Enterprise wireless planning: Strategies for success

Telecom carriers working with enterprise customers on wireless strategies must address mobility needs, spending limits, evolving standards and wireless broadband needs.

Any telecom service provider that hopes to help their business customers implement an enterprise wireless strategy needs to walk the walk if they want to make the sale. The bottom line is that in this consultant and partner role, carriers must understand enterprise mobility needs, spending limits and evolving wireless standards.

This SearchTelecom.com guide, Enterprise wireless planning: Strategies for success, looks at the big picture of how carriers can increase revenue by understanding enterprise customers, working within corporate spending limits, and providing expert guidance in the evolution from 3G to 4G wireless broadband services. This is the guide to read, review and discuss to help you win the sale.

Table of contents
  Understanding enterprise mobility strategies
  Enterprise wireless: Calculating business spending limits
  Wireless 3G and 4G data standards: Central to business

  Understanding enterprise mobility strategies  

Carriers are service providers and as such must be very attentive to their customers' needs and plans. This is never more evident than in the area of wireless services, where competition is rapidly driving service pricing down to the cost of providing it, leaving margins razor thin.

One solution is to understand what enterprises are planning so carriers can position their service offerings to meet emerging needs and to anticipate the market in order to generate maximum margin.

Understanding enterprise wireless mobility planning

It is important to first understand that mobility planning is becoming a very big deal for enterprises. According to recent studies conducted by Nemertes Research, more than half of enterprises that participated indicate that they have or are developing mobility strategies. And it is no wonder. First, companies that have developed strategies increase the impact of mobility solutions on business sales generation by more than 15% when compared with companies that deploy mobility without a strategy. So carriers are very likely to find that their customers are thinking in terms of planning for mobility.

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Second, mobility planning is becoming very business-focused. Enterprise strategic planning is more likely to concentrate on the business impact of mobility. As mobile workers increasingly depend on mobile devices to deliver not only voice but data communications, as well, mobility is rarely standalone anymore. And enterprises are finding that mobility spending is tied directly to IT spending. Mobility strategic planning seeks to consolidate wireless spending so the enterprise can leverage a larger budget to gain advantageous pricing and reduce costs.

A final complication for any mobile strategy is that mobility planning is evolving to incorporate more complex communications and computing capabilities such as fixed mobile convergence (FMC) and Wi-Fi integration. Although FMC is not a big concern in enterprises -- Nemertes finds that 10% of enterprises that participate in benchmark studies are currently deploying some form of FMC capability. Wi-Fi integration is rising in importance as enterprises seek to leverage their infrastructure investment with dual-mode VoIP-capable phones and other roaming data services.

In addition, mobility is beginning to morph into a larger unified communications strategy. Research by Nemertes indicates that companies with mobility strategies are also likely to be developing unified communications strategies. And more often than not, unified communications planning is associated with extending corporate applications and capabilities to the mobile worker.

The carrier's role in enterprise wireless strategies

As noted above, carriers should be very aware of their customers' business objectives and critical business processes. At the very least, they should understand the primary business of their customers and how revenue is generated.

One comment that Nemertes hears over and over from enterprises is that carriers with whom they have done business for years still come to contract negotiations acting as though it is the first time they have ever heard of the enterprise's needs. Enterprises are looking for trusted partners that can articulate capabilities in terms of the enterprise business.

In addition, carriers need to be prepared to help enterprises establish and track business metrics. Many of the enterprise IT professionals interviewed by Nemertes indicated that they do not track business metrics. This causes problems when IT seeks to justify expenditures and makes it hard to prove that a service is beneficial when seeking to expand that service.

The bottom line is that carriers must plan to lead a service discussion with some form of professional service offerings for their enterprise customers. Helping customers adopt appropriate telemetry around critical mobility-dependent business processes will ensure increased sales. Helping them plan and implement the appropriate mobility solution will create an enduring relationship with the customer.

  Enterprise wireless: Calculating business spending limits  

Telecom service providers typically think in terms of capturing consumer "share of wallet" when estimating sales potential and revenue. In a market as dynamic as wireless, this is a hard thing to do. The problem lies with the speed. Wireless 2.5G data services are evolving quickly to 3G and beyond to pre-4G. The kinds of applications that can ride such data rates are also in a state of flux. Estimating the demand for wireless services in such an environment can be like throwing a dart at a dartboard.

Then there is enterprise sales potential. So how big is the enterprise wallet for wireless? One way to estimate is to determine what enterprises are spending now on wireless services and applications that ride those services. Nemertes Research has done exactly this, and, in the course of two ground-breaking studies -- Advanced Communications Services and Unified Communications and Collaboration -- has developed several metrics that give some insight into what enterprises are willing to spend in order to integrate wireless into their IT infrastructure.

Enterprise wireless spending correlates to IT spending

Nemertes finds that wireless spending is closely correlated to IT spending generally. The reason for this is simple -- wireless is becoming a key method for enabling mobile workers, both on and off enterprise campuses.

