Profiting from five trends that are changing mobility

These trends affect how employees communicate, how companies do business and the cost of mobile services

Casual observers understand that wireless and mobile technology is evolving rapidly. It's tougher, though, to understand how to benefit from these new trends in mobility.

"In five years, we'll see a very different landscape when it comes to mobile and wireless issues," said Derek Kerton, principal at The Kerton Group, a mobility consultancy. "It won't be a matter of whether things are coming soon but, rather, it'll be a matter of 'How do you like it?'"

We asked Kerton and two other leading industry analysts to discuss the trends they see unfolding and how those trends will affect businesses. We didn't ask about long-term, maybe-yes, maybe-no trends. Rather, the six trends the analysts highlighted are, to varying degrees, already under way and are starting to change how mobile employees communicate, how their organizations do business and how much mobile services cost.

1. Increasing competition among wireless service providers

Benefits: More choices, lower prices, more attractive service plans.

A visible example of the increasing competition among cellular operators was Verizon Communications Inc.'s recent announcement that it is reducing the fees it charges when customers terminate their contracts early. Expect similar announcements from other cellular operators, according to Phil Redman, a research vice president at Gartner Inc.

"The competition has been there all along, but we'll be seeing more of that sort of thing," Redman said. Enterprises already have a good amount of bargaining power with cellular operators because they are negotiating to buy a lot of minutes, he noted, but this trend will provide even more leverage, at least if IT and telecommunications managers take advantage of it.

There are several reasons competition is heating up now, but a big one is that the U.S. market is approaching the saturation point. Currently, about 70% of the population has cell phones, according to Ken Hyers, a principal analyst at ABI Research. Now, instead of marketing primarily to customers who don't yet have cellular service, it is becoming more important to cellular operators to lure customers away from other operators, he said. That will increasingly lead to cellular operators making their products more attractive, if not less expensive.

"If you're a Sprint or Verizon, adding something like a no-penalty plan [with low contract-termination fees] lowers the bar for enterprise customers to try you out," Hyers said. "I'm guessing the other operators will have to follow with no-penalty plans."

The good news for those who buy cellular services is that the current saturation level in the U.S. will continue creeping up in coming years, and as it does, the competition likely will become more intense.

"I certainly think that hitting 80% saturation and, eventually, being above 90% is where this market is going," Hyers said.

2. Data everywhere

Benefit: Real-time mobile business applications, more productivity.

Besides increased competition among cellular carriers, new types of wireless technologies are emerging, and new wireless Internet service providers are offering that technology. That will not only increase competition but will also enable new applications that benefit enterprises.

Currently, most cellular operators offer 3G data service with typical speeds of 500Kbit/sec. However, new types of wireless broadband are emerging, such as mobile WiMax, which will likely start being available in the next year and will offer typical speeds in the 1Mbit/sec. range. Intel Corp. is perhaps the strongest supporter of mobile WiMax, having recently invested in cellular pioneer Craig McCaw's Clearwire Corp., which offers fixed WiMax service and will use Intel's seed money to create a nationwide mobile WiMax network.

But mobile WiMax isn't the only new form of wireless broadband. Already available to service providers is Qualcomm Inc.'s Flash-OFDM. And Sprint Corp. recently invested in IPWireless Inc., which developed a third type of wireless broadband called UMTS TDD.

Cellular operators might offer wireless broadband -- Sprint has said it surely will do so -- but it will also be offered by a host of newer providers such as Clearwire. That, in turn, is widely expected to create new competition, which will increase choice and drive down prices. Currently, 3G is the primary mobile broadband game in town, and it's pricey. Single users pay $60 per month with a two-year contract.

All these technologies mean that mobile workers can log onto the Internet and corporate networks at reasonably fast speeds from virtually anywhere with little fuss using laptops and smaller mobile devices such as smart phones. That, in turn, is leading to significant changes in how businesses work, some of which have yet to become apparent, according to Kerton.

"This trend will give our laptops the same mobility to connect from wherever we are that we already have with our phones," Kerton said. "That, in turn, will increase the speed of business and reduce friction, and more important, it will save us time. We won't have to drive back to the office or find a Wi-Fi hot spot."

Kerton said that, by "real-time enterprise," he's talking about making key applications and data available to workers in the field as they're needed. For example, field service representatives can check the availability of parts, and sales personnel can check inventory and place orders.

The trick, analysts agree, is both to find the right applications to mobilize and to shop around for the best mix of access methods so that key mobile employees are never out of touch.

3. Mobile voice over IP
Benefit: Expands mobile phone coverage, which increases productivity and potentially lowers costs.

