Wired beyond sound

Handheld devices have copped a lot of criticism over the last few years from critics that maintain they are really little more than cute gadgets unlikely to win the affections of hard-nosed IT managers before crucial barriers to their uptake are resolved. But developments in wireless data technologies are about to open up the value of a vibrant developer community and expose resellers to a rich new market for remote business connectivity.

You can't go many places today without spotting someone stabbing a stylus into a black wallet or tapping a shrunken keyboard. But while handhelds may be the hip thing for individuals, they have so far failed to impress corporations as offering potentially real tools for business.

Unlike many technologies that have hit the wall at the boardroom level over the years, personal digital assistants such as the popular Palm Pilot and Psion handhelds have had huge support from software developers. Palm, for instance, has the backing of one of the largest and most vibrant developer communities in the industry. The Psion platform is supported by the Symbian developer alliance, which boasts members such as Nokia, Ericsson, Motorola and Panasonic.

So why are enterprises so slow to get involved? The true value of PDAs to business lies in their ability to deliver sophisticated data applications over wireless networks. The carriers spend bucket-loads of money telling users they have arrived but the reality is that proper packet switched wireless networking is still "in the pipeline".

"There is a whole swag of early stage adoption hurdles," said Geoff Johnson, research director for networking and telecommunications with the Gartner Group.

The biggest of these is that existing wireless networks are presently unable to transmit data at reasonable speeds.

Nearly a quarter of a billion people throughout the world use GSM, now the accepted standard for mobile telephony in most countries except the US. For the last two years, GSM phone users have been able to conduct basic wireless data tasks such as short message service (SMS), a feature which has become enormously popular, especially within youth markets.

Its successor, wireless application protocol (WAP), has been far less successful, largely because users, as yet, are unable to do anything very impressive with the technology beyond getting weather reports, news and astrology.

GSM is still only a circuit switched technology, limited until the full deployment of the emerging packet switched technology, general packer radio service (GPRS).

The implications for resellers are that wireless handheld devices will continue to lag behind PCs in terms of functionality impeding their entry into the mainstream corporate world.

As Johnson points out, resellers must be able to deliver customers the three "Us": ubiquity, utility and usefulness.

The value of handheld devices to organisations, he believes, lies in their ability to quickly replicate crucial corporate data in the field or in other remote locations as well as meet the increased demand for access to rich HTML content on the Internet.

But users must have "true, always on connectivity". With promise of GPRS and emerging technologies such as enhanced data for GSM (EDGE) carriers say that the promised land is close and they are now predicting there will be more people connected to the Net via handheld devices than PCs within the next two to three years.

While many resellers have done very well from selling the devices to individuals, the real money is going to come from the sale of solutions to businesses. This will require, among other things that dealers look more closely at how to go about offering access services, as occurred during the brief life of the "free", or subsidised PC.

"One of the key tests for the reseller community will be their ability to strike partnerships with local and global developers and network operators," Johnson said.

Stephen McDonnell, systems development engineer of Palm sales Australia, said the corporate penetration of the company's handheld products will very much depend on the resourcefulness and creativity of its channel partners.

"The partners that are going to push into the enterprise and corporate markets are the ones that have good in-house skills such as applications development," he said.

Devices like the Palm are, he added, quite easy to write applications for. Palm already has several hundred thousand registered developers and is growing at the rate of about 1500 every week.

Further supporting the proliferation of real business applications for wireless is the fact that most of the so-called "big iron" software vendors such as Oracle, IBM, Siebel, SAP and Sybase all have their own wireless stories now and are attempting to market slimmed-down versions of their enterprise applications.

"Increasingly I think that mobile data will be the fastest-growing segment now that handhelds can take all the information in the virtual world and bring it into the real world by literally sticking it in your pocket," McDonnell said. "It is definitely an opportunity for sophisticated channel partners."

Felix Wong, managing director of Advanced Portable Technologies, believes most resellers today are just selling a device and are not taking advantage of the real opportunity, which is to provide a solution to get back-end data back out to staff via a handheld device.

APT is a Sydney-based distributor specialising in wireless business solutions. Wong said the big opportunity for resellers lies in the fact that companies have invested massive amounts of money in their back-end applications and collecting corporate data but don't yet have any real way to keep staff connected once they leave the building.

