From the April 4, 2003 print edition

The wave of wireless

Aliza Earnshaw Business Journal staff writer

Could radio inventor Guglielmo Marconi ever have imagined that someday, his invention would be so small that it could live on a chip of crystallized sand smaller than his smallest fingernail? Could he have imagined that enough information to fill both the Italian National Library and the British Library would someday travel through the air in the merest instant?

For that is what wireless actually is: radio. And just as the earliest use of radio was to bridge places where wire cables couldn't go, today we are using highly refined radio technology to transmit data from the home office to the satellite office, from one end of the corporate campus to another, from tailless mouse to a computer's hard drive.

Wireless has been termed the next killer app by a number of people in the tech and business worlds, perhaps hopefully, perhaps accurately. One thing is certain: If anything has the power to drive new investment by business and new purchases by consumers, it is the dual and simultaneous quests for more information and greater mobility of that information.

The degree of hope being placed on wireless is most easily seen right now in Intel Corp.'s $300 million-plus advertising campaign for Centrino, the company's new "wireless platform," consisting of a new Pentium-M processor, a chipset to go with it, and a wireless chip, which is really a tiny radio transceiver that communicates with data networks.

Intel's newest and most expensive push ever is more than just another "Intel Inside" branding campaign. With television advertising that won't quit, and print ads whose size and thickness cleave even the heftiest magazine in two, what Intel has embarked upon is nothing less than a massive re-education of the buying public. Intel wants people to recognize, and finally expect, that all computing and web surfing can be done--indeed, should be done-- without the benefit of wires and cables.

Intel's vision of wireless as the next big thing is shared by a number of industry experts and mavens, including National Semiconductor CEO Brian Halla, who said at last year's Comdex tradeshow that far from being over, the internet boom has not yet occurred--and that demand for wireless internet access will be a major driver for the boom-to-be.

Intel's goal is clear: to create as much demand as possible for its own Centrino technology, and whatever else is coming right behind it. To that end, Intel has said it is investing at least $150 million in companies creating wireless applications--to be specific, applications running on 802.11 standards, also known as Wi-Fi (for "wireless fidelity"). One of these, Cometa Networks, has just announced plans to set up "hot spots," or wireless access points, at several hundred McDonald's restaurants across the country this year.

But it's just as clear that with Intel's massive engine behind the push, other companies will benefit from a shift to wireless computing and internet use. As consumers demand more hot spots, and businesses regard wireless local-area networks as the norm for office suites, more opportunities to sell to wireless networking equipment makers will open up for local companies like Tektronix Inc., Lattice Semiconductor Inc., TriQuint Semiconductor Inc. and RadiSys Corp.

Just as all of these companies have suffered from the telecom crash, so should all of them hope to benefit from a rise in demand for Wi-Fi equipment and services.

"Wi-Fi is really the next Ethernet," said iSuppli senior analyst Scott Smyser--or to put it another way, the technological shift that linked computers together on cabled local-area networks (LANs) is about to be repeated for wireless LANs.

Smyser predicts that the market for wireless LAN equipment will grow from nearly 22 units last year to 50 million units in 2007. Smyser also predicts that this better-than-doubling in unit shipments will be accompanied by the usual downward curve in tech pricing. LAN equipment sales of $1.6 billion last year will grow to $2.25 billion in 2007, Smyser predicts.

Paul Thompson started up IPT Northwest in 1982, and has been installing and managing LANs ever since. Recently, Thompson has seen more demand from his customers for wireless technology. IPT Northwest's network upgrade for the Oregon Cherry Growers association includes adding wireless network access to the group's warehouses. Wireless will allow the group's employees to tie data from laptops and bar code readers used in the warehouses to the organization's enterprise software system.

While the wireless portion of the Oregon Cherry Growers project isn't the largest part, it is certainly representative of a shift Thompson is seeing in IPT Northwest's business.

"Wireless is becoming a part of more projects," he said. And Thompson fully expects that trend to continue. "There's going to be wireless and seamless integration of everything," as mobile devices with ever-greater computing power proliferate, along with the number of hot spots and nodes available.

Kevin Doherty founded ESP Technologies Inc. in 1989, and is also seeing interest in wireless technologies growing. ESP Technologies has installed a wireless network at Jesuit High School, and is in the process of putting wireless networks into schools for the Salem-Keizer School District, "piece by piece, as they get their funding" to do the installations.

Doherty said that some customers have to be very cautious about wireless, as it is more difficult to assure data security on a Wi-Fi network than on a wired one. While companies in high-confidentiality areas like health care and financial services can use technologies such as virtual private networks assure a higher degree of security, there are also trade-offs in network performance. It may not be worthwhile for some users to make that trade-off, Doherty said.

Furthermore, wireless-enabling devices are inexpensive and easy to install, which is good for the customer, but generates less revenue for the company doing the installation. So while wireless will certainly grow in popularity, it will contribute less revenue to ESP Technologies and other companies like it than one might expect, Doherty said.

David Ness is now in his 19th year of running Matrix Communications, which sells and installs telephone systems for businesses. Matrix offers a range of wireless options, including Wi-Fi based phone systems that allow users on a corporate campus to carry a portable phone very much like a cell phone, operating on the campus Wi-Fi network.

These phones share all the sophisticated features of wired business phone systems, and often add other benefits, such as voice-over internet protocol, also known as voice over IP.

With this kind of system, an employee can call into the office system from home, using an internet connection, and can participate in a conference call with outside customers or vendors, exactly as if he or she was in the office. Portable phones with voice-over IP capability can also be used for internet access, just as people now use cellular phones to surf the web.

Wireless can also be a more economical way to extend phone service to other locations than cable. For Dark Horse Comics in Milwaukie, Matrix has put in an 802.11g system, which has greater range than the better-known 802.11b protocol, to connect two buildings that are sited across a main road from each other.

"Normally they've have paid $7,000 to $8,000 to run fiber under the road to connect one building to the other," said Nigel Ballard, Matrix's director of wireless. Instead, Matrix has installed a transceiver on each building for "a mere fraction" of the cost of a fiber cable, "and with no disruption," said Ballard.

"There's no digging up the road, and none of these huge holes in the wall, and waiting 60 days for the telco to come out" and complete the job, he said.

Ness, who has been in the telecom business for 25 years, has no doubt that Wi-Fi investment is poised to grow. With wireless networks in place, companies can begin to use all kinds of portable devices to accomplish all kinds of tasks that once tied people to their desks.

Both in the workplace and outside, "in three to five years, it will be normal always to travel with some device," said Ness. "Ten years ago, who would have thought everyone would have a cell phone?"