Hotspot providers aim for the enterprise

Ready or not, the rapid rise of mobile wireless “hotspot” locations across Canada means that enterprises will have to deal with the technology sooner or later, experts say.

Indeed, the future of hotspots and their position within the enterprise were the issues at hand during an Intel Corp.-sponsored Wi-Fi and wireless LAN roundtable last month in Toronto.

Doug Cooper, country manager at Intel Canada, noted that the stigma surrounding enterprise Wi-Fi security still lingers, despite the issue being technically solved.

And whether organizations condone it or not, workers are using their Wi-Fi-enabled notebook computers and handheld devices to connect to Wi-Fi hotspots. IDC Canada Ltd. estimates there will be 450 commercial hotspot areas – in hotels, coffee shops, airports and other public locations – within Canada by the end of 2003, rising to 4,200 locations in 2007. IDC added that the number of users will climb from 5,400 to 25,000 respectively.

Analysts note that WLAN equipment sales in the public access hotspot market are growing. Contrary to the gloomy conditions surrounding the Canadian telecommunications industry, wireless has been a bright spot, said Lawrence Surtees, analyst for IDC Canada in Toronto. But there are still obstacles to deal with, such as roaming, billing and security. A recent IDC study predicts that WLAN equipment sales into hotspots should surge 141 per cent per year-over-year for the next five years.

Other than the early adopters driving growth in the small- to medium-sized business (SMB) space – as a low-cost alternative to cable-based networking – there is still a long way to go. And as wireless hotspots increase in popularity, so do concerns, particularly over security. Workers using the technology need to be aware of the importance of firewalls and VPNs, Surtees said.

Last January, the Mountainview, Calif.-based Wi-Fi Alliance, a non-profit organization formed in 1999 to certify interoperability of IEEE 802.11 products, launched a global branding initiative to better recognize public WLAN locations.

For wireless infrastructure service providers (WISPs), the current business model for hotspots needs to reach critical mass in the enterprise to survive, according to Sean O’Mahony, CEO of Vancouver-based FatPort Corp.

Ultimately, the question is whether enterprises perceive the hotspot phenomenon as having immediate business value. FatPort, with 90 locations and approximately 2,300 subscribers, anticipates rapid growth by the end of the year, but O’Mahony is determined to “sell into the enterprise.”

Wireless carriers such as FatPort and Spotnik Mobile Inc. are trying to tap into the technology’s viability as a value-add-type service. But the future isn’t now – by 2005, hotspot revenues, according to IDC Canada, will account for only $50 million.

Enterprises are willing to pay, O’Mahony offered, adding that providing the technology on a pay-as-you-go or monthly payment plan actually legitimizes the technology in the eyes of the enterprise.

Murray McCaig, CEO for Spotnik, noted that while pricing is still an issue, until enterprises are convinced that WLANs are secure and begin to roll out the technology to their mobile employees, heavy adoption likely won’t happen.

According to Sumit Deshpande, wireless technology strategist for Computer Associates International (CA) Inc. in Islandia, N.Y., wireless in the enterprise is somewhat different from wireless anywhere else. The amount of sensitive information and data make provisioning the security and management policies key, Deshpande added.

Canadian equipment vendors see WLAN as a way to extend the enterprise network, Surtees said, since it aligns with enterprise mobility and IP strategies. As part of an enterprise best-practice strategy, Surtees noted that IT departments need to be up to the task of dealing with wired and wireless networks as one, in terms of management and security.

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Jim Love, Chief Content Officer, IT World Canada

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