How to Sell: Wireless - Part 2 - Picking up wireless
Wireless networks are finding enthusiastic adopters in some surprising places. Pete Morris looks at the most promising markets for this growing technology.
The vanguard of technological change is usually made up of the big spenders: the corporates with deep pockets and business strategies measured in decades.
At the other end of the spectrum are the small businesses and home users, which are seen as cautious customers that prefer tried and tested technologies.
Of course, there are exceptions to most rules, and wireless networking is proving to be one of them.
Alan Wright, head of wireless development at reseller ALLnet, said: "The take-up of wireless networks is the opposite of what we normally expect in IT.
"The early adopters of technology are normally banks and the financial sector, but not so with wireless."
Because of well publicised concerns about security and the sheer pace of technological change, corporates are standing on the sidelines as small businesses and home users, less concerned with long-term planning, rush to take advantage.
Peter Blampied, operations director at vendor US Robotics, said: "For home users and small businesses, wireless is a no-brainer. You don't want to drill holes and lay cabling in your home, do you?"
The price of wireless kit has come down, and the retail channel has spotted and embraced the opportunity. But ironically, it seems that the success of wireless networking in the home and small business market has prevented it from being taken up seriously by large organisations.
Corporates have been able to dismiss it as being an insecure consumer technology rather than a way to extend their business reach.
The way that wireless has been marketed to creative businesses, too, with much airy talk of 'data clouds', has done nothing to reassure mainstream firms that wireless networking is a solid, down-to-earth technology.
Positive signs
But there are signs that business markets are starting to emerge, although here too, not in the way technology is usually adopted. The public sector, especially education and the health service, are at the forefront, alongside retail and distribution.
"Wireless networks have been embraced by the public sector and retail, because they can see business benefits from day one," explained Wright.
Public sector customers are using wireless technology both as wide area networks linking separate buildings cheaply with point-to-point connections, and to create internal local area networks (Lans), he claimed.
"Schools are using wireless networks to improve PC access in the classroom," said Wright.
Many schools are housed in old buildings, and want to avoid running cabling into classrooms because of health and safety considerations.
As more schools see the benefit of providing wireless to the classroom, allowing more children to share PCs and resources, there will be an increased demand for access points.
Many education resellers have already made this connection and are starting to focus hard on this market.
A similar situation is developing in the health service. As plans to create an electronic patient record system and a drugs prescription programme take shape, it becomes increasingly important for clinicians to be able to access records at the patient's bedside.
"Obviously it is impossible to cable up to the bedside in hospital," said Wright. "So wireless networking will be used."
Wireless will be an integral part of the huge NHS IT programme, but private sector businesses do not perceive the same immediate benefits in wireless networks.
They see wireless as a complementary technology, designed not to replace the structured cable network but rather to extend its range, allowing mobile workers to get network access.
And they are still concerned that this complementary technology has a downside that could outweigh the benefits.
Security concerns
"The private sector has big concerns about the security of wireless networks," warned Wright.
A survey commissioned by ALLnet and published in August found that the two main reasons for caution about wireless Lans are that customers have no clear view of the benefits (48 per cent of respondents) and that they have security concerns (35 per cent).
"Resellers need to push the improved security of wireless networks," explained Wright.
"The press coverage has been very negative and these concerns have to be addressed upfront. The message the resellers should give out is that wireless security has vastly improved. They need to reassure the customer."
ALLnet has issued a white paper detailing an investment-based business case for customers to choose wireless. The benefits it stresses include ease of movement and connectivity, increased productivity and reduced IT support costs.
One of the key ways to reassure prospective customers is for resellers to practise what they preach. It is no surprise that many of the resellers and suppliers that are doing well in the wireless market run their own business (or at least parts of it) on wireless networks.
This, they say, not only improves their efficiency and allows remote sales staff to access the network, but reassures the customer that wireless can be used securely.
But there is a view that resellers are not doing enough to overcome customer resistance to wireless networks.
"I don't think resellers are pushing hard enough," stated Ross Green, business development manager at vendor SMC Networks.
"They are worried about low margins as the price of the kit comes down, but the margin they can get from services is significantly higher. They should be pushing much harder."
SMC Networks sells a range of wireless networking products, including access points, cards and adaptors. Like other wireless networking vendors, SMC has made the bulk of its sales in the home and small-business markets.
About 70 per cent of its wireless business is with home and small-business users and 30 per cent with corporates.
"Part of the problem is that wireless technology has moved so fast that corporate customers' perceptions of it have not caught up with what the products can do," explained Green.
He added that resellers can also benefit from concerns about security loopholes by helping customers to implement secure systems for using wireless networks.
Although security has improved, there are still problems with, for example, users plugging in rogue access points that they have bought themselves in an attempt to speed up the network.
This, of course, threatens the security of the network, and the reseller can put auditing and monitoring procedures in place as a way of adding value for the customer.
Like the public sector, retail and distribution are beginning to see the advantages of wireless networks. Blampied gives one example of wireless being used in an environment that is not suitable for structured cabling.