Nemertes has found that wireless spending, expense and capital tends to be about 4% of IT spending. For mobile services, the median spend across all demographics tends to be $1,000 per mobile data user per year. And as IT spending increases, wireless spending increases proportionally.

In addition, since IT budgets tend to be strongly correlated to annual revenue, it is possible to estimate wireless spend simply by knowing the company's revenue. Nemertes has found that wireless service spending represents approximately 0.04% of annual revenue.

This means that an accurate estimate of how much an enterprise will spend on wireless services can be made simply by looking at its IT spending or by looking at its annual revenues. These are easy to determine -- simply ask the business or check financial reports.

Understanding service provider implications

For carriers, the implications are profound. Regardless of the size of the company, knowing the IT budget also tells you a reasonable amount of wireless spending for that company. Further, it indicates the likely point of resistance when selling services. If a company is spending less than average, it will probably be open to increased spending on wireless services. If it is spending more than average, the company is likely to be looking for ways to reduce spending, either through consolidation of service offerings or better pricing. Either way, there is an opportunity for selling competitive offerings.

Also, Nemertes' research has disclosed that mobility planning is now becoming a part of larger issues, such as unified communications planning. As wireless becomes a central feature of unified communications architectures of the future, wireless spending is likely to increase as a proportion of IT spending. Increasingly, mobility spending will be driven by the need to integrate a wireless data environment into a fixed data environment.

The opportunity for carriers is clear -- wireless is no longer an optional expenditure for enterprises. Wireless mobility is now firmly entrenched in IT budgets and is directly proportional to revenue. Carriers that want to estimate the potential market for their wireless service offerings need to start with their customers' IT budget and revenue figures, then factor in the impact of unified communications planning. This is an easy way to estimate the total wallet for wireless. Once carriers understand the total wallet, it is up to them to design services that maximize their opportunity to capture as much of that potential spend as possible.

  Wireless 3G and 4G data standards: Central to business  

Do standards matter? Specifically, do wireless data standards matter? For the consumer wireless market, the answer is probably no. Consumers generally respond to the feature set or form factor of the wireless device when selecting a carrier. In the business market, however, where the application that has to ride the wireless network is the important consideration, standards can matter very much in terms of how businesses want to use the network.

In recent research into the use of unified communications and collaboration, Nemertes Research found that enterprise IT executives are concerned about the wireless standards being used by carriers and are even willing to change operators based on the technology choices they make. Thirty-eight percent of the executives Nemertes interviewed said they would definitely factor the wireless standards being adopted by carriers into their unified communications planning. .

But why? After all, carriers are busily deploying ever-faster networks, rapidly evolving to 3G and pre-4G technologies. Transfer rates are increasing as this evolution occurs. Businesses should be happy, right? Well, maybe.

Latency and coverage trump raw bandwidth

Carriers need to look at this evolution from the standpoint of the business customer. Transfer rates aren't always the issue. In many cases, considerations such as latency and coverage are more important than raw bandwidth. What many businesses are realizing is that the wireless standard and where it is being deployed can have a profound impact on the utility of a wireless-enabled mobility application.

For enterprises, many of which require their mobile employees to have a very large area of operation, having access to HSPA 3.5G in certain markets may not be good enough. In such a case, selecting a carrier that provides the somewhat less capable EV-DO 3G -- but over a wider area -- may be a better choice. This is especially true if the coverage involves a greater number of cell sites, since proximity to the site often determines the latency characteristics of the network.

Enterprises are increasingly asking for a peek under the hood of the carrier's network. They want to see coverage maps that are more than simple graphics and are asking for detailed information on transfer rates and latency by geography. Many are asking for detailed information on the carrier's evolution plans, where the evolution will take place, and the impact of that evolution on things like wireless capital investments.

This means that carriers need an approach to enterprise IT organizations that is different from their approach to a consumer. Rather than talking exclusively in terms of features, the carriers need to disclose more about how those features will be delivered and, just as important, how the evolution of wireless will affect those features.

Carriers also need to fully understand how their business customers will use their networks. Carriers should certify their networks for different classes of applications -- from simple email and texting all the way to dedicated VPN tunnels, which can be highly sensitive to things like latency or dropped connections.

Carriers must understand that wireless is becoming a fundamental component of enterprise IT infrastructure and is increasingly falling under the same budgeting and, more importantly, planning processes.

Fifty-six percent of IT executives Nemertes talked to indicated that they either have or are developing mobility plans. These plans involve deciding which applications will be wirelessly enabled and what budget will be devoted to mobility integration. Carriers that want to sell to this evolving market should ensure that they are a part of assisting in enterprise mobility planning development. Ensuring that enterprise customers have the information they require -- specifically, information on standards and the capabilities they enable -- is an essential first step.

About the author: Mike Jude brings 30 years of experience in technology management in manufacturing, wide-area network design, intellectual-property management and public policy. Jude holds degrees in electrical engineering and engineering management respectively, and a Ph.D. in decision analysis. He is the co-author of The Case for Virtual Business Processes: Reduce Costs, Improve Efficiencies and Focus on You Core Business, Cisco Press, 2003.

This was last published in May 2009

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