Wireless Research Report India

Study on Adoption of Wireless Solutions Among Enterprise Users in India & Emerging Trends

Location: Mumbai Date: 11th October 2004 Size of Survey: 50 respondents

Objective of the survey: CXOtoday.com is the country’s first national e-news daily, offering tech-centric deployment news to those who think, invest and manage IT. Going one step ahead in providing value-added content to technology managers, we have formulated our first research report to gauge the impact of wireless Internet in the Indian enterprise space. The objective of this study was to understand the state of adoption of wireless among enterprise users in our country and to provide glimpses of the emerging trends in this space. Respondents Contacted: The respondents contacted for this survey belonged to the level of the CIOs, CTOs and the respective heads of IT, spanning diverse industry verticals, such as banking, manufacturing, media, to education, chemicals, etc. CXOtoday thanks all the respondents who have participated and helped us in successfully conducting this survey. We are glad to share the results of this study with our audience. Results of the Survey: Coming on to the results of the survey, they have taken us by surprise too! While adoption of wireless is currently low among enterprise users, what is intriguing is the optimism shown by companies in investing in wireless in the coming financial year. The Indian wireless market may well be on its growth path, not without first addressing gnawing concerns of security and cost. The results of the survey have been presented in a step-by-step synopsis categorized below:

Low Adoption of Wireless Among Enterprises in India Of the total respondents contacted, wireless adoption among enterprise customers is surprisingly low at 32%, while a significant 68% have not deployed any wireless solutions. Despite the fact that the technology debuted several years back, why is that it that it has failed to penetrate as much as Current Adoption of Wireless Among its wired predecessor? Enterprises in India

Answers Ishwar Jha, vice president business technology, Essel Group, “The culprits for this poor response to wireless are two pronged: First is the low penetration of laptops and other mobility devices.

80% 68%

%age of usage

70% 60% 50% 40%

32%

30% 20% 10%

2

0% yes

no

Most enterprise users still continue to have (98%) desktop PCs for which wireless makes no sense.” The second reason according to Jha is the failure on the part of vendors in positioning the technology as supplementary to office LAN. In this context, a CIO has difficulty in proving the ROI and justifying the benefits for buying and deploying the wireless devices even though the costs are miniscule. Defends Chidambara, senior manager - business development, Convergent Communications (India) Pvt Ltd, which offers networking solutions, “WLANs are not alternatives to Wired LANs. They should be viewed as supplementary or complementary to wired LAN to provide mobility and flexibility especially to those organizations which have a fairly good laptop density and mobile users within its premises.” However, admitted Upender Singh- RSM, North and East, Bangladesh and Nepal, 3Com- a networking solution provider, said, “The concept is growing in India though it is not as momentous. Companies are shying away from adopting wireless in a really big way.” But the big question is why? Speaking about the ground realities, S Thiagaraja Manikandan, head-information technology, Agro Tech Foods Limited, stated, “The reality staring at our face is that in order to become really big in India, wireless infrastructure must be able to replace the existing Ethernet infrastructure.” According to Manikandan, every enterprise today has already wired their building through concealed fast Ethernet cables (with few select cases on fibre too) along with extra provision for future growth. “Remember, this fast Ethernet infrastructure is doing its job well so far. So, where is the large-scale need for disruption immediately?” questions Manikandan. “Fast Ethernet technology is much faster compared to current wireless technologies. Hence, the question of replacing Ethernet is very tough, at least in the short term,” wondered Manikandan. He continued, “I agree on the advantages such as mobility of wireless technologies - but practically most of the corporate staff still use PCs and even the laptop users do not roam around in their premises with laptops in their hands.

Level of Importance of Wireless

32%

34% Low Moderate High

3

34%

This just about explains why wireless penetration is largely limited to few spots like conference rooms, the campus backbone, etc.,” asserted Manikandan. Corroborating his views are the statistics. In terms of importance, 32% rated it as important, while 34% rated it as low and another 34% rated is as moderate on their IT agendas. According to Singh, several factors are preventing enterprises from deploying wireless solutions in a large scale. Wireless has failed to get its due level of importance due to the presence of these factors, the ace factor being the security aspect. We now review each concern raised by the respondents beginning with the prime concernsecurity Security Is An Ace Concern Security without doubt tops the list of concerns, as evident by the numbers. 76% of the respondents rated security as the top concern, while for a meagre 24% security was not high priority.

