon the enterprise. Later, as the technologies mature and consumer acceptance and penetration increases, M-Business initiatives can play an equal role as a source of revenue generation.
When looking at the relationship between IT and the business side, it is worth noting the top ten problems that customers have reported with their IT organizations. The following top ten list is taken from a report by the Giga Information Group:
The value of IT is not understood
Projects are not executed properly
Project selection is wrong
IT means business prevention
IT cannot maintain a robust infrastructure
IT leadership does not contain costs
IT is not business savvy
IT does not establish and maintain an effective dialog with the rest of the business
Results need to be reported better
IT people are not customer oriented
The takeaway for the business executive considering the potential of mobile business for his or her employees, customers, suppliers, and business partners, is to ensure a strong dialog and relationship with IT. The dialog should be built around the goal of creating enterprise value through the leverage of IT resources.
Wireless Internet Value Chain
When looking at the current state of M-Business, it often helps to view the entire value chain in order to see how companies are positioning themselves within their markets. The wireless Internet value chain appears to be a lot more complex than the E-Business value chains that have preceded it. There are more moving parts and more players involved. As we migrate from 2G to 3G wireless networks, the value chain complexity increases even further, as more application and content providers take advantage of the higher capabilities of the networks.
Another part of the complexity of the value chain is owing to the number of standards and technologies involved. Not only do we have Internet hardware and software vendors to contend with, as was the case in the E-Business value chain. Now we are dealing with device manufacturers for PDAs and cell phones, carriers for wireless networks, various standards such as WAP and WML (Wireless Markup Language), and a host of other complexities—including coverage, security, bandwidth, provisioning, billing, and both voice and data applications.
As mobile business extends the enterprise to any-location and any-time access, we now start to see how established industries can play a more integral part in the value chain. For example:
A commercial real estate property owner can gain revenue by placing wireless technologies that boost cellular carriers' signals inside a building. Inner Wireless is an example of a company that provides passive cell tower technologies to the commercial real estate industry. The technology has been in field tests. It has proven successful not only within office spaces, but also within the parking garages and elevators of said properties. This technology solves a large problem cellular signals just one foot inside a building are often 100 times less than those just one foot outside the building with a corresponding effect on the service quality provided to the end user.
Airline carriers can provide wireless LAN capabilities in their lounges and at the gate. Using the MobileStar service in several airports in the United States, American Airlines has rolled out wireless LAN service to gates and Admirals Club lounges. This is being done in New York (JFK), Newark, San Francisco, Chicago (O'Hare), and Baltimore/Washington.
Automotive manufacturers can build in telematics services as a value-added technology within their luxury cars. Telematics services from companies such as ATX Technologies provide drivers with emergency services (such as automatic collision notification, emergency response, and roadside assistance). They also provide navigation and information services, such as routing assistance, traffic, weather, news, financial information, and sports information—all of which can be defined and customized from a personalized Internet page.
Coffee shops can provide wireless LAN capabilities. Starbucks, along with its partners Compaq and MobileStar, is starting to offer wireless LAN capabilities to customers. Customers provide their own laptops or PDAs, but are able to use the Starbucks wireless LAN access point. Pricing models for these kinds of services appear to be evolving, but can either be an hourly rate or a flat rate per month.
Value Chain for Enterprise Wireless Data
Figure 2–7 shows a typical M-Business value chain from the network operator to the enterprise customer.
)
Figure 2–7 M-Business Value Chain for the Enterprise.
In this sample value chain, we can imagine the case of an enterprise giving wireless access to e-mail, Internet, and intranet content to their employees. In this case, we can truly see how extensive any given value chain can become. The network operator may be a wireless carrier such as Sprint PCS. The network infrastructure provider may be a networking equipment provider such as CISCO. The middleware/gateway provider may be a wireless middleware vendor such as Brience. The content aggregator may be a wireless vendor such as InfoSpace. The application provider may be a wireless application service provider such as JP Mobile. Finally, the device manufacturer may be a handset manufacturer such as Ericsson.
