802.11b, otherwise known as WiFi, is growing into one of the most buoyant fountains of money in the wireless industry, challenging big and small vendors to seek differentiating models in a tightening economic landscape.
According to industry sources, the technology, which is thriving on the emerging zeal for anywhere and anytime communications, generated about $800 million in 1999 when it became a standard and is expected to rake in as much as $3 billion in a couple of years.
Major vendors like Microsoft Corp., IBM Corp. and Cisco Systems Inc. are driving the technology as one of their top-flight business arms for generating revenue.
“It is certainly one of our more important businesses,” said Kittur Nagesh, product line manager for wireless LAN initiatives.
“Microsoft has done some tremendous work in building features in XP that make the IEEE 802.1x wireless world come alive,” remarked Jawad Khaki, vice president of Windows networking and communications at Microsoft.
Apart from the big players, small vendors are also pitching in. One of them is BreezeCom, with a differentiating outdoor access technology called DS11 outdoor bridge, which supports point-to-point and point-to-multipoint applications.
Since it became a standard, it has flourished in such places as university campuses, retail outlets, health care institutions, shopping malls, airports and hotels and in certain cities like San Francisco.
`It also has spurred the growth of a wide variety of devices like laptops, PDAs, scanners, cell phones and other handhelds,” said Nagesh. “I believe it is responsible for 20 percent of the sales of laptops alone.” He added, “the Apple-Macintosh laptops have also blossomed.”
Dell and Toshiba have built 802.11 into their newest laptops, according Martin B. Dunsby, global wireless initiative leader of Deloitte Consulting, adding that Toshiba is planning to incorporate its Bluetooth offering with the 802.11b standard.
The standard has been principally an enterprise phenomenon, but the industry already is planning to target the residential space.
“It is becoming more of a corporate standard,” said Dunsby. “They are recognizing that this is something that has broad value.”
Nagesh said that the enterprise has latched onto it because of its “new genre of applications and not just scanning or check in and check out.” He referred to such issues as management, security, interoperability and high performance as factors that helped jumpstart the technology.
He said further that “enterprise was used to the Ethernet performance switch and would not look at low data until 802.11b became a standard about two years ago,” he commented. “In the last two years, it has brought significant growth.”
Dunsby says 802.11b has been getting a lot of positive and negative attention. The standard’s good news comes from the fact that it is easy to deploy in both public and private networks. The bad news stems from security issues, Dunsby noted. “Some people have been able to compromise certain aspects of the security of wireless LANs.”
He said its cost-effectiveness is one of the reasons it attracts business investments. In an office building, he explained, “you need one access point for every 300 feet. Cost-wise, an access point is about $1,000. On the client side, you need a PC cord of about $150.”
This contrasts a wired network, which costs $200 for a cable installation.
“The initial setup cost is about the same and slightly higher for wireless,” he remarked. “But the ongoing operation cost is significantly lower.”
He said the standard also has higher data bandwidth than 3G as it is available, although the coverage area of its antenna is smaller. He said in certain high-density places such as airports, it makes sense to use 802.11b rather than 3G.
“It’s also a clever strategy because they do not need to buy bandwidth in the Industrial, Scientific and Medical band,” he said. “And operators do not have to buy spectrum.”
The standard operates on the 2.4 GHz unlicensed band with 11 megabits per second. Dunsby said the target services are for particular areas unlike 3G whose licenses require them to cover wide areas.
At last week’s 3G CDMA World Congress in Hong Kong, L.M. Ericsson demonstrated live shows to prove that 3G and 802.11 could coexist. The demo shows a portable PC switching from 3G CDMA network connection to 802.11b.
The main hiccup to the standard is security. “We don’t rely on the security of 802.11 standard by itself,” noted Dunsby.
He said most companies use a secure sockets layer and virtual private networks to provide security.
Ron Sperano, IBM’s program director of mobile marketing development, says vendors tend to differentiate themselves through security. He said IBM uses Wired Equipment Privacy for 40-bit encryption, password protection, media access control filtering. He said it also has 128-bit encryption. BreezeCom says it has the same type of security technology.
Sperano says his company also differentiates itself with its liquid crystal display, which is enhanced with an embedded antenna on the edges of the device for good reception.
Dunsby says 802.11b’s competing technologies are Metricom’s Ricochet and CDPD, both of which already are deployed in several major cities. Unlike 802.11b, both technologies are public networks and cannot be deployed in offices. They can, however, be deployed in hotels and airports.
He said 802.11 may not have the coverage of both standards, although they operate at lower speeds.
“It’s all about trade-off,” he said.
Dunsby said various vendors are developing devices to support multi-networks, noting that devices that typically work on digital networks can now work on analog networks with basic connectivity. He said that those on WiFi with high speed can “roam” to GPRS with higher cost.
Some companies have entered alliances and combinations to roll out their WiFi offerings. IBM has partnered with MobilStar to offer remote WLAN services in public places like airports and hotels. It has allied with Wayport to produce solutions allowing customers to have high-speed access when they travel. And it has developed access points based on Lucent Technologies Inc.’s architecture. Cisco acquired Aironet a year ago for its in-door in-building and outdoor WLAN products.
