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Behind the music: Wireless data

The wireless data industry started as a dream and a nationwide network almost 30 years ago.

As the years slowly passed and people began to recognize the value of mobile data, more and more trucking managers jumped on board to wirelessly track their vehicles, and more and more police officers signed on to run license-plate checks from their squad cars. Things were slowly chugging along-until the Internet happened.

Almost overnight, the mobile data industry shed its stodgy, corporate image and became-to investors-the future of the Internet. As Wall Street witnessed the dot-com explosion, many entrepreneurs and investors quickly turned to wireless data in hopes it would be propelled along by the force of the blast. Soon, they thought, the millions of surfers on the wired Internet would supplement their desktops with handhelds and get their Web fix from cars, sidewalks and coffee shops-all thanks to the magic of wireless.

It was no longer mobile data; it was the wireless Internet.

But history kept marching on, and the dot-com fallout managed to greatly dim the once-bright future of wireless data.

“Anybody writing a wireless business plan just pointed to what was going on in the wired Internet and said, `That’s going to happen-wirelessly,’ ” said Andrew Seybold of the Andrew Seybold Group. “And then, of course, with the collapse of the wired Internet, everybody’s questioning, `Is that going to happen wirelessly or not?’ “

That’s the question on everyone’s lips today. And some of the wireless data industry’s most prominent voices remain undaunted. Don’t worry, they say, it’s still coming.

“There is extreme value in being able to access information when and where you need it,” said Mark Desautels, vice president of wireless Internet development for the Cellular Telecommunications & Internet Association. “These (2.5 and third-generation) networks that will be available over the next 12 to 18 months are just simply going to bring home how valuable using wireless to send and receive data can truly be.”

“I think what we’ve proven is it’s not about taking the Internet as we know it on a desktop and making it wireless, it’s about taking information that we need from a desktop and getting access wirelessly,” Seybold said.

The value is there, they say, and has been since the early 1970s.

Simple beginnings

Almost 30 years ago, Motorola Inc. teamed with IBM Corp. to build a network that would allow IBM’s service technicians to stay in touch while they were repairing copiers and mainframes. It became a network called Ardis and it definitely was not as flashy as the wireless Internet. That network, however, had all the basic attributes of today’s wireless data networks-and it’s still a feasible, competitive network today.

“The first nationwide wireless data network was a network that’s still in existence today and it’s run by Motient (Corp.),” Seybold said. “That became Ardis, which became Motient, which is still a viable network today.”

In fact, Motient’s Ardis network is one of only two networks that support Research In Motion Ltd.’s popular BlackBerry devices. Jim Balsillie, RIM’s chairman and co-chief executive officer, said the Motient and Cingular Interactive networks are the only ones that can offer fast, always-on access-the only ones good enough for RIM.

But before becoming the network behind BlackBerrys, Motient’s network moved through a variety of hands. First, IBM sold its share of the network to Motorola. Motorola hung on to the business until early in 1998, when it sold Ardis for $100 million to American Mobile Satellite Corp. As business conditions changed, AMSC decided to give itself a new identity, one that would instill ideas of motion, intelligence and information-Motient.

The IBM/Motorola/Ardis/ AMSC/Motient network wasn’t alone, however. A joint venture between BellSouth and RAM produced RAM Mobile Data and its Mobitex network, which is now under Cingular Interactive’s direction.

“Those are really the two precursors of real wireless data,” Seybold said.

However, when those networks were in their infancy, few understood their future or potential.

Back in that day, Seybold worked for Motorola installing wireless data terminals in police cars for the Los Angles Police Department. Police departments and other public-safety agencies were among the first to realize the benefits behind wireless data, and are still a major buyer in the wireless data marketplace.

“A lot of public-safety agencies were putting in mobile digital terminals,” Seybold said. “The whole rationale for putting this in (for the LAPD) was to take some of the load off of the two-way dispatch frequencies and use it for things like license-plate checks and things like that, and so none of us had a vision beyond that.”

But others did, and that vision spurred the buildout of two nationwide wireless data networks. Few came to appreciate those networks, however, until the buildout of CDPD networks.

Originally invented by an IBM technician, Cellular Digital Packet Data networks were billed as a faster and more efficient data technology than Ardis and Mobitex. McCaw Cellular, and later AT&T, along with Bell Atlantic and GTE, worked to build out nationwide CDPD networks.