Is Security A Key Area? 80%

76%

70% 60%

According to Singh, in order to 50% understand the security aspect one needs 40% to be familiar with the nature of 30% deployments. Says Singh, “WLAN is 20% deployed on two different environments; 10% one is a huge deployment on hotspots, where security is not looked upon as a key 0% issue and the second among enterprises for providing mobility among users, where security is looked upon as a prime factor.”

24%

yes

no

However, does opening up of network signals over the airwaves place a company’s network in a very vulnerable position to intrusion and hacking attempts? “Not necessary,” argues Chidambara, “if adequate security mechanisms like MAC address filtering and encryption are put in place, coupled with secure authentication, intrusion is not easy.” “No,” counter argues Ranajoy Punja, vice president, sales and marketing, Cisco Systems, India, “Security options such as Service Set Identifiers (SSIDs), open or shared key authentication and static WEP key offer a rudimentary level of access control and privacy, and at any time each of these can be compromised.”

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Outlining the key components of network security, Punja continued, “Elements such as secure connectivity, threat defense, trust and identity with the capability of infection containment and rouge device isolation should be in a single solution.”

But is security limited to technology alone? “No,” says Manikandan, “There are cultural and discipline angles too. Indian enterprises by and large address security from the external threats perspective. Internal threats are largely ignored and are not monitored closely. And this could be attributed to the "trust based" Indian culture per se. Wireless needs far more internal security discipline too. For e.g., a visitor with a laptop can gain access from internal network inside your premises.” “This would call for additional resources, in terms of manpower, hardware and software. With the extreme cost pressures that CIOs face today, this is a tough call,” admits Manikandan. This leads us to the second concern - cost, which also figures prominently in the CIOs concern list Cost Worries- Are they Real or Imaginary? While most of the respondents we contacted (70%) did mention that the cost factor served as a deterrent to deployment of wireless solutions, 30% however, contented that cost did not matter as such.

Is Cost A Key Concern?

70% 60% 50%

In fact, some respondents who have 40% deployed wireless solutions termed 30% it as extremely cost effective as 20% compared to its wired counterpart. 10% Affirms Sundaram Appan, advisor 0% yes no information technology and CIO of 70% 30% Series1 Power Products Division of Hindustan Motors (HM-PPD), “With better housekeeping, wireless is relatively easy to maintain. And contrary to general perception, it has proved to be very cost-effective for us.” Agrees Dinesh Mundhra, system incharge, Pathways World School who has deployed wireless solutions across its academic campus, “We have saved approximately 50% of the cabling costs.”

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So, what does the actual picture look like? According to Singh, prices have fallen by 80% in the last two years; today even small to medium enterprises can deploy wireless solutions. Agrees Chidambara, “Cost has drastically reduced by five to six times.” Narrating an example Singh stated, “Recently, a very big steel company in India with a huge campus network evaluated both fiber and wireless connectivity and after careful evaluation of both the methods, decided to go wireless due to the cost advantages.” However, apart from costs, respondents cited other pesky wireless-specific constraints such as speed, radio-signal, traffic management, etc. Dhawal Thakker, deputy manager, PwC, bemoans the fact that apart from the above mentioned concerns, technical expertise among solution providers is severely lacking. Says Thakker, “We could even overlook the cost factor, provided adequate and competent technical skill is available.” After addressing the key concerns, we now take a detour and address issues faced by current patrons of wireless solutions Can Mission-Critical Applications Run On WLAN? In terms of the nature of applications deployed, from the 32% who have deployed wireless, surprisingly 44% have deployed mission critical applications such as ERP, CRM, etc. Paradoxically, despite security being a key issue, companies have not hesitated from deploying mission critical applications.

Nature of Apps Deployed on WLAN 56% 44%

60% 50% 40% 30% 20% 10% 0%

Meanwhile, 56% -- to be on the safer side -- have chosen non-mission critical applications such as mailing solutions.

mission critical apps

Non-mission critical apps

Explains Singh, “The reason that mission critical applications are not deployed on wireless connections is because the data throughput is intense and bandwidth limitations prevents companies from deploying such applications.” Punja however feels that WLANs are capable of running all enterprise applications such as ERP, SCM, Billing and Operations applications, provided the network is well-planned and designed. We now briefly compare the various existing protocols used in wireless solutions

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Current Standards In Force 802.11 is a family of specification for wireless local area networks (WLANs) developed by a working group of the Institute of Electrical and Electronics Engineers (IEEE).