In this example, the enterprise customer might access a WAP-enabled Internet site via InfoSpace, his or her e-mail on Microsoft Exchange (enabled for wireless access by JP Mobile), and an enterprise application on the intranet via wireless middleware from Brience.
The major components of the value chain include the networking components (both the networks themselves and the operators of those networks), the communications software components (including infrastructure software such as wireless middleware and gateways), content and application services, and the end user devices.
If we add the physical location component to the equation, that is to say the physical point of access to the applications and services, the value chain changes. This category could be included within the application provider section of the value chain or perhaps within a new category labeled access provider.
Players within this application provider or access provider category could be the physical access providers, such as airlines and hotels, together with the located-based services companies who provide the location information for end users, target destinations, or assets that need to be tracked.
Value Chain for Consumer Wireless Data
Figure 2–8 shows a simplified mobile business value chain for the consumer.
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Figure 2–8 M-Business Value Chain for the Consumer.
The main difference between the consumer-focused value chain for M-Business when compared to the enterprise-focused value chain is that the consumer value chain focuses more on external retailers and content providers. It has less to do with the internal wireless middleware and enterprise applications that characterize the enterprise space.
The value chain becomes more complex as network operators work with any array of retailers, financial institutions, content providers, and advertisers to assemble their wireless data portals for the consumer population.
Key Wireless Companies
Some of the key players who are shaping the mobile economy include the device manufacturers, equipment manufacturers, wireless carriers, wireless service providers, telematics providers, and wireless software companies. Table 2–3 shows a sample listing of some of these players. Since the market is moving so quickly and smaller players often merge, are acquired, or go out of business, this table simply shows some of the current players in the space at the time of this writing. It is certainly not to be considered an exhaustive list.
Publicly-Traded Wireless Vendors
Companies in the wireless sector have enjoyed the same roller-coaster ride in terms of their stock price as the rest of the technology industry. Some of the major players are worth studying. By doing so, we may better understand the market dynamics and the interdependencies that the various players have on one another in the value chain.
A downturn in economic outlook for the wireless carriers has a ripple effect for the telecom equipment manufacturers and the handset manufacturers. This filters down along all aspects of the value chain. The drivers of the market can be considered the telecommunications providers—both wireline and wireless. The telecom equipment manufacturers follow after them, with the software companies focused on carrier-specific wireless applications and the wireless application service providers close behind.
M-Business magazine's M-Business 50 Stock Index presents a good sampling of the major players within the mobile economy. It tracks 50 public companies, ranging from the global telecom giants to mobile startups. Table 2–4 presents an alphabetical listing of these players together with their respective stock symbols.
Table 2–3 Key Wireless Companies in the Wireless Internet Value Chain
Device Manufacturers |
Wireless Middleware/Gateways |
Wireless Carriers |
|
Gateways
Middleware
|
North America
Japan
Europe
Asia/Pacific
|
Wireless Applications |
Wireless Applications |
Wireless Applications |
CRM
FFA
SFA
Alerts/Messaging/Monitoring
|
M-Commerce
Portals
Location-Based
|
Security
TelematicsATX TechnologiesUM/UCOpenwaveVoice
|
Operating System & Browser Manufacturers |
Wireless Equipment Manufacturers |
Wireless Application Service Providers |
|
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Table 2–4 M-Business 50 Stock Index. Source: M-Business Magazine
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Company Name |
Symbol |
