Execs tout, question Wi-Fi

Vendors might be furiously trying to exploit Wi-Fi wireless LAN technology, but the consensus at this week's Vortex 2003 conference was that few have figured out how to make a real business of it.

Intel CEO Craig Barrett, Verizon Communicatons President Larry Babbio, Jr. and General Motors CTO Tony Scott were among the industry movers pressed on-stage for their thoughts about Wi-Fi (also known as 802.11).Vortex, in its sixth year, is a gathering of high-level network industry executives, investors and entrepreneurs that is run by Network World's IDG Executive Forums division and moderated by Network World's Editorial Director John Gallant.

Several speakers cited Intel's strong backing of Wi-Fi - including heavy marketing behind its Centrino wireless processors and a US$150 million wireless investment fund - as a boon for the fast-spreading technology. And Barrett did nothing at the show to temper Intel's support.

"When people say (Wi-Fi is) hype, I get a little riled," Barrett said, noting that the technology has paid its dues in the grass-roots community and is no overnight sensation. "Hell, Wi-Fi is the only exciting thing in the whole industry."

Intel's plans are to get more devices in the market that run Centrino, and that wireless access will boost demand for broadband services, which would generate sales for more powerful computers and devices with Intel technology inside.

Barrett said the opportunities in Wi-Fi are many, especially for companies that put new wireless data infrastructures in place and figure out technical challenges such as roaming. These companies don't need to gouge customers, such as those vendors charging US$10 for 'Net access at airports, to make money, he said. Wi-Fi could even stimulate demand for lagging 3G services, he said.

The intersection of Wi-Fi and cellular is key for supporting voice and data needs, Barrett said.

"After 25 years of talking about convergence, this is the first time we've seen real evidence of convergence between the computing world and communications world," he said.

Cisco, too, is betting big on Wi-Fi and might have carved out a leadership position in what Infonetics Research Inc. estimates will be a $2 billion WLAN hardware market this year.

"We're investing not just in the enterprise space but in the consumer space" with the recent Linksys Group Inc. acquisition, said Charlie Giancarlo, Cisco Systems Inc.'s senior vice president and general manager of product development.

Giancarlo dismissed the efforts by a group of wireless switch start-ups that he said are failing to focus on what customers want. He said customers want to greatly simplify wireless in enterprise networks; they want to "put one box in the wiring closet and have an entire floor covered." Cisco plans to elaborate on its WLAN strategy early next month.

Verizon's Babbio said his company's enthusiasm for Wi-Fi is more muted, although he mentioned recently announced plans to convert old pay phones for use as Wi-Fi hot spots and that Verizon Wireless also has Wi-Fi designs. He said the pay phone-to-Wi-Fi service would be an add-on for DSL customers, not for the general public.

"I'm not sure what the business model is" for public Wi-Fi, he said. "But it's so early, we could be having a totally different conversation next year."

Paul Jacobs, president of Qualcomm Inc.'s Wireless and Internet Group, isn't so sure wireless carriers have big plans for Wi-Fi other than as a fill-in technology.

"I sort of feel trapped back in the Internet bubble days," he said, referring to the buzz surrounding Wi-Fi. When asked if carriers had requested Qualcomm to include Wi-Fi support in the chips it builds for mobile devices, he replied: "They have not asked us to do that."

But he said Wi-Fi could be good for cellular carriers because they are now charging a flat rate to users, and if they can get those paying customers off their cellular networks and onto Wi-Fi networks it could keep their cellular systems from getting overburdened.

Other Wi-Fi discussions at Vortex included a debate between former IBM Vice President of Internet Technology John Patrick and analyst Peter Bernstein of Infonautics Consulting. Patrick was charged with arguing for Wi-Fi as being the most disruptive technology since the Internet, while Bernstein took the opposite view. By show of applause, the audience judged the debate a draw, apparently unconvinced by Patrick's examples of Wi-Fi's promise and ability to reshape social norms.

Wi-Fi at work

Perhaps more persuasive was GM's Scott, who said the automaker spends $3 billion a year on IT. Among its recent projects was replacing almost all proprietary spread spectrum wireless networks with 802.11. One thing he likes about Wi-Fi is that it's a standards, and that fits into an approach at GM whereby the company tries to stick to buying standard technologies to help simplify support and interoperability across its many locations. GM also is looking at voice over Wi-Fi in some areas.

Although GM hasn't experienced huge surprises with Wi-Fi, Scott said the company has used the technology in more places, such as quality control, than originally intended. However, GM doesn't quite trust the technology enough to support applications in the manufacturing process that involve human safety, he said.

Scott cited 3G wireless as the most overhyped technology. "That's something we're not worrying about," he said.

Not that companies aren't without worries about Wi-Fi. Ted Julian, chief strategist for security company Arbor Networks Inc., said Wi-Fi "has some encryption issues" - so much so that Arbor requires Wi-Fi users on its staff to come in through a VPN.

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