March 14, 2007

$2.50 is a lot to pay for a cup of coffee, but it’s certainly a bargain if your java is served with a day’s worth of free wireless Internet access. A testament to the proliferation of free Wi-Fi hotspots at hotels, airports, and, perhaps most noticeably, coffee shops, is that preventing customers from lingering beyond their lattes—and thus monopolizing tables that could be seating paying customers—has actually become something of a concern for many business owners. Some enterprising customers have even been known to run their businesses from cafes offering free Wi-Fi, using the local java joint as a ready-made home office. In any event, a diverse array of outlets—from festive Buffalo Wild Wings Bar and Grill to serene Whole Foods—have begun offering free wireless Internet access as a boon to customers.

While demand for wireless data networks has been bolstered by the recent increase in Wi-Fi hotspots offered as a means of attracting customers to commercial spaces, the Wireless Local Area Network (WLAN) has yet to explode to the same extent in the enterprise environment itself. Corporations have been reluctant to embrace Wi-Fi as a within-the-workplace data and voice networking technology, largely due to network security concerns. 802.11, the IEEE standard for Wi-Fi, was particularly susceptible to security breaches. Recent advances in encryption and software protection techniques—such as Virtual Private Networks (VPNs) and IP Security Protocol (IPSec)—have largely allayed such concerns, however. Widespread enterprise adoption of Wi-Fi in the workplace was also held back by the complexity of integrating data networking, security, and other applications such as VoIP. WLAN equipment vendors and VARs have had more success of late getting these elements to work together, ushering in a wave of corporate adoption of Wi-Fi in the workplace. Indeed, a recent TIA Report estimates that 60% of corporations now make use of WLANs to some extent.

A wireless data and voice network environment in the workplace has a variety of notable advantages. Substantially reduced IT costs are perhaps most important. The equipment required (e.g. wireless cards) for implementing a wireless office environment tends to be less costly than the extensive cabling and hardware required in traditional wired office settings, not to mention less expensive to maintain. Japanese firm Osaka Gas Co. recently transitioned to an entirely wireless network and realized 30% cost reductions. An important component of these savings was a least cost routing function in the company’s Session Initiation Protocol (SIP) servers. This converts cell phone numbers into extensions off of the WLAN when they are used within Osaka Gas offices, greatly reducing cellular charges. Moreover, the smaller size of wireless equipment and the lesser amount of cable required reduces the amount of office space needed, lowering real estate costs. Workplace flexibility is also enhanced with wireless LAN solutions. Workstations can be reconfigured more easily without having to add new wiring, and entire offices can be moved without having to abandon immovable infrastructure investments. A less tangible but potentially significant benefit of the Wi-Fi office is the productivity increases for which it allows. In the "always connected" wireless setting, workers away from their offices can still access corporate servers and the Internet, and the ease of connecting wirelessly—as opposed to having to disconnect and reconnect cables—increases the likelihood that employees will actually use their PDAs and laptops.

But what types of companies are seizing the opportunities presented by the WLAN as an intra-office voice and data networking technology? Generally speaking, larger firms—although they stand to save much more from using Wi-Fi—will be reluctant to adopt the technology until they have seen return on investment from their existing wired networks, especially if funds have recently been expended on advanced wired networking. Smaller firms may have more flexibility in transitioning to a WLAN, as well as new companies lacking existing network investments. But more important than the size of the organization is the sector in which it operates. In sectors where portable data access (e.g. law and education) and voice access (e.g. retail and healthcare) are important, expect to see increases in WLAN adoption.

NPRG will continue to follow developments in the wireless office in forthcoming installments of Communications Technology Advisor.