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Aether Systems |
AETH |
|
Alcatel |
ALA |
|
AT&T Wireless Group |
AWE |
|
At Road |
ARDI |
|
AvantGo |
AVGO |
|
BellSouth |
BLS |
|
Boston Communications Group |
BCGI |
|
British Telecommunications |
BTY |
|
CellPoint |
CLPT |
|
Certicom |
CERT |
|
Cisco Systems |
CSCO |
|
Comverse Technology |
CMVT |
|
Deutsche Telekom |
DT |
|
Ericsson |
ERICY |
|
Extended Systems |
XTND |
|
GoAmerica |
GOAM |
|
Handspring |
HAND |
|
Interdigital Communications |
IDCC |
|
i3 Mobile |
IIIM |
|
InfoSpace |
INSP |
|
Leap Wireless International |
LWIN |
|
Motient |
MTNT |
|
Motorola |
MOT |
|
Nextel Communications |
NXTL |
|
Nokia |
NOK |
|
Nortel Networks |
NT |
|
Novatel Wireless |
NVTL |
|
NTT DoCoMo |
NTDMY |
|
OmniSky |
OMNY |
|
Openwave Systems |
OPWV |
|
Orange |
ORNGF |
|
Palm |
PALM |
|
Pumatech |
PUMA |
|
Qualcomm |
QCOM |
|
Research in Motion |
RIMM |
|
SBC Communications |
SBC |
|
724 Solutions |
SVNX |
|
Sierra Wireless |
SWIR |
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SignalSoft |
SGSF |
|
Sonera |
SNRA |
|
Sprint PCS Group |
PCS |
|
Symbol Technologies |
SBL |
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Telecommunication Systems |
TSYS |
|
Telefónica Móviles |
TEM |
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Telstra |
TLS |
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Trimble |
TRMB |
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U.S. Cellular |
USM |
|
Verisign |
VRSN |
|
Verizon Communications |
VZ |
|
Vodafone Group |
VOD |
Since this list is subject to change, I recommend you visit the M-Business magazine Web site, http://www.mbusinessdaily.com, for the latest list of companies in the Index and the latest stock prices. The Index serves as a useful barometer for the wireless and mobile industry and can be compared with the NYSE, Dow Jones, and NASDAQ indices.
Key Applications
Applications for M-Business within the enterprise can be broken into those that affect employees, customers, suppliers, and business partners. This short introduction to wireless applications within the enterprise will serve as a sampling of the subject matter. This matter will be treated in much greater detail throughout the rest of the book, in case studies and in the exploration of applications including business intelligence, customer relationship management, sales force automation, field force automation, and supply chain management.
Analyst surveys in the U.S. and Europe have shown that employees will benefit first from wireless enablement of the enterprise. M-Business applications will be used to increase employee productivity and will be followed by applications that are offered to customers, partners, and suppliers.
Thus, the broad categories of wireless enablement within the enterprise can be listed as follows:
Wireless Enablement of Employees (B2E)
Wireless Enablement of Customers (B2C)
Wireless Enablement of Partners & Suppliers (B2B)
The B2B category includes supply chain management, enterprise resource planning, and electronic marketplaces. The B2E category includes the sales force and field service workers in addition to executives, managers, and office workers.
It is important that a holistic strategy is adopted for these categories of wireless enablement. For example, employees may well need to gain access to the same applications, processes, and information as customers or partners. Additionally, as we shall discover in some of the case studies such as ADC Telecommunications, M-Business initiatives targeted for customers often turn out to be highly desirable for internal employee access as well.
All three of these categories of wireless enablement are briefly discussed in this section with a focus on some of the areas of opportunity and their benefits to the enterprise.
Wireless Enablement of Employees
Wireless enablement for employees is basically about giving employees the access to the information and transactions they need in order to perform their work-related activities. Wireless enablement can take the form of an extension of existing enterprise applications into the wireless domain. Or it can take the form of entirely new applications built from the ground up (either package or custom) specifically for use in a wireless or mobile scenario. These applications can have a profound productivity improvement for employees, the sales force, the field force, and for executives within an enterprise.