Ubiquitous mobile data opens the door to new types of applications. For example, consumers could have access to streaming audio and video no matter where they are. Such applications could be useful to enterprises, such as videos for field service and training. But perhaps the biggest enterprise application that wireless broadband enables will be mobile voice over IP (VoIP).

This already has been the subject of much discussion. Not everybody is convinced that VoIP via wireless broadband will supplant cellular voice but, at the very least, it will be useful for specific applications.

"Where wireless voice really applies is for people who aren't at their desks much or when you need better in-building coverage," Gartner's Redman said. "This is the deskless class -- they share phones and are highly mobile, so enterprises are looking at ways to support them at lower cost."

Examples of that include hospitals, where nurses share phones at a nursing station but are often working throughout the facility. Warehouses are another example.

"The cost-benefit analysis is to determine whether workers need to be in touch wherever they are versus waiting for them to get back to their desks," Redman said. "There would be a somewhat higher cost since you have to put in more wireless infrastructure, but the benefits would be higher."

Some believe that wireless Internet service providers and IP telephony vendors such as Skype Technologies SA and Vonage Holdings Corp. will take some of the money now spent with cellular operators. However, Hyers has his doubts.

"I tend to believe that cellular minutes are getting cheaper and coverage is getting wider," he said. "What we're seeing is enterprises trying to use a number of different ways to stay connected and transfer information. That's what this trend is really about."

4. Fixed-mobile convergence
Benefit: Consolidation of fixed and wireless lines, lower cost, easier administration.

Fixed-mobile convergence (FMC) refers to technologies that enable use of a single phone wherever you are. When cellular service is available, the phone can access that. When VoIP service is available, the phone accesses that. Users can choose the least-expensive service or the service with the strongest signal and can switch seamlessly between systems.

"The bottom-liners in companies like FMC, although IT managers often don't," Kerton said. "The primary benefit is cost, and the secondary benefit is better coverage. This will allow [cellular] minutes to be cut." But, he added, it typically means beefing up an enterprise's wireless network to handle the extra voice volume.

"This [FMC] is turning into the reality of unified communications," Redman said. "This isn't necessarily new, but it's been too expensive to implement in the past, and the cost structure is coming down. It used to be an overlay on existing enterprise telephony infrastructures, so it was an extra cost. But the next-generation private branch exchanges not only support fixed-line VoIP but also wireless, and there could be a lot of voice and data integration, things like a single voice and e-mail mailbox."

Besides needing new or upgraded telephony infrastructure, truly mobile FMC requires some level of support from cellular operators. In addition, technologies like Unlicensed Mobile Access and IP Multimedia Subsystem, which are needed to connect mobile and Wi-Fi networks, still haven't been proved in day-to-day use.

Still, FMC is expected to be widely adopted because it has support from large old-line fixed telecommunications operators, which see it as an opportunity to switch cellular minutes to VoIP minutes, for which they get paid. And, as Kerton said, it also has the support of the bottom-liners in many companies.

5. Personal hardware and software in the office


Benefit: Early trend-spotting, inexpensive field testing.

When it comes to mobility, end users bringing their own hardware and software into the enterprise is hardly a new trend. Perhaps the most widely reported manifestation took place in the mid-1990s, when many workers bought their own handheld devices and used them to track their business contacts and appointments. Over time, IT managers came to understand that handhelds made employees more efficient and started to support them.

Kerton, Redman and Hyers pointed out several areas in which this trend is recurring.

"Podcasting is a great example," Hyers said. "Another example is blogs. Many companies that are involved in communicating their expertise and technology externally are using them. With both podcasting and blogs, employees are better able to communicate with customers and suppliers, Hyers noted. Podcasting is particularly useful to mobile workers because they can take a podcast with them and play it for clients and customers.

There are, however, some cautions about adopting technology that end users bring into the enterprise.

"You have to make sure that whatever information goes up on the corporate intranet is available on a mobile device," he said. "You also have to match the device to the task. For example, if you're creating something accessible to mobile workers and if you use Flash or podcasts, BlackBerries typically don't support those things."

Redman added instant messaging to the list, which has grown so fast as a business tool that enterprise-centric products are now available, such as IBM's Lotus Sametime.

"It [instant messaging] came in the door through services like AOL. Individual users saw its use first," Redman said. "Enough people started using it that now enterprises are starting to standardize." He said he sees the same thing occurring in some organizations with consumer-level VoIP products like those of Skype.

While some IT shops are resistant to such consumer-level products, the analysts agreed that it pays to keep an open mind. That's particularly true because people are always looking for ways to be more efficient and make their jobs easier. That, in turn, helps the organization.

"BlackBerries didn't immediately pass the IT sniff test," Hyers noted. "Now they do."

David Haskin is a freelance writer specializing in mobile and wireless issues.

Copyright © 2006 IDG Communications, Inc.

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