During the recent NetWorld+Interop show in Las Vegas, IDC analyst Abner Germanow presented a wireless LAN market assessment. As usual, there's good news and bad news.


The business case for WLANs is maturing, according to a survey of 130 enterprises conducted by IDC in March.
Businesses are beginning to justify WLANs for conference-room network access so that they can collaborate more effectively and improve the productivity of meetings. Guest-network access is also becoming a biggie, particularly for consultants. Finally, WLANs are finding a home as replacements for wired networks, most notably in temporary and small offices.

The worldwide market is growing.
Shipments of enterprise-class access points grew from about 500,000 in 2002 to 750,000 in 2003. They are expected to reach about 1.3 million in 2004 and 2.1 million in 2005, says IDC.

Advances in wireless security are driving network spending.
IDC's March survey shows what would motivate enterprises to upgrade their WLANs. Gaining "higher security" was the top reason. This motivator earned an average ranking of 3.34 (respondents ranked reasons on a scale of 1 - 5, with 5 being highest).

The second most popular reason was "more access bandwidth" (2.96), followed by "new data applications" (2.84) and "increased number of users" (2.82). The least motivating upgrade factor was "voice/streaming media apps" (2.08).

Evidence of the advances in wireless security as a WLAN market driver include the fact that the formal security extension to the 802.11 standard, 802.11i, is on schedule for approval next month with compliant products to follow, noted Germanow. Meantime, partially compliant Wi-Fi Protected Access (WPA) products, which fix the static encryption security holes in Wired Equivalent Privacy (WEP), of course, have been shipping for many months. And the ability to monitor the airwaves for unauthorised nodes is available from most systems vendors (as well as third parties).


Enterprise growth seriously lags consumer/SOHO growth
Shipments of enterprise-class access points were about 750,000 in 2003, for example, while nearly 10 million "value-class" (ie "cheap") APs shipped during the same period, according to IDC. And while enterprise-class AP shipments might break the 2 million mark by 2005, IDC expects value-class AP shipments in 2005 to reach about 23 million.

Note: One important reason cheaper devices do so well is that consumers tend not to concern themselves with security (unfortunately). While the progress in wireless security is one reason that enterprise-class WLAN deployments are picking up, the flip side is that a survey of 130 enterprises, conducted by IDC in March, revealed that being "worried about security" was also the No. 1 factor for enterprise that have not installed WLANs.

WLANs are a "nice-to-have," not a "must-have."
Germanow pointed out that business justifications are increasing within enterprises for installing WLANs. However, WLANs are not a no-brainer, he said.

Though WLANs might indeed be required in a particular vertical application within an enterprise, they are still not necessarily essential throughout the entire company. Businesses already have high-speed LANs that run well and have been lovingly (and expensively) honed. And WLANs add complexity, increase IT costs and force security investments.

Meanwhile, the competitive advantage is unclear: you can still get a certain degree of mobility from wireless services.

In fact, 38 percent of IDC's March survey respondents said they have not installed WLANs because there is "no need/no real reason" or "no business value" associated with doing so. These concerns ranked second only to the security anxieties mentioned.

Voice on WLANs is still in the hype stage
Germanow said he sees 2004 as a year of "Wi-Fi voice hype but little revenue." He said "2007 and beyond" will find "Wi-Fi voice and indoor mobile [cellular] in a grudge match."