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Mobility: Flexibility is driven from the bottom up

Stephen Pritchard
Financial Times
29 May 2009

The fastest growth in IT and mobile communications is coming from devices that are small, simple, and above all, cheap.

Netbooks, simple portable computers that sell for less than $400, are the only technology sector set to post any significant growth in 2009. Gartner Dataquest, the research firm, expects sales to reach 21m units this year, up almost 80 per cent on 2008.  The other surprise success has been the USB cellular modem, or “dongle”. Sales of these compact and cheap units that provide mobile internet connections are expected to reach around 25m units in 2009. Although this is a tiny proportion of even 3G mobile phone users, dongle sales are growing at around 25 per cent, year on year.

According to Roger Roberts, a partner at McKinsey & Company, the consulting firm, both companies and individuals are looking for simplicity. “Growth has come from unexpected areas, such as netbooks,” he says. Certainly, it is appealing to have a device that simply plugs in and provides internet access, whether it is via a USB dongle, or a mini-notebook that gives wireless local area networking or even 3G connectivity.

Such devices can come into their own in ways IT directors might not expect. When heavy snow caused the transport network in much of southern England to grind to a halt earlier this year, several mobile networks reported spikes in their mobile data traffic, as stranded commuters turned to their 3G devices to connect to corporate networks from home.

But the growing interest in small, cheap and simple mobile devices also reflects the wider trend for individuals to buy their own technology, both for personal and increasingly, for work use.
This “consumerisation of IT”, as Gartner describes it, could ultimately have as great an impact on businesses’ plans for a more flexible and mobile workforce as technical developments such as 3G, or newer networks, such as LTE (Long-term Evolution of 3G).

“It is being driven from the bottom up, by people wanting the technology,” says Carsten Sorensen, a researcher in mobile technologies at the London School of Economics. “It is about small, flexible technologies that are not related to the core business. They are under the radar [of IT], but this can create problems as the solutions are often not scalable.” At the same time, the potential prize for the effective use of mobility – and more broadly, flexible working – is substantial.

According to Guido Häring, general manager of customer services and support in the Emea region at Microsoft, his business has saved around 30 per cent of its travel and expenses budget through unified communications. Further savings have come from allowing staff the flexibility to “hot desk” or to work from home. Mr Häring himself, for example, no longer has a permanent desk at any Microsoft site.

Of course, Microsoft makes and sells unified communications technologies, so the company would be expected to make use of them. But mobile working is not just about communications. It is also about the ability to access company data and business applications.

“From the user’s perspective, it is about application persistence,” says Robert Gleichauf, Cisco’s chief technology officer for enterprise, services and security. “People want to pull together information from a variety of sources; information is now very fluid. “So it might not be as much about the latest shiny gadget, as about having a persistent connection.”
For network operators, this means continuing to invest in infrastructure to improve coverage, capacity and connection speeds.

As Alan Carr of PA Consulting points out, next-generation wireless technologies such as LTE are more efficient in their use of spectrum and network capacity than 3G.

The danger is that the improvements – even based on the industry’s own predictions of capacity increases of between three and five times – will not be sufficient to keep up with growing demand for data services, both from consumers and mobile workers.

“The 4G networks carry data better than 3G and can also be used for voice, but we have already seen a dramatic increase in the uptake of data,” he says.

Some mobile networks are reporting four-fold increases in data usage over the past year, driven mostly by sales of 3G dongles and laptops with built-in cellular connections. With growth on this scale, the risk is that networks will be unable to improve capacity – let alone improve connection speeds – without significant further investment.

For businesses, this also presents a challenge because coverage improvements might be delayed. As a result, applications will need to be smart enough to cope with variable connection speeds and connectivity black holes for some time. Mobile workers, for example, might be unwise entirely to rely on cellular connections might be unwise. Secure Wi-Fi access via a corporate account and a virtual private network is still part of the road warrior’s armoury, and technologies that route calls seamlessly either via cellular or voice over internet (VoIP) systems will be more robust than one that relies on VoIP alone, at least for companies that can afford it.
Businesses should also be prepared for rising connection costs. Fees for mobile data could rise as networks use price as a way to constrain demand.

Companies have already found that costs for fixed-line connections have risen, as a result of cost-saving initiatives elsewhere in the business, whether it is data centre consolidation, or technologies such as unified communications and video conferencing. “The result of all these initiatives is to put more applications and more bandwidth on to the network,” he says.

“There is a case that even when IT budgets overall are being reduced the projects that are being initiated are demanding bandwidth, and some companies have seen demand grow by between 70 and 100 per cent.”

Such costs can be offset by the improvements in productivity and effectiveness that can come from mobile working. Companies that have introduced mobile e-mail report improvements in customer satisfaction, as the right staff can respond to queries, even if they are not in the office. Deals can also be closed more quickly, and executives say they are better informed.

Putting hard figures against such benefits, though, is notoriously hard. Almost any technology that saves time for an executive on a six-figure salary can be justified, with a payback period of a few months. For blue-collar workers, carrying out structured tasks, companies quickly see the gains from eliminating paperwork or steps in the business process.

For the large number of workers that do not fall into either category, the picture is less clear.
CIOs and HR directors also have to look not just at the cost, but also the personal consequences of permanent connectivity. According to Mr Sorensen, one Danish company has set up its mobile e-mail system in such a way that staff do not receive messages out of regular working hours, to preserve the separation between work and home life.

This is by no means a unique problem. “Remote working is often managed very badly,” says Rob Gear, a mobility specialist at PA Consulting.

“You can’t just put a BlackBerry in someone’s hands and tell them to get on with it. “Some people will become very anxious about the idea that they have to respond to an e-mail at 10.30 at night.” Businesses are discovering that, whichever technologies they use, mobility has to be well managed to deliver genuine productivity benefits.

Contact the telecommunications team

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