Yankee Group says downturn stalls wireless plans

Wireless data services have been around for several years, but the economic downturn last year prompted many companies to put their plans on hold, according to a recent survey conducted by an IT market research firm.

“”It’s clear that the economic downturn severely impacted wireless initiatives

as priorities shifted within corporations, but wireless data is clearly on the radar screen,”” said Eugene Signorini, senior analyst for wireless/mobile enterprise and commerce with the Yankee Group, based in Stamford, Conn.

Last year, 12 per cent of companies surveyed by The Yankee Group said they were already using wireless networks and 14 per cent said they planned to deploy them within 12 months. But this year, only eight per cent of respondents said they were using the technology.

Signorini said during a conference call Thursday he wasn’t sure why the percentage dropped, but speculated that some firms may have abandoned pilot projects.

He noted some criticize research firms for their “”hockey stick”” predictions – referring to the shape of a line graph which predicts a dramatic increase over time – but he suggested the predications were based on corporations being too bullish. He added that fewer firms — which The Yankee Group chooses at random — were surveyed in 2001.

In its 2002 Corporate Wireless Survey, The Yankee Group polled executives at 212 American firms with more than 500 employees. Only firms who said more than 10 per cent of their workers were mobile (meaning they spend more than 20 per cent of their time off-site) were included in the survey.

Although the percentage of respondents who said they were using wireless networks to transfer data dropped between 2001 and 2002, Signorini noted most respondents said they plan to adopt the technology eventually. This year, nearly two-thirds (62 per cent) of respondents said they plan to deploy the technology within two years, while only 12 per cent said they have no rollout plans.

The types of technologies that companies were using or planning to use varied, from Internet access using notebooks with wireless modems to Bluetooth to wireless local-area networks (LANs). Signorini said respondents showed a “”heavy interest”” in wireless LANs. Although 31 per cent of respondents said they operate wireless LANs, The Yankee Group estimates only 10 to 15 per cent of large organizations actually use the technology. Signorini said some IT managers may be counting “”rogue”” networks (those that are set up by users themselves and not IT departments).

Other companies use – or plan to use – a variety of devices, such as notebooks with wireless modems, personal digital assistants, wireless-enabled cell phones and “”two-way messengers”” such as Research in Motion’s BlackBerry devices.

Notebooks with wireless modems were the most popular type of device. Thirteen per cent of users said they use the hardware now, while 35 per cent predicted they would use them within three years.

When asked what applications are driving the demand for wireless data services, 82 per cent of respondents said “”specific corporate data/applications.”” This category would include applications that are customized for a particular company.

“”Companies have dedicated extensive financial and human resources to these applications, so it makes sense to get the information from these databases and from these applications to individuals where and when it’s needed,”” Signorini said.

Seventy-nine per cent of respondents said e-mail drives demand, while 60 per cent said workforce or sales force automation. The totals add up to more than 100 because respondents were able to give more than one answer.

“”We continue to hear in meetings with vendors that e-mail is the killer application and obviously the widespread use of e-mail in the corporate environment would lead you to believe, but specific corporate applications and access to corporate databases are most important, at least according to our respondents,”” Signorini said.

When asked what the barriers to adoption were, the top responses were security, data transfer speed and geographic coverage of wireless networks.

“”I think vendors are sensing that security is a major issue,”” he said.””They have come up with significant advances in security.””

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