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Businesses, Employees Leading Wireless Market to Growth

  |  March 5, 2002   |  Comments

Business-to-employee services led the wireless e-business market in 2001, a year when wireless e-business revenue totaled $110 billion, according to Gartner.

Business-to-employee (B2E) services led the wireless e-business market in 2001, a year when wireless e-business revenue totaled $110 billion, a 46 percent increase over 2000 revenue of $75 billion, according to Gartner.

As the wireless market focused on B2E and began to mature, Gartner found the market shifted from being dominated by small, specialized vendors to being increasingly dominated by the large, traditional vendors.

"We found that some vendors have their fingers on the pulse of this market and are set to do well, while some are still struggling as to how they will play in this market," said Victor Milligan, vice president for Gartner Consulting. "Looking ahead, vendors must work to provide more holistic solutions to address wireless e-business needs."

According to the study, two major considerations will affect the wireless market – namely, the future impact of the economy and the needed focus on the quality of the users' experience.

"We found that the global economic slowdown impacted the growth of this market, especially for services as budgets were redirected to business continuity needs," said Milligan. "Our view is that in 2002 wireless e-business should fare better than other solutions because it is so intrinsically linked to efficiencies and return on investment."

Moreover, future consideration for vendors must be to increase the focus on the usability and convenience of wireless e-business.

"In the past, vendors were focused on the enterprise or business value of wireless e-business," Milligan said. "They did not sufficiently focus on the specific needs of the user – particularly the type of user who does not have the skills and patience to navigate wireless e-business operations. Vendors must focus on these users because they will be a key constituent within the business lines."

The study revealed some critical success factors in the specific segments of the wireless market that will ultimately determine its growth and growth rate in 2002.

"In the middleware space, the portal is increasingly becoming the centerpiece for wireless management and provisioning," Milligan said. "Vendors that can embed wireless application gateway functionality into their portals and support wireless from a feature and function standpoint are best positioned to succeed in this market."

Success factors for professional services were also a focus of the study. Application development comprised 67 percent of overall service revenue in 2000 and 2001. In 2002, services vendors will have to focus on new service offerings to maintain the 80 percent level of growth achieved in 2000 and 2001.

There is plenty of room for growth in the wireless market. According to a study by the World Information Technology and Services Alliance and the Wireless IT Research Group, international corporate IT industry spending on wireless applications will reach an average of $680,000 in 2002, a 94 percent rise over the $360,000 in 2001.

The B2E sector will also continue to lead organizations into the wireless arena. Wireless and mobile transactions will account for nearly 20 percent of B2B transaction volume and 25 percent of B2C traffic by 2003, according to a study by META Group Inc. But organizations with heavy use of wireless devices by employees are more aggressive in implementing leading-edge wireless/mobile infrastructure, with B2E applications getting the highest priority.

Research by Cahners In-Stat found that 47 percent of the U.S. workforce (more than 60 million U.S. employees) will have access to wireless voice, pagers and/or mobile computing devices, like Palm Pilots, by the end of 2001. In-Stat expects wireless adoption in the business market to rise to more than 60 percent of the workforce by 2004, and the smallest companies (with less than 100 employees) will account for the largest group of wireless business users.

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