There are currently four specifications in the family: 802.11, 802.11a, 802.11b and

Wireless Protocol In Force

802.11g. All four use the Ethernet protocol and CSMA/CA (carrier sense multiple access with collision avoidance) for path sharing.

802.11g 19%

unspecified 31%

31% of the respondents we contacted are using the 802.11b standard (11Mbps). This standard, which supports fewer simultaneous users, uses the same radio signaling frequency- 2.4 GHz as the original 802.11b.

802.11a 19%

802.11b 31%

Says Chidambara, “While the 802.llb standard for indoor applications have been made license free, other standards need a license.” Meanwhile, the 802.11a and 802.11g both command 19% share equally. While 802.11a, which offers bandwidth up to 54Mbps, in a regulated 5 GHz band has the maximum speed, 802.11g is the latest to arrive on the wireless scene. Says Singh, “The 802.11g, supporting 54 Mbps, offers the best of both a and b. i.e. high bandwidth and Wi-Fi (interoperability between vendors). Finally we now take a peek across the emerging trends in wireless spending Allocation of Wireless in the IT budget Despite the inherent issues and concerns, which are yet to be ironed out, corporates are gradually waking up to the benefits of going wireless, though the change may not be as apparent. Allocation of Wireless in IT budget

The numbers speak for themselves. While 68% were unwilling to disclose, 8% of the respondents plan to allocate less than 5% to wireless.

<5% 8% 20% 68%

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4%

5% to 10% > 10% Not willing to disclose

On the upside, 20% of the respondents plan to allocate 5% to 10% of their IT budget to wireless, while 4% plan to allocate more than 10%. According to Singh, huge deployments are occurring in the hospitality industry. Sectors such as hospitals, education, and many media companies too are going wireless. Says Chidambara, “One of the most important aspect of implementing WLAN is good skill sets such as site survey, design engineering, etc. Those vendors who can only trade the boxes may be wrongly positioning the technology.” Approximate Spending next FY In terms of actual spending, while 19% is expected to spend very less on wireless, 6% plan to spend Rs 10-20 lakh. Accounts Jha, “Most of the vendors are promising new version releases with high bandwidth capacity which is holding back CIOs to invest now and compromise later for speed and quality.”

Appx Spending next FY

50% 40% 30%

Meanwhile, 25% plan to shell out Rs 20-30 lakh, while a slim 6% plan to fork out Rs 50 lakh. The remaining 44% shied away from disclosing the budget spend. Justifies Jha, “CIOs are waiting for high speed, best of the breed wireless solution to justify the ROI and business benefit.”

20% 10% 0%

Series1

Very less

10-20 lak hs

19%

6%

20-30 50 Undis lak hs lak hs closed 25%

6%

44%

Agrees Manikandan, “The future scenario looks encouraging - highly secure, faster and cheaper wireless products are emerging. Due to this, wireless will pick up pace in the future.” ”We are already seeing few wireless deployment in India. With the user computing devices shrinking in sizes, yet becoming more powerful through PDAs, sleek laptops, smart phones, etc., which are capable of handling data, internal and external voice, etc., the wireless adoption will see new heights in the future,” predicted Manikandan.

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According to Manikandan, however, this will take at least a couple of years. Though in the future CIOs will surely have wireless as part of their IT strategy in the near future in some cases they could even be modifying their existing IT strategy to accommodate wireless. "I have no doubt wireless is the future and is here to stay,” claimed Manikandan.

So what do today’s CIOs want from providers of wireless solutions? Says Manikandan, “We expect robust, easy to deploy, much more secured, cost-effective and converged/integrated technology from the vendor. Solution providers are expected to clearly define the benefits and the limitations of their product. In other words, they should be transparent.” “Vendors are expected to handhold, educate and provide proactive support to the user community - even after post-implementation. Through this they can mitigate most of our concerns and enable wide-scale wireless adoption,” hopes Manikandan.

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