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Analyst: Individuals, not businesses, will drive hot spot market

Wireless hot spots have garnered a lot of attention and quite a bit of investment in the last two years. Dozens of vendors are diving into the market, and large retail chains -- including Starbucks, Borders Books & Music and McDonald's -- all offer wireless access points.

But behind all of the high profile announcements, hot spot service is still new and sparsely used. While business people tend to use them most, enterprises are loathe to develop the necessary usage policies, said Amy Cravens, a senior analyst with the Scottsdale, Ariz.-based research firm, In-Stat/MDR. Cravens recently authored a report on the hot spot market, and here she shares her insights into why business people love hot spots, even while businesses are giving them the cold shoulder.

Who is using hot spots today? Most users are business users, people on the road checking e-mail. But they do not...

have corporate accounts [through their companies]. Businesses themselves are not signing up for accounts. Why not? With large, corporate-level subscriptions, businesses are uncertain about which provider will be the best in the long run, or even who provides services where their executives travel to. Though, in the long run, it may make sense to get a corporate account because of discounts, most IT departments have not budgeted for the services right now.

And there is still the security issue. There are ways to make the connection secure, whether you use a virtual private network (VPN) or some sort of client software from the provider that encrypts the connection, but a lot of users may not take the time to go through the necessary steps to make it secure. For some IT managers, who are not comfortable with the technology, it is just easier to avoid it all together. That way, when something does go wrong it, is not their fault. Does Wi-Fi adoption bear a resemblance to any other technology?
To a degree, we saw a similar adoption pattern with cell phones, where individuals got their own devices and used them for business calls. But even today, the majority of companies still do not provide individual cell phones. It is really the only other mobile technology to compare it to. How are companies thinking about incorporating hot spots into their IT strategy?
Our research from last summer and fall show that only a very small percentage of companies were considering wireless hot spots as a mobile or remote access solution. Certainly, at the right price point, it can have value, and given that the user is able to access not just e-mail but applications as well, it may be a service worth considering. Who are the wireless ISPs targeting?
Most are targeting the business traveler, but only a few are targeting those people through corporate subscriptions. iPass is one of the vendors that is going after the corporate market. I think the corporate market will develop from individual users who have these services and push their companies to buy corporate level subscriptions. It will be individuals that initiate this.

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Get help from Wireless expert Lisa Phifer

Which applications are people using?
E-mail is still the primary application.

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