"Wireless networks allow customers to do real-time stock-taking by putting access points in warehouses and using Wi-Fi devices to connect to the network," he said.
Retailers are keen to have the option of moving their electronic point of sale terminals around as they change store layouts without needing to rewire. Wireless can give them the flexibility to do this.
Once the cost of moving structured cabling is factored in, the cost of wireless networking starts to look very favourable.
Better the devil you know
This is not, however, the case in business. Corporates have already made their investment in a cabled infrastructure and they are not likely to junk that for something that they perceive, rightly or wrongly, as less secure.
"The reality is that only an idiot would rip out an Ethernet network to replace it with wireless," said Blampied.
"Wireless is a way for businesses to extend their network into new areas, not to replace the one they already have."
This is also true of green field sites. Although in theory they provide the chance to start from scratch, very few businesses would choose to implement a wireless network instead of structured cabling.
"Typically, green field sites tend to be call centres," explained Wright. "The staff work at terminals and do not have to be mobile. The only requirement that these sites have is for huge bandwidth, and cabling is the best way to provide that."
However, when planning a new site, businesses do have an opportunity to put in a wireless network alongside cabling at an early stage, and to make sure that they integrate.
So it is the expansion of the corporate network that is likely to be the key emerging market for wireless. Security has improved, standards and compatibility issues are settling down, and resellers are becoming more skilled.
"Wireless will become more common in the enterprise," said Bal Phull, UK marketing and communications manager at vendor D-Link.
"There are tests going on among many customers at the moment, but they take a long time to commit, and they have to make sure that they address compatibility issues. Wireless is a way for enterprise customers to extend their network."
One of the key drivers for the credibility of wireless has been the support of Intel and Microsoft, and the production of more and more 'wireless-ready' laptops.
Phull suggested that this means the card side of the business will fizzle out, but VARs will be able to take advantage of the demand for more access points.
"The positioning of access points will be a big opportunity for resellers [which can work] with people who want to provide hotspots," said Phull.
In these early days of wireless networking, it is the hotspot business that has caught the imagination. Wi-Fi hotspots have been opened across the country in cafes, health clubs, hotels and airports.
According to analyst Gartner, the number of people set to use the 4,000 installed public hotspots around the UK will reach 500,000 this year. Big UK operators include The Cloud and Broadreach.
Critics have pointed out that there is a good deal of hype about projected user figures down the line, and that the level of investment being put into these networks seems excessive.
Where the idea of hotspots may work well, however, is in a public space within a business.
"This is a very interesting area," said Wright. "There are businesses that want to set up their own hotspots in places like staff canteens."
These would allow staff to work in a seamless and flexible way, which is what wireless networking has been promising all along.
Once wireless does get a foothold in the enterprise, through applications such as hotspots, it is likely to spread rapidly and become an integral part of the corporate network. Wireless, it seems, may be about to come in from the cold.
CASE STUDY: PROJECT TELECOM
One reseller making progress selling wireless to business customers is Project Telecom. It focuses primarily on providing mobile email access to corporates, based on BlackBerry technology.
"Mobile workers using BlackBerry devices can communicate more efficiently," said Project Telecom representative Matthew Cooke.
He claims that, at present, wireless technology is still seen as an add-on for the customer, but that is beginning to change.
"In terms of vertical markets the key ones are the financial sector, particularly banks, the legal sector and recruitment," he explained.
With law firms, for example, the ability to have partners responding to client emails immediately while on the move means the investment in wireless pays for itself almost immediately.
"Wireless can appeal to many different business sectors, because it is about maximising the way that staff can work," said Cooke.
One of the advantages of wireless is that those who use it tend to be senior staff who travel between offices and visit other sites.
This means that influential people in the business see the benefits of using wireless technology and back it. If senior staff in a business get enthusiastic about wireless, that is likely to filter down.
So there are wireless opportunities among corporates, even if they are still evaluating the technology.
For VARs the key is getting to know how the customer's business processes work, so that any wireless system can be properly tailored to its needs. The reseller also needs to talk to the networks that deliver the service.
"Specialist resellers do have the necessary skills to sell and support wireless products," said Cooke. "But there are not that many resellers that have that expertise. It takes training and it takes time."
It is a serious commitment but, as Cooke explained, it is a chance to provide a fantastic value-added offering.
Also in this series:
How to Sell: Wireless - Part 1 - Joining the wireless set
How to Sell: Wireless - Part 3 - Securing sales
How to Sell: Wireless - Part 4 - Unfurling the standards
How to Sell: Wireless - Part 5 - Hotspots heat up
CONTACTS:
ALLnet (0118) 921 6022
www.allnet.co.uk
D-Link (020) 8731 5555
www.dlink.co.uk
Project Telecom (0870) 848 7711
www.projtel.co.uk
SMC Networks (01234) 831 415
www.smc-europe.com
US Robotics (0870) 844 4546
www.usr-emea.com