Blowing Mobile

Everyone agrees the future of global business is mobile, but America has a lot of catching up to do when it comes to adopting mobile devices and strategies.

When Fidelity's Joseph Ferra imagines how U.S. customers will do business with the investment services giant in the not-so-distant future, he has no doubt that most will be doing it through a mobile device. As the company's chief wireless officer, he's naturally bullish about mobile services.

And with good reason: Worldwide research and Fidelity's own data show the number of mobile users and devices—such as cell phones, smart phones and handhelds—are exploding. Market researcher In-Stat reported more than 2.6 billion mobile subscribers worldwide in 2006; according to the 451 Group, several vendors estimate there are some 600 million global mobile office users.

Fidelity itself has more than 1 million U.S. customers wirelessly accessing Web-based tools through its Fidelity Anywhere product, allowing customers to receive market data (including real-time stock quotes or alerts), access their 401(k) accounts, make trades or check portfolio balances, among other things. "And people want to do more," Ferra says. "'I do this on Fidelity.com,' they say. 'I want to do this on my mobile device.'"

In the United States, Fidelity is at the forefront of mobile device use because it has incorporated mobile-specific design and functionality into its Web-based products since 1998. "We got in this space very early," says Ferra. Fidelity has also created a device-agnostic environment: BlackBerry 8800, Motorola cell phone, HP PDA, even the iPhone—all are welcomed by Ferra's systems.

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That's not to say there haven't been speed bumps. Early on, mobile customers "were typing in Fidelity.com, and they were just getting the upper left corner on their screen," Ferra recalls. "That's not a great user experience."

That problem has been fixed, but when it comes to serving mobile users, most U.S. companies "have been able to get away with miserably designed software applications," says Web usability expert Jakob Nielsen, a principal of the Nielsen Norman Group.

In fact, when it comes to mobile devices, mobile services and the infrastructures that support them, the United States trails the rest of the world. And that may cause trouble—big trouble—for American business in the not-too-distant future.

Why We're Out of Step

BlackBerry addicts aside, corporate America's lack of enthusiasm for mobile stands in stark distinction to the rest of the developed world, particularly Japan, India, South Korea and most of Europe.

"I hesitate to call the U.S. a laggard, but it's a different cultural environment," says Bill Hughes, a principal analyst at In-Stat. In Asia, for example, companies aren't overly concerned when their employees bring mobile devices into the workplace. It's just a part of the mobile device culture, says Tony Rizzo, research director of mobile technology at the 451 Group. "There's very little enterprise control," he says, "especially not from the top down."

In the United States, however, security-conscious CIOs have tried to keep device proliferation and network vulnerabilities in check by limiting which devices can access corporate networks.

Those differences in culture and adoption may become more, not less pronounced in the future. By 2009 more people on the Asian continent will have made their first phone call on a mobile device than on a land line; by 2010, more of those same people will initally access the Internet on a mobile device and not a PC, says Scott Cooper, senior vice president of mobility for Nokia Enterprise Solutions.

"In India and China, they completely skipped the wired Internet," Cooper says.

If America wants to do business in Asia (and, of course, it does), it will have to go mobile, and savvy U.S. CIOs recognize that. They understand that the global business is a mobile one.

But for CIOs, getting to that future involves multiple challenges. On the customer-facing side, they need to design products and services tailored to the mobile world, and enable new kinds of connections (such as text messaging and video) to their constituents.

On the internal user front, CIOs need to overcome security concerns, figure out how to manage a plethora of devices, reduce exorbitant wireless costs, manage integration and business continuity challenges between wireless and HQ networks and prepare for new user demands such as unified messaging. ("Consumers are driving enterprises to adapt to and adopt mobile technologies," says Rizzo. "And in that way, mobility in the enterprise is really following consumers.") IDC (a sister company to CIO's publisher) estimates that by 2009, 878 million workers will be accessing corporate networks via a rainbow of mobile devices, and uploading and downloading a mix of data, voice and video.

Doing all this won't be easy, but as Fidelity's Ferra notes, there's not really much choice. Companies will have to offer lots of mobile options to their customers and users if they expect to remain competitive. "Once customers get hooked [on mobility]," Ferra says, "it becomes contagious."

The question for CIOs, therefore, is not if they should make their enterprises mobile-ready, but when. And how.

A BlackBerry Doesn't Make You Mobile

The seeds of mobile business were planted in the 1980s with the appearance of large cellular radio phones used mainly by the rich and famous (think of Gordon Gekko on the beach in 1987's Wall Street). Cell phones started shrinking just as 20-pound laptops entered the market in the 1990s—the next status symbol for the corporate elite. As mobile phones and laptops kept slimming down, the BlackBerry blew in from Canada in 1999.

The CrackBerry's sticky and addictive nature, its ease of integration on the back end and its robust security features contribute to its meteoric rise (9 million users and counting). "Businesspeople see it as a requirement just as they do a desk phone," boasts Mike Lazaridis, president and co-CEO of Research In Motion, BlackBerry's maker. But not everyone saw the BlackBerry's potential in the early days.

"I was the first in my firm to have a BlackBerry," says Steven Sommer, CIO and CTO of law firm Hughes Hubbard & Reed, which has 330 lawyers worldwide. "I tried to give one to my boss, and he said, 'Get out of here. I want to carry around my 20-pound laptop.'"

