SAN FRANCISCO — System integrators and VARs exploring Bluetooth opportunities are now on the clock.

According to Paul Ostergaard, CEO of Norwood Systems, corporate environments will be looking to build wireless offices because of Bluetooth up until the end of 2003. Bluetooth, he said is less expensive that its main rival, 802.11, even though Bluetooth requires more access points than 802.11.

“Today’s wireless is complicated because of the multiple cells. That will not be the case two years from now, as (Bluetooth) will make it easier over time. The integrator’s share of the pie will start to decline, but with new users it can also increase because the size of the pie will mushroom,” said Ostergaard, who was speaking at the Bluetooth Developers’ Conference in San Francisco.

Norwood is a startup that formed last year through a number of mobile phone carriers with financing from the U.S. and Europe. Its product, EnterpriseMobility, is an office network that runs on Bluetooth and has been in beta tests with companies like Ernst & Young for much of this year. In fact, Ostergaard said the Bluetooth opportunity for resellers started from purchasing patterns among corporate users.

“End users started buying more Palm devices and that forced corporate IT managers to rethink their portable device (strategy) and how it can improve response times for the company,” Ostergaard said.

Nokia released a market study recently in which 20 per cent of the 800 respondents said Bluetooth was still too expensive to install and operate.

Wireless costs are 75 per cent more expensive than the costs of desk phones. Bluetooth is driving that cost down and that is why system integrators and VARs need to strike while the iron is hot, Ostergaard said.

“It will get less expensive, but hardware (today) is still expensive with coaxial cables and the like. And, Bluetooth still requires a lot of expertise,” Ostergaard said.

Management software is one area where a lot of integrators may be able to add value to Bluetooth solutions, but Ostergaard said that solutions of any kind must demonstrate a good return on investment to customers on a turnkey basis in the near term.

Other issues include figuring out how to link all the devices together: security, management of several base stations, and personal privacy.

“Integrators between 2001 and 2003 will be implementing (these types of solutions) at a high rate,” he said.

Ostergaard envisions a day soon where Bluetooth-enabled mobile headsets that can dial on-screen or use voice recognition to make contact will take over the corporate office environment.

There are several cost-effective reasons why this can happen, he said. First, there is lots of airtime available for corporations because there are three times more fixed business lines than mobile business lines.

Voice mail and callbacks add to a company’s telecom bill needlessly. “Having a cordless headset that an individual can carry away from his desk avoids voice mails,” he said.

However, Bluetooth still needs the “killer app”, Ostergaard added.

Bluetooth has roaming problems because it is a single-cell technology and corporations have to find a way to manage that environment. Handoffs are also a key to Bluetooth success. Handoffs need to be about 150 milliseconds apart.

“Bluetooth needs modification to help move from voice to data (or cell to PDA).”

The Bluetooth Developers’ Conference runs until Thursday.

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