The following table (2–5) presents some of the areas of opportunity for wireless enablement of employees and the benefits that may be realized:
Table 2–5 Opportunities and Benefits for Wireless Enablement of Employees
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Opportunities |
Enterprise Benefits |
|
Communications Basic e-mail, SMS text messaging, unified messaging, alerts and notifications Personal Information Management (PIM) Intranet Access Internet Access Sales Force Applications Field Force Applications Enterprise Resource Planning Applications Executive Dashboard / Business Intelligence Applications |
Productivity Delivery of Time-Sensitive and/or Location-Relevant Information Cost Reduction Reduced Asset Downtime Reduced Resource Costs (such as phone, fax, printing, mailing) Revenue Generation Knowledge/Decision Making Improved Executive Reporting and Decision Making Delivery of Time-Sensitive and/or Location-Relevant Information Improved Data Capture and Accuracy Satisfaction Competitive Advantage |
Wireless Enablement of Customers
Wireless enablement of customers can take many forms: branded cell phones or pagers to increase customer loyalty; access to hotel and airline reservations and information; telematics services for emergency location and assistance; M-Commerce transactions for wireless purchases such as stocks; wireless access to order status information; product and service information via wireless enablement of a corporate Web site; alerts and notifications on items of interest; location-based services for marketing; unified messaging for customer support; wireless gaming; informational applications such as news and weather.
The challenge on the business-to-consumer side for the enterprise is to use wireless technologies and applications in order to deepen the relationship with the customer. This needs to be done while providing applications that are easy-to-use, fulfill a need on the customer end, are actionable or informational, and support the diverse set of devices, networks, and standards in use by consumers and business customers.
Table 2–6 presents some of the areas of opportunity for wireless enablement of customers and the benefits that may be realized:
Wireless Enablement of Partners and Suppliers
Wireless enablement of partners and suppliers can take on many aspects based upon the role of the partner or supplier. Partners may be resellers, value-added resellers, distributors, wholesalers, suppliers, OEMs, industry associations, and electronic marketplace participants. A taxonomy for the various roles of partners is very much needed if one is not yet in existence. In this section, we take a look at partners in the traditional supply chain and also within electronic marketplaces.
The supply chain can benefit from wireless enablement in almost every process, including purchasing, manufacturing, distribution, and customer service and sales. Mobile technologies have long been used within the supply chain and have typically consisted of bar code scanners for improved data capture and asset management. New devices such as ruggedized handhelds from Symbol supporting both Palm OS and Windows CE operating systems, and additional means of connectivity including wireless LANs and wireless WANs mean that supply chain operations have a full range of alternatives for how, where, and when information is captured and acted upon. Information, goods, and funds flows between partners in the supply chain can now move in real-time versus near real-time or nightly batch operations.
As various industries buy and sell products and services through public or private electronic marketplaces, there is a need for continuous communications with these marketplaces in order to gather pricing information, news and events, order status, bid status, approval requests, and sales histories.
Table 2–6 Opportunities and Benefits for Wireless Enablement of Customers
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Opportunities |
Enterprise Benefits |
|
Communications/Collaboration Content Transactions/Commerce Customer Relationship Management |
Ability to Enter New Markets Ability to Offer New Products and Services Increased Revenues Reduced Costs Increased Customer Satisfaction Increased Customer Loyalty Competitive Advantage |
Extending these public or private electronic marketplaces with access via wireless devices can provide a solution to this need for continuous information and transactions. One of the most simple examples is that of being alerted to bidding events such as an out-bid notification during an online auction. The time criticality of the auction process means that wireless access to the marketplace is an essential tool for many participants.
The following table (2–7) presents some of the areas of opportunity for wireless enablement of partners and suppliers and the benefits that may be realized:
For more details and examples about M-Business application functionality, scenarios and benefits for the enterprise please see the M-Business Applications and Processes section within Chapter 4, Process Models and Applications for M-Business Agility. This chapter goes into detail on categories such as business intelligence, sales force automation, field force automation, customer relationship management, and supply chain management. Additionally, you can find numerous real-life case studies in Chapter 5, Industry Examples.
Table 2–7 Opportunities and Benefits for Wireless Enablement of Partners and Suppliers
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Opportunities |
Enterprise Benefits |
|
Supply Chain Management Electronic Marketplaces Real-time personalized alerts based on trading events |
Productivity Revenue Generation Cost Reduction Satisfaction Knowledge/Decision Making Competitive Advantage |