A 2007 Economist Intelligence survey of 532 global executives (more than 80 percent from outside the United States) found that the top mobile device inside their companies was a conventional mobile phone (62 percent). Lagging in second place was a Wi-Fi-enabled laptop at 44 percent. The survey suggests that the mobile phone is king and the way in which international business "gets done."

In the United States, however, the laptop is still considered essential. "I would like nothing better than to not have to carry my laptop [on business trips]," says Steven McIntosh, senior vice president and CIO at Jackson Enterprises, which has 20 wineries worldwide. Like many businesspeople, he uses his PDA whenever possible, but connectivity issues mean he carries his laptop as a backup.

The laptop flourished in the United States in part because it cost less here than in other parts of the world. Ten years ago, laptop prices in Europe were double the U.S. price. Mobile phones emerged as a way of life in Europe and Asia because they were much cheaper and demand for service pushed those countries—which were less geographically dispersed than the United States and easier to blanket with wireless signals—to invest heavily in their mobile networks.

In addition, since Asians typically spend one to three hours per day commuting to and from work on a bus or train, a big laptop is impractical, says Brian Bonner, CIO of Texas Instruments, which has operations in Asia and Europe. Bonner points out that devices such as Nokia's N95 offer Asian users e-mail and music services, DVD-like video, a 5 megapixel camera and support for Web browsing and GPS mapping, "all in one device."

But Stateside, by not provisioning their workers with integrated mobile devices—and by not managing or standardizing them—business has created a culture of mobility in multiples: Overburdened knowledge workers may carry a laptop, cell phone, PDA, MP3 player and digital camera at the same time. Which raises the question: How untethered are you if, on a business trip, you have to lug a laptop, have your BlackBerry in hand, a mobile phone attached to your belt and whatever other device you might need?

In the United States, the typical corporate "policy" has been: "Let the employees buy their own phones and use their business judgment, and we'll reimburse them for their itemized business calls."

"I like to say that they're pursuing a strategy of trying to save money no matter how much it costs," says In-Stat's Hughes. His recent report signaled a dangerous inflection point if wireless mismanagement continues: U.S. corporate spending on wireless voice and mobile data services will exceed spending on all wired voice and data services by 2010.

Devices at I.T.’s Door

Knowledge workers are eyeing more multimedia-capable devices. Here’s the skinny.

Enterprise strengths Enterprise weaknesses Wireless carrier/Price
Apple iPhone Lots of multimedia functionality all in one device; GSM- and Wi-Fi-ready; touch keyboard Security concerns; cost; touch screen is made of glass AT&T; $499, $599 (depending on model)
BlackBerry Curve 8300 Multimedia features (audio and video); user familiarity with RIM; IT policies can be hardwired into each device; full qwerty keyboard No support for 3G services and Wi-Fi; no GPS ­capabilities AT&T; $199.99
Motorola Q Windows Mobile 5.0; EV-DO; full qwerty keyboard; all-digital network; removable memory card slot No Wi-Fi integration Sprint and Verizon Wireless; $99.99 and $174.99 (respectively)
Samsung BlackJack Windows Mobile 5.0; full qwerty keyboard; simultaneous voice and data capabilities; 3G-ready No Wi-Fi integration; tight design and some navigation issues AT&T; $74.99
Palm Treo 750 Windows Mobile 5.0; full qwerty keyboard; simultaneous voice and data capabilities; 3G-ready Short battery life concerns; non-MS Exchange shops can have setup headaches AT&T; $199.99
SOURCES: Company websites; CIO.com device reviews (www.cio.com/article/106306); CIO reporting

The Problem With Your Carrier

For most U.S. businesspeople and consumers, the difficulty of simply making the wireless connection with each other and the home office network has been a significant and limiting factor of mobile adoption. In this sense, the wireless carriers have been the elephant in the mobile room.

Most of the frustration with carriers stems from three areas: inconsistent networking standards among competitors, the two-year customer lock-in agreement (which is unique to the United States), and the slower speeds and smaller bandwidth connections on those networks. "Mobile networks are incredibly bad in the United States compared with Europe and the more advanced countries in Asia," says Nielsen.

In Japan, for example, they're pushing fourth generation (or 4G) speeds, says the 451 Group's Rizzo. "But here in the U.S., we're patting ourselves on the back for 3G."

It's a different story in most of Asia, Rizzo says. There, demand for new devices and the latest content has fostered better, faster networks as well as new types of service providers. Hughes Hubbard & Reed's Sommer hears about the differences between U.S. and Japanese wireless technology from the firm's Japanese attorneys. "Their screens are always better than ours," he says. "And the phones are so fast."

Until recently, there hasn't been as much demand in the United States for multimedia mobile services, so the carriers haven't been as quick to upgrade networks and service offerings.

Businesses have also been lukewarm to partnering with the mobile operators. "In the U.S., enterprises hate the carriers," says Rizzo. "They think that the wireless carriers and land line carriers are nothing more than dumb pipes."

But change is on the horizon. Early this year, Verizon Wireless launched its EV-DO (or Evolution-Data Optimized) 3G service, which delivers data and multimedia services at much faster speeds than before. Other wireless carriers have followed suit and increased their network capabilities (although not to all areas of the country). According to Rizzo, there's been a noticeable uptake in demand for EV-DO-enabled services from consumers but also from enterprises.

But even with all of the latest bells and whistles, "dead zones" in U.S. mobile coverage areas and dropped calls are still pervasive. "It's not that Americans are less mobile than anyone else," explains Nielsen. "But even now, with just making a cell phone call, we don't have a stable resource. And that one thing explains it all."

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