CDPD “got people comfortable with wireless data, it got people used to it,” Seybold said. “I think when Bell Atlantic and GTE and AT&T finally got CDPD up and running, they put enough marketing resources behind it to get people interested.”

Seybold said the companies behind CDPD networks, as well as those behind the Ardis and Mobitex networks, first worked to sell wireless data services like wireless e-mail as a horizontal application. However, e-mail hadn’t yet caught on because the Internet was still in its infancy, and this forced mobile data carriers to switch to vertical applications, such as sales-force automation.

“In those days, Motient was losing money, RAM was losing money, Bell Atlantic was losing money-everybody was losing money on wireless data,” Seybold said. “But they all had a belief that it would take off and it would work. So to me the most important thing that happened to wireless data is wired data-is the Internet.”

Designs on dot-com

The meteoric rise of the wired Internet astounded Wall Street and the rest of the country, and the medium quickly became a critical part of many daily lives. E-mail especially worked its way into almost every facet of business and social existence, and checking e-mail became an important pastime.

The fantastic increase in the importance of e-mail was perhaps the single most important event for the wireless data industry. No longer would it be trapped in specific vertical markets-it now had a horizontal market, in the form of e-mail, that covered virtually every person in the country and the world.

“If e-mail has become mission critical to your life, then you want it not only sitting at your desk but everywhere you are,” Seybold said.

Now, the wireless data industry had a trump card. And it also had a new business partner: The Internet community.

“My job was to figure out a way to bring those people together,” CTIA’s Desautels said.

Desautels, who hails from the Congressional Budget Office on Capital Hill, joined up with the Wireless Data Forum (which started at the CDPD Forum and is now part of CTIA) to make sure the Internet industry had a chance to shake hands with the wireless data industry.

“The point of the forum was to begin to educate the IT community and the Internet community … on the range and capabilities of wireless data products, because it was felt at that time that neither IT managers in enterprises nor Internet companies of all sizes-but particularly the giants-had any real knowledge of what you could already do wirelessly,” Desau
tels said. “The forum’s job was to try to educate those folks.”

And, of course, it wasn’t easy. Neith
er group really realized they needed the other. The idea of a wireless Internet was still on the horizon.

“The Internet community at that time had very little interest in wireless networks,” Desautels said. “There was no bandwidth there, the speeds were ridiculously slow-there was no reason for them to want to be involved in extending their application or their content or their service wirelessly. They were more interested in what they were able to do with broadband than they were with wireless.

“No one wanted to scale down what they could do on their Internet sites,” he said.

However, that quickly changed when the Internet community caught a glimpse of the long arm of the wireless industry.

“And, lo’ and behold, they realized that there were more people with mobile phones than there were with Internet access, and thus began to rethink the strategy of not providing their content in a scaled-back manner,” Desautels said. “And today I don’t think there’s an Internet company, going from large ones like AOL, who haven’t started to implement wireless strategy in a big way.”

This sea change, Desautels said, came during a 1999 conference in Monterey, Calif., which included both wireless and Internet presenters.

“There began a sea change in the approach of both the wireless community and the Internet community-the wireless community coming to the conclusion that they needed the content the Internet community had, and the Internet community coming to the conclusion that if they weren’t willing to provide their applications and their content to enable it to be distributed to mobile devices that there were other little companies … who were ready to step into the breach and feed these mobile devices,” he said.

Desautels remembers a general open meeting where representatives from Yahoo!, CNN, MSN and others sat across from CTIA President Thomas Wheeler and others from the wireless community, and the two groups disagreed over even the most basic aspects of doing business together. The Internet community expected wireless companies to pay for Internet content, while wireless companies believed Internet content providers should pay to have their content offered wirelessly.

“I think that discussion was important in that it was the first industrywide discussion as to how the business models in this new kind of world were going to work and how different the ideas between the wireless community and the Internet community were, basically because they hadn’t spent any time talking to each other,” Desautels said. “It was instrumental for both communities.”

Of course, at that time, the Internet industry didn’t know what was in store for them.

And now, today, the dot-com crash has forced a change in the business plans of many wireless data companies, and the focus is back on the enterprise instead of the consumer. The focus is slowly moving away from the wireless Internet and toward mobile data. In addition, the nationwide economic situation has forced the industry to tighten its belt through lowered sales projections and job cuts.

But many in the industry argue that the history of wireless data is still in its infancy-it’s a nascent industry, they say-and things will definitely change once the economy recovers and faster networks are up and running.

What they say, in essence, is that you ain’t seen nothin’ yet.

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