Wong admitted that today's wireless networks pose certain limitations, but said companies will need to make compromises until the wide deployment of GPRS "when opportunities for those companies in the wireless space will be huge.

" ‘Make your users more valuable by giving them data in the palm of their hand', that's the message we're trying to get out there to resellers," he said, adding "this is really where resellers are going to earn the good money".

Kris Kowalczyk, business development manager with Sydney wireless applications development company Mobilesoft, admitted that businesses have been slow to adopt mobile data services, but that the only Australian carrier that has a network capable of offering proper two-way packet transmission supporting is Telstra.

Mobilesoft was started in 1993 with venture capital from Telstra, which asked that it build the business case for the introduction of the carrier's mobile data product in Australia. The result was a protocol similar to WAP called advanced data packet transport (ADAPT), essentially a middleware product enabling an application on a remote client to talk over a number of different telecommunications platforms.

"There is a perception that WAP is flailing that will persist," he said, until more carriers are able to deliver proper two-way GPRS.

On the upside though, Kowalczyk believes that handheld products are no longer the nightmare for IT managers they once were, thanks to the development of compact Web browsers enabling companies to simply allocate IP addresses on the network.

"We now have the ability to say to the IT guy ‘don't worry about connecting all these devices anymore'," he said.

The result is that the corporate handheld market is promising to become a high-margin business for resellers, Kowalczyk continued, especially given the huge investments in new messaging, office and database systems driven by Y2K.

"IT guys now have an opportunity to exploit the capabilities of wireless to deliver the value on that investment that boards of directors are requiring," Kowalczyk said.

Mobilesoft is currently in the process of completing a mobile courier dispatch system for a leading taxi company it claims is the first real corporate deployment of a WAP solution in Australia.

David Henderson, category director at distribution giant Tech Pacific, said there is some evidence of companies adopting handhelds but it is the exception rather than the rule.

"As far as handhelds are concerned, the business market is very embryonic, even though there's a lot of development going on," Henderson said.

"The devices we see today will only make up a very small part of the products expected to emerge in the next 12-18 months," he added.

One important technology that has lagged in coming to market is the wireless chip BlueTooth, which is touted as the key to wireless e-commerce. For instance, in Europe, Coca Cola has already moved to furnish some 100,000 soft drink vending machines with BlueTooth technology in anticipation of the technology becoming all pervasive.

But like other technologies yet to materialise in Australia, there are a lack of handsets in the market, although recent handheld products from both Hewlett-Packard and Compaq support the BlueTooth chip.

By the end of next year however, BlueTooth enabled devices are expected to be fairly common, thus facilitating a new level of e-commerce with and between businesses.

Small transactions will naturally constitute the bulk of activity initially, according to Gartner's Johnson, but it is expected that as users seek to conduct larger transactions, dealers will be forced to develop a better understanding of how issues such as security and digital certification relate to handhelds.

Tech Pac's Henderson said that increasing revenue from mobile devices would come from value added online services.

"As the PDA connects to the Net, revenues will come through services applications, not the PDAs themselves," he said.

Stuart Palmer, general manager of mobile data services with Vodafone, agrees. "Where resellers in the IT space have been reluctant to sell network services, there is now an opportunity for them to revisit this area and add another revenue stream," he said.

Vodafone is the exclusive distributor for the popular Psion handheld in Australia/New Zealand. It also sells a number of other handheld products, including the Palm, through its 6000 retail outlets in Australia.

"Getting the channel to embrace convergence and applications like wireless data has been a lot easier, as there seems to be a greater understanding of the technology amongst carriers, making it easier for resellers to get involved," he said.

According to Palmer, 12 months ago 90 per cent of Vodafone's handheld business was derived from individual sales, with only 10 per cent of sales being for five of more units at a time. Now the company reports that between 35 and 40 per cent of sales are derived from sales to corporates.

"Handhelds are beginning to turn the corner," he said. Amy Watson, business development manager with Hewlett-Packard Australia, said she sees evidence of PDAs being used more and more for basic business applications but that there is definitely work to do before companies can easily deploy more sophisticated solutions.

The company's dealers and distributors now realise, she said, that they can really no longer afford to focus just on product specs because users are wanting business applications and solutions.

"With the market growth predicted, it's really going to be in the application space that the channel will need to perform," Watson said, adding that "it will be an education experience for both us and the channel over the next six to 12 months to see who can deliver those sorts of applications".