Made to Order

A market for specialized wireless solutions to business problems is proliferating: Companies with field forces and in vertical markets like health care can leverage a dizzying array of mobile applications to improve productivity and digitize the paper trail.

Increasingly, businesses are relying on VARs and consultants to bring applications to the table, slice through the complexity, integrate mobility with the existing network and manage all the devices. As this solutions-driven business market heats up, carriers, vendors and wireless distributors have taken notice of what the indirect channel brings to the table.

There is now a strategy shift for many companies in the wireless space, says Steve Rowley, vice president of sales, Indirect Channel, for Sprint Corp. Before, they would focus on the individual user, and now its the enterprise in the crosshairs, with smart devices. In the VAR space, valueadded services and advanced applications are hot. Vertical solutions, especially in the health care space, enable mobility and are proving very sticky. Its one thing with a voice account, its another to switch if you have this highly specialized application running on these phones. And VARs can actually create applications and solutions for them.

While the retail channel is still a focus for distributor Brightpoint, its enterprise-oriented Advanced Wireless Services (AWS) division is working with more VARs, consultants and integrators as converged devices and emerging technologies mature.

Businesses can customize wireless form applications via a portal and wizard at the AirMobility.Net Portal.

Through us, they make margin on products and accessories, and have subagent agreements for wireless service, where they make commissions on the activations, says Dave Brown, senior vice president of AWS at Brightpoint Inc. When they go in to an account, they can easily prove an ROI with horizontal or vertical applications. And that means they can perform IT integration so that the devices become a part of the overall network design. Theres certainly a professional services element.

Brightpoint bundles applications for the VAR space, through agreements with companies like Microsoft Corp. who are interested in entering the mobility space. Of the 16.5 million devices handled by the distributor in the United States last year, two-thirds of them received some type of customization. The phones are specific to individual needs; we set up e-mail and load the appropriate applications, such as CRM for field sales, says Brown.

The applications drive a need for integration with the data network. The opportunity is for high-end devices, like Treos, Blackberries and other smart phones, says Bob Reed, director of operations and business development at Nexlink Communications, a VAR with agent agreements with Cingular Wireless, Verizon Communications Inc. and Nextel (now merged with Sprint). He says one sweet spot for the VAR value proposition is the 100-users-or-less marketplace. These are companies that are very interested in having a more mobile, more efficient workforce, he explains. Anyone can sell a cell phone. We are interested in solving business problems.

One device carries access to the home servers, contacts, applications, calendars, e-mail and voice in one place. As such, there are a number of issues that may come up with the network. Extending the desktop out to mobile devices may involve reconfiguring Outlook, connecting to backend databases, securing the endpoints and more. Often we lead with devices, but it leads to opportunities with the server, says Reed. By partnering with a Microsoft Gold Certified partner, we can cover everything from the device to the desktop, desktop to server.

Bringing specialized applications to the table is more than a way to spur add-on revenue; its also an important differentiator in the market. Theres very little strategy going on in the wireless space; the typical salesperson will try to sell phones on the basis of customer service, phone features and price, says Alan Gould, president and CEO at Westlake Software Inc., an integrator. VARs can consult on the phones but are still very computer-centric, and they can help with managing wireless assets to the table, he adds. And with applications like ours, they can offer $100,000 in custom development for $30 per phone, per month.

Westlake has developed AirMobility.Net Wireless Middleware, which automates wireless data collection for field-force automation, sales-force automation, wireless supply-chain management and wireless customer-relationship management. It supports fully customizable wireless fieldform conversion, wireless data collection to a private extranet, wireless data formatting, data routing and migration, back-office integration, creating and monitoring triggers, thresholds and conditions, archiving, analysis, assessment and field-performance measures.

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Brightpoint takes a soup-to-nuts approach to business sales.

Gould says businesses with field forces can eliminate hard forms and instead use wireless devices to fill in fields, or can create barcode applications. The data then is sent to the Westlake server, which supports XML for easy data export and tie-ins with other back-end systems. The AirMobility client software sits on a Java-enabled Blackberry or Motorola phone, and to customize it, businesses with no programming experience can go to a Web site and use a wizard to create fields and forms.

Sales reps will be able to introduce a new way to conduct business early in the sales cycle, says Gould. Its not a situation where you have to run a trial and create prototypes. The VAR can say, you have 100 people in the field, and let me show you, right now, a different way of doing business.

Customization for businesses also can include content. Most people think theyre limited to whats provided on the carrier network, but VARs can find third-party content and bring it to the table, says Brown. So eventually they will have devices designed for certain segments, and specific content loaded on.

Integrating Wi-Fi into the mix is another potential conversation for a VAR. For vertical markets and smaller enterprises, 40 percent have deployed wireless data, and the applications vary, says Allyn Hall, director of wireless research at research firm In-Stat. There also is a strong preference for Wi-Fi-cellular dual-mode systems. Connectivity with cellular is still a bit spotty, and its not as fast, and the in-building coverage is not as good. So theres a real opportunity to put in dual offers.

More converged devices coming to market has enabled the applications explosion, as businesses and institutions are taking full advantage of the migration of workflow to the field, away from the central workplace. We try to deliver differentiated products that will enable an organization to mobilize their applications, says Tara Griffin, vice president of enterprise sales at Palm Inc., maker of PDAs and smart phones, like the Treo line. The smart phone can harness high-speed networks to offer phone and computing functionality with ease of use.

Palm has software partners for some applications, and also has created some of its own. A new application called Traffic provides traffic information for drivers, including trouble spots and alternate routes. Other applications include synchronization, storage, data organization, solutions for securing assets, auto-tracking and applications specific to real estate or health care. E-mail is a given and you have to do that well, but this is also a true computing platform and you should use it as such, says Griffin. The other enabler is the evolution of carrier networks, which allows richer information to be sent more quickly. Eventually in communications, a handheld computer will be an essential part of our daily lives. Something like the Treo, a software-rich mobile device in the right form factor, can quickly become something you cant live without.

The device manufacturer is building out indirect sales channels, including the VAR channel, to go after the high-end opportunity. The goal is to tap as many VARs and integrators as possible to spread the mobility message. Palm provides training, people out in the field to do joint sales calls, and more.

There are thousands of VARs out there interested in solving customer problems with a solution that is more than a phone, says Griffin. They are selling a portfