Wi-Fi: Up from the bottom
A Business Week article on the state of the Wi-Fi market is mistitled "Before Wi-Fi Can Go Mainstream". It is, in fact, already mainstream, but the adoption pattern is not one apparently recognizable to the BW writer. It is familiar to some of us Old Farts. We've seen it before: It's the PC all over again.
First some numbers. The consumer / SOHO Wi-Fi market segment was $1.6 billion in 2003. Assuming an average of $200 total was paid for AP and client, that's about 8m new installs last year. With a total market size of $2.5b, and an independent estimate of 22.7m total client and AP units shipped, that should be in the ballpark. Add on prior year shipments, and we may have quietly gotten to around 10% penetration into households. Not too shabby for a standard that was once upposed to be too complex and costly for the end user!
BW sees the lack of 'roaming agreements' among public hotspot providers as a major barrier to further adoption. Leading me to wonder why you need a roaming agreement when public Wi-Fi is turning into a free amenity. Glenn Fleishman reports on Schlotzsky's success with free Wi-Fi to attract and retain customers. (Hat tip: Cory) This may not make your local bagel shop into the Great Good Place, but it is becoming a competitive factor that may make Wi-Fi access free - if you're willing to wander down to the local watering hole and spend a few bucks.
Where adoption is slow is in large businesses. The 2003 figures attribute about 1/3 of the market to large enterprises, and considering the larger price tag typically paid for APs from the likes of Cisco, that's a lot fewer installs. This is usually written off to security concerns. That's true on the face of it, but fails to reveal some underlying issues.
The initially broken WEP security for Wi-Fi got some headlines, but can be ameliorated. The real problem in larger enterprises is often the many years of accumulated decisions on network and device architectures, authentication and privileges. With fixed PCs and wired networks, it's been very easy for designers and administrators to conflate location, device, network topology, user, role, and privileges when setting up network and applications systems. The combination of Wi-Fi and laptops invalidates any such assumptions, and will force IT to go back and clean up their prior simplifications.
The decision for wireless itself can be a tough sell if the company has recently coughed up for something like an optical network rebuild. Network admins used to planning cable routes and wiring closets need to learn about RF propagation and interference. Lurking behind can be the need to rebuild the enterprise's authentication and security around roles and privileges, a nontrivial endeavor. So, stick a few APs outside the firewall in public meeting rooms, and let someone else take the Wi-Fi arrows in the back.
Small businesses and homes have much smaller installed networks (if any), smaller premises, and simplistic authentication and security practices. Lack of a legacy means they can adopt easily. This underlies the PC-like market pattern. The tyranny of the installed base holds back the large enterprise buyer. While they will eventually adopt, the current Wi-Fi buying pattern is not a prelude to the mainstream, it is the mainstream.
Full disclosure: We have an investment in the Wi-Fi security and management space.