Some Industries Receptive to Managed 802.11 Services

Small businesses in specific industries have a strong demand for managed WLAN services, as a recent survey shows.

by Chris Luzine [June 10, 2003]
Chris Luzine is product manager for Bridgewater Systems, a provider of dynamic IP and data service fulfillment and assurance solutions for service providers. Prior to Bridgewater Systems, he served at Northern Telecom.

In considering wireless LAN market opportunities, service providers would do well to review a recent research report on managed 802.11 services for small and medium size enterprises (SMEs). The report was undertaken by TeleChoice and commissioned by Bridgewater Systems. It identifies three industries with interest in deploying wireless LANs—healthcare, financial and manufacturing. In each of these segments (particularly healthcare and manufacturing), mobility within the organization's facilities is an essential part of job performance, which makes them strong candidates for being "early adopters."

Such organizations may also be receptive to managed 802.11 services, according to the report, because WLAN deployments can be quite complex. SME IT departments may simply not have the time or expertise to deal with issues such as proper antenna placement, channel selection and security. This creates an opportunity for carriers to bundle WLAN managed services with their existing connectivity services, particularly since many carriers already have customer premises equipment (CPE) in place.

As may be expected, within each of the three vertical industry groups surveyed there were some divergent opinions and trends observed.

Healthcare SMEs
While healthcare SMEs surveyed tended to be least likely of any group to have (or know of) managed services, they were the most likely to already have a wireless LAN in place (by a small margin)—perhaps because of the mobile nature of workers within many healthcare facilities. For example, healthcare providers must move from room to room, or across a campus environment in the course of their duties. Network security appeared to be one primary motivating factor for healthcare SMEs—combined with a perceived lack of internal expertise. This may provide an opportunity for service providers to provide integrated LAN/WLAN and VPN security services. Because of this group's relatively low awareness of managed services, however, a service provider may find it worthwhile to conduct some market education and awareness activities before launching a service. Given the concern for security but interest in the mobility of a wireless solution, a managed service that can solve those joint issues may fare quite well in this segment.

Finance SMEs
Of the three groups surveyed, finance SMEs were the least likely to have or plan wireless LANs, or to show interest in a managed WLAN service. This group, however, still showed a significant propensity towards wireless LANs—a total of 72 percent of surveyed finance customers either have or plan a wireless LAN deployment. And these customers tended to be among the most likely to adopt managed services in general. So while finance SMEs may not be a good initial primary market, they did show enough interest in managed WLANs and wireless LANs in general to be a good secondary target—particularly with service packages that reflect the security concerns and regulatory requirements of these companies.

Manufacturing SMEs
Like finance SMEs, manufacturers were more highly aware of and were using managed telecommunications services. In fact, their results in these categories were identical to those of financial SMEs. And like finance SMEs, 75 percent of surveyed manufacturers without any managed services today stated that they were "likely" to adopt such services in the future.

This segment was the most likely—at 55 percent—of all groups to be interested in a managed WLAN service. Given their high propensity towards managed services in general, and the likelihood of adopting a managed WLAN, manufacturers appear to be a significant first market for such a service. Service providers may, however, need to spend some time educating segments of this market regarding the benefits of wireless LAN in the manufacturing environment, in order to gain traction with those companies that don't see the need for a wireless LAN.

Services that will sell
Any interest shown by survey respondents in managed WLAN services will remain unfulfilled without a corresponding service that meets the actual requirements of these potential users. Survey results point towards several features and characteristics that a service provider should consider when developing a managed WLAN service.

• Consider bundling a managed WLAN service with a broadband access service. Obviously, wireless LANs will typically use broadband access services, but survey respondents indicated a definite preference for obtaining WLAN services from the providers most likely to be providers of broadband services to SMEs (ILECs/RBOCs and ISPs).
  
  
• The integration of wireless LANs with existing (managed or unmanaged) wired LAN functionality is another feature that service providers should consider adding to their managed WLAN service. Survey respondents expressed a strong interest in this aspect of a service; additionally they are likely to already be customers of managed LAN services.
  
  
• Service providers should adopt solutions that can ensure WLAN security and integration into the customer's existing firewall and security systems. More importantly, service providers should focus their marketing and market education efforts around the security benefits of the managed WLAN solution. Of all the WLAN "issues" discussed with survey respondents, security was the issue that surveyed SMEs were most likely to look for help outside of their internal staff.
  
  
• Technical support is another essential element of a managed WLAN service. Nearly half of respondents with current wireless LANs use some external support for their customer-owned LANs. This support is mainly for functions like network integration, security, and general administration.
  
  
• Those SMEs without wireless LANs have not implemented them primarily because of security and performance concerns.
  
  
• With only limited exposure to the concept, 45 percent of SMEs surveyed expressed interest in managed wireless LAN services.

The best opportunity for providers, particularly for ISPs and RBOCs already offering managed access and LAN services, lie for those that can provide managed wireless LAN services that offer customers peace-of-mind regarding wireless LAN security. This remains the biggest single impediment to adoption of the technology among respondents who have not adopted WLAN technologies. Because of this, the managed services market requires robust managed WLAN service offerings.

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