Wi-Fi 'Hotspots' Spread, Drawing Mobile Workers

By Cynthia Flash

February 12, 2003

More than a year after the service was introduced, companies with mobile workers are finally starting to embrace the Wi-Fi technology that's available in some coffee shops, book stores and other public places.

More than a year after the service was introduced, companies with mobile workers are finally starting to embrace the Wi-Fi technology that's available in some coffee shops, book stores and other public places.

Employees equipped with Wi-Fi-enabled laptop computers or personal digital assistants are using these Wi-Fi "hotspots" as virtual offices, stopping in to check e-mail, download documents, or communicate with co-workers. Sometimes they even take clients with them, knowing they can wirelessly connect while becoming wired on coffee.

"People in my field may leave the office with incomplete information and it's a bummer to stop back to the office to pick up tidbits of information," said Edward Krigsman, a top salesman with John L. Scott real estate in Seattle who uses the wireless network about once a day. "We just keep moving in our field and are not tethered to an office. Information is always aging in real estate and we need to keep current."

T-Mobile USA, Starbucks and Hewlett-Packard took the industry lead last year when they partnered to install Wi-Fi networks in 2,000 Starbucks stores. T-Mobile, a Bellevue, Wash.-based subsidiary of Deutsche Telekom AG, took over for MobileStar in November 2001. The Richardson, Texas, company went bankrupt after spending too much money to build networks in Starbucks stores and airports without attracting enough customers.

Beyond Starbucks

T-Mobile is now expanding the service into airports via alliances with American, Delta and United airlines. It plans to install networks in Borders Books and Music stores and cafes this year too.

Sprint PCS and Cometa Networks, backed by Intel, IBM and AT&T, plan to build nationwide Wi-Fi networks as well.

Starbucks, which is also running a trial in stores in London and Berlin, says the number of customers is growing steadily.

"It's been very successful," said Anne Sanders, vice president of Starbucks interactive, new ventures. She won't disclose specific customer numbers, but said "the utilization of the network is exceeding our expectations. The number of users and time on increases month to month."

To show its support for the service, Starbucks in January equipped 600 district managers with new Wi-Fi-enabled laptop computers so they could use the service in their stores and spend more time with their employees and customers.

Lisa Jansen, a district manager for Starbucks stores in Hillsboro, Ore., said having a Wi-Fi connection on her computer has changed the way she works. Instead of using a slow dial-up connection at her home to check e-mail or driving to the office, she goes directly to the stores she oversees.

"I can pull up recent sales, e-mail, pick up information from the intranet and I don't have to drive back to the district office. I spend more time in the store than the office," she said.

While Starbucks pays for its district managers' network connections, other companies that support the service still rely on employees to pay for it themselves.

John L. Scott chairman and CEO J. Lennox Scott praised the service when his agents started using it last August. But agent Krigsman still pays the monthly fees out of his own pocket.

The same is true for employees of BearingPoint, Inc. (formerly KPMG Consulting, Inc.), who piloted the program last year. Michael Surface, managing director for retail/wholesale, still uses his Wi-Fi connection to download information while on the road. But the company hasn't endorsed the technology by paying for Surface's access.

Nevertheless, the workers said they like it better than the alternative offered by most wireless carriers. Also called 802.11b and wireless local area network (WLAN), Wi-Fi technology competes with technology offered by wireless carriers who are upgrading their wireless voice networks to transfer data at speeds comparable to a dial-up modem.

Using unlicensed airwaves, Wi-Fi equipment costs less and users can connect at speeds up to 50 times faster than a dial-up modem.

Mobile workers say they like that because slow speeds don't limit the amount of data they can access.

Grassroots Phenomenon

Warren Wilson, practice director with market research firm Summit Strategies in Seattle, said he sees the Wi-Fi market taking off in 2003. That's in part because companies are installing wireless networks in their own offices and some are buying laptops that come equipped with Wi-Fi cards (Dell in January announced Wi-Fi will be standard equipment on two notebook computers now available in the U.S.).

"I think it will be a huge phenomenon," he said. "It is a grassroots phenomenon brought about by the widespread standard of 802.11 and the fact that it is all becoming so cheap. In terms of what corporations are doing, it's a mix of buying the requisite card for the employees, or agreeing to reimburse employees for the card because they recognize the productivity gains."

He predicts Wi-Fi technology will become increasingly available in office buildings, libraries, convention centers and hotels, continuing to fuel the adoption.

"I think 2003 is the year it becomes mainstream, at least within the business world," he said.

To standardize service, the Wi-Fi Alliance in January launched a program to create a global brand to make it easier to recognize public assess spots. Locations that qualify through an application process will be allowed to label themselves a "Wi-Fi ZONE" and to display a "ZONE" label.

Now public Wi-Fi networks are available only in the top 20 metropolitan areas of the country -- and in some limited locations abroad. As the networks spread, finding a Wi-Fi location will become even easier.

With growing use, however, comes growing problems. Mobile workers must still take precautions to make sure their own connections are secure by using virtual private networks and firewalls.

"Security is a big issue," Wilson said. "Much of the security problems with wireless LAN have been due to misadministration."

Starbucks and T-Mobile provide security information on their Web sites. But Starbucks has not yet included such information in its stores -- something Sanders said may be coming. Now, it's still up to customers to protect themselves.

"We're coffee experts. We host the service in a hospitality setting. Our baristas won't configure a laptop," she said.

Freelance writer Cynthia Flash covers technology and business from Bellevue, Wash. She can be reached at cynthia@flashmediaservices.com.

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