The Expectant, the Hungry, and the Disconnected

The latest numbers, according to recent published reports, are less expansive: approximately 250 million new subscribers worldwide in 2001, to make a total subscriber base of over 925 million. Ericsson's latest predictions, 175 million to 215 million new subscribers in 2002 worldwide (20% annual growth), are a far cry from the billions predicted a few years ago, and these numbers are still considered overly optimistic by some analysts.
Wireless IT consultants are more concerned with the direction of the mobile middleware market — corporate software that enables users to access enterprise applications remotely via wireless networks — than the end-user device market.

Mobile middleware is where they will find wireless engagements. This market, according to Aberdeen Group, will hit $1.5 billion by 2006, up from an estimated $552 million this year. IDC pegs the mobile middleware market at $1.7 billion for 2006. Driving mobile middleware growth, suggests Frost & Sullivan, a NY–based research firm, is wireless CRM, which is expected to grow 36 percent annually to 2008, up from $300 million in the U.S. in 2001.
These numbers and others translate into good news for wireless IT consulting firms. In 2001, according to the latest IDC report, worldwide mobile and wireless professional services spending grew to approximately $3 billion, an increase of 138.3% over the previous year. The research firm expects that the worldwide mobile and wireless professional services market will continue to grow at a compound annual growth rate (CAGR) of 58.5%, to reach just under $30.4 billion in 2006.

Given the murky economic outlook in general, a fickle wireless consumer, immature technology, and wildly inaccurate industry forecasts in the past, the watchwords must be "buyer beware" when it comes to wireless predictions.
"Any predictions made today will underestimate the impact of wireless in the future," declares John Beck, associate partner at Accenture's Institute for Strategic Change in a presentation titled "Future Wireless Trends." He might as well add that they also will just as likely overestimate the impact in the near term.

Still, there is money to be made in wireless IT consulting right now. "In one of the toughest markets anyone has known for technology companies, we are continuing to buck the industry trend. Aspective not only has performed to plan, but has exceeded all expectations for the first six months of 2002," crows Javaid Aziz, CEO of U.K.-based Aspective. Key to the company's financial success is wireless. In its latest quarterly report, the company credits its decision to expand its work in mobile enterprise solutions in 2002–2003 as a major factor in its success. That work focuses on front office sales and customer service personnel and mobile workforce and field service management.
"We truly believe that wireless will be big. It's just that I don't know when," says Ewald Weizenbauer, vice president/general manager, Aspective Mobile Enterprise Solutions (the Aspective division that handles wireless). The company had been dabbling in wireless solutions as early as 1999, but didn't get focused on wireless until October 2001, when Weizenbauer's group was established with its own P&L responsibility. "We are seeing revenues now, and we expect a pickup in the UK and Europe in 2004–2005," he says. Currently the mobile group has 200 people, a $46 million (30 million pounds) per year run rate, and is growing at 30% a year.

The consulting firm is finding that most client spending on wireless today is focused on two market segments: transportation/logistics and workforce management — particularly service workforce management where hundreds or thousands of repair people are out on the streets every day. "Workforce management is a huge opportunity for wireless, based on direct cost savings and greater efficiency," Weizenbauer explains. He expects these two markets to continue to drive the enterprise wireless market into the future.

BearingPoint also is ramping up a wireless practice. Its showcase engagement is American University (AU). "We helped them converge wireless with IT so that they now have voice and data over one infrastructure," explains Joseph Simms, BearingPoint managing director for wireless. The system provides enhanced wireless coverage and capacity throughout the campus (both outdoor and indoor), and will be accessible via cell phones, personal digital assistants (PDAs), and laptop computers throughout key areas of the AU campus in Washington, DC.
After a 60-day trial in the business school, the system is being rolled out to all dormitories and three major buildings. Other buildings will be added during the semester, explains Simms. Eventually, all AU students will have cell phones with voice-mail and a custom cell phone plan. As student use increases, AU will no longer need to provide the current level of telephone service or hardwired phones in its residence halls. To encourage use, rate plan discounts will be provided to AU students and staff as part of the University's corporate plan. To gain access to the network, students simply go to the Web sites of the carriers selected by AU to provide service. Each student will be responsible for his/her own cell phone bills.
The key to wireless success, notes Simms, is not the technology, which is pretty straightforward and can be turned over to specialist partners, but the methodology and the process. "We started with a business model that looked at the hard ROI," he says.

BearingPoint now is using the AU experience as a model for other clients in a campus situation and is finding considerable corporate interest. "This is what enterprises want — something that makes people more productive and saves money by leveraging technology," says Simms. The cost of the converged wireless voice and data network at AU is a little more than half that of separate conventional voice and data networks.
But the biggest value, Simms suggests, may come from the new services the converged wireless data and voice infrastructure enable. AU hopes that its faculty and students will uncover opportunities for innovation in teaching and learning when everyone inside and outside of the classroom has ubiquitous, real-time access to information. Simms sees similar opportunities for increased productivity and innovation in the corporate world.
PwC Consulting formally established its wireless practice, M-Business, two years before its recent merger with IBM Global Services. Initially, PwC focused on mobile commerce, but "we didn't think mobile consumer commerce was ready to take off except among business travelers," says Roy Dube, M-Business practice partner, PwC Consulting. Instead, much of its recent work involves enabling CRM and ERP systems for wireless. "Companies want to look at business processes that can benefit from mobile's three As — anyplace, anywhere, anytime," he continues.

Today's wireless initiatives, however, represent incremental extensions of the kinds of things IT consulting firms have long done in the enterprise. The revolutionary power of wireless has only been hinted at. Bluetooth (device-to-device wireless communication), wi-fi (high-frequency wireless LAN), 3G (third-generation wireless), location tracking, and more promise to radically change the way people and devices communicate and how organizations conduct business.

For example, smart wireless phones incorporating 2.5G and 3G technology will change the shopping experience. Using a mini camera built into the wireless phone, a teenager could capture an image of a sweater in the store and immediately send it to a friend elsewhere. Today, through location tracking, wireless users can get a list of restaurants or gas stations nearest to where they are at any given moment. "This will change e-commerce," declares Jerry Kaufman, president, Alexander Resources, a Dallas-based research firm.
Wireless, then, is as much about lifestyle as it is about business. "Expect stunning growth in wireless data use and a transformational change in the way people use wireless devices, driven by applications that haven't been invented yet," advised Accenture's Beck. If correct, that means a lot of potential opportunity for consulting firms.