The enterprise market is getting more complicated.
The advantage for enterprises is they have more choices in terms of how
they deployand manage their wireless devices and services.

Enterprises want to save money on their wireless phone bills, so why not offer them a way to move minutes off the cellular network and onto voice-enabled Wi-Fi networks?

To some vendors, it sounds like a great idea, but wireless carriers aren’t exactly embracing it, for obvious reasons. T-Mobile USA broke ranks on the consumer side with its HotSpot@Home service, but for the most part, wireless carriers are not jumping at the chance to move enterprise minutes off the mobile networks. After all, why spend billions on a network and then encourage people not to use it? It doesn’t mesh.

That’s not stopping upstarts like DiVitas Networks and Agito Networks, which are joining the ranks of Cisco Systems, Siemens, Aruba Networks and others in fixed mobile convergence (FMC). The newcomers each are offering enterprises the chance to cut their cellular minutes while directing more traffic to Wi-Fi. They face an uphill battle, to be sure, but they are making inroads, nudged along by rumblings, primarily from outside the industry, for more open networks. Indeed, DiVitas is getting help from none other than Nokia, and Agito, while still fresh out of stealth mode, is conducting a growing handful of trials spanning various verticals. Some analysts even see the day when cellular operators will incorporate such solutions into their own offerings.

The Platform for Convergence

1Source: Dell’Oro 2 Source: Network World 3 Source: ABI Research

“TUG OF WAR”
Right now, the good news for wireless carriers is enterprise customers are accustomed to having their needs met through them. A recent mFormation Technologies-commissioned survey of CIOs from top enterprises shows that businesses are looking to their mobile operators to provide the tools and services to help them control, secure and manage mobile devices.

In fact, two-thirds of the CIOs, or 66%, indicated they would be willing to switch operators if their current provider did not offer a mobile device management solution and another one did, says Matt Bancroft, chief marketing officer at mobile device management solutions provider mFormation. That might sound bad for carriers that don’t offer management solutions but spells opportunity for those that are pro-active, he says.

mFormation works with three of the four nationwide U.S. operators – Sprint Nextel, T-Mobile USA and an unidentified carrier, as well as Telus and Bell Mobility in Canada. Bancroft sees services like those offered by DiVitas and others as complementary to mFormation. They help enterprises make decisions about when to connect to Wi-Fi and manage the complex settings and protocols that are involved. “It’s a valuable capability,” he says. “We sort of offer a broader set of tools to the operator and to the enterprise.” A mobile device by definition needs to be connected to the mobile network operator, and enterprises still need to monitor, secure, configure, update and diagnose issues, he says.

The dilemma for many enterprises still revolves around the phones that employees bring into their system, downloading confidential company information on devices that the employees bought, not the enterprise, yet the employees see their phones as their own personal devices. “It’s a real tug of war,” says Paul DeBeasi, senior analyst at The Burton Group.

Call to the Enterprise

Source: Agito Networks

STEP BY STEP
While DiVitas has had some challenges in getting its solution widely distributed into enterprises, it is taking steps to address the distribution problem. Earlier this year, the company started collaborating with Brightpoint and Nokia to get into enterprises with the DiVitas Wi-Fi/cellular roaming solution. It marked a significant move for DiVitas’ U.S. strategy, according to Vivek Khuller, CEO and founder of DiVitas.

A challenge for DiVitas in the United States is handset makers for the most part do not want to get on the wrong side of their bread-and-butter mobile operator customers. Nokia is big enough to challenge that role, says Stan Schatt, vice president of networking at ABI Research. But DiVitas still needs to find other handset makers that are as “courageous” as Nokia, he says. “It’s one thing to get Nokia. It’s another thing to get Motorola.”

While Agito targets larger enterprises, its big differentiator is location awareness. Founded by two ex-Cisco veterans, Agito introduced its RoamAnywhere Mobility Router in October. The location awareness means the system will use Wi-Fi when it’s available and move back to cellular if it’s not. For example, if an enterprise has Wi-Fi enabled on the first floor but not throughout the building, an employee could be on Wi-Fi on one floor but move back to cellular when he or she goes to the second or third floors.

Roshan: Indoor coverage makes a case for Wi-Fi.

Coverage indoors is a big reason enterprises want to use Wi-Fi, according to Pejman Roshan, co-founder and vice president of marketing at Agito. But he acknowledges the situation highlights two opposing forces. Enterprises don’t want to spend more money than they have to, and they’re not keen on installing distributed antenna systems to make up for poor cellular coverage. Yet Roshan hears FMC vendors promise new opportunities for carriers without mentioning the savings for end-users. “If that’s the mentality, they are going to be at odds with enterprise,” he says. “They just don’t match up … That’s why you see companies like us step up. We think we can do some good.”

Solutions from DiVitas, Agito and others have the potential of taking business away from wireless carriers, but “I don’t know what the cellular operator can really do about that,” DeBeasi says. “Enterprises want to control their own destiny and what applications work with these solutions. They want to roll things out at their own pace. If you go with a service provider, you’re at their mercy.”

Verizon launched its own FMC service last summer, but it doesn’t use Wi-Fi and actually encourages more usage of the wireless voice network, he adds. In terms of Wi-Fi for data, Verizon Wireless works with customers who want Wi-Fi in campus environments and encourages them to develop a wireless strategy that offers the best solutions for their needs, according to Verizon Wireless spokeswoman Brenda Raney. The carrier’s policy on using Wi-Fi for voice is not as clear.

EARLY STAGE
It’s still the early stages for FMC, with some products on the market for less than a year. Enterprises, once they know the solutions exist, need to figure out how to use them. “These FMC solutions require integration of various pieces,” DeBeasi says. Customers also need to have the Wi-Fi access points, which means buying products from the likes of Cisco or Aruba as well. “The customer needs to be a little bit of an integrator to pull all the pieces together,” he says.

Even when an enterprise uses a solution like that from DiVitas or Agito, it needs cellular service, usually from more than one provider, for out-of-building coverage, so it’s not as if the carrier is getting cut out completely. But some analysts see the startups as agitators ready to provoke change.

Handoff to Wi-Fi

Source: Agito Networks

Right now, “DiVitas is an influencer,” Schatt says. While carriers might not care about DiVitas today, “they definitely care” if a company the size of Exxon suddenly says it wants employees to use dual-band phones throughout the enterprise.

“The market for this technology should be very good,” says Craig Mathias, principal at the Farpoint Group. It’s a little unusual, however, in that the battle will be won in marketing, not technology. The company that does the best job of defining why such a solution is desirable will reap the benefits.

And carriers don’t necessarily have to miss out on revenue, he says. Moving traffic off the licensed spectrum network and freeing up capacity is an advantage. In fact, while wireless operators are busy today with various network upgrades and upcoming auctions, Mathias sees the day, some years down the road, when a carrier will adopt a DiVitas or Agito type of solution and brand it as their own. “I don’t think carriers can afford to ignore the WLAN space,” he says. “It’s a crazy idea, but I think it’s a crazy idea that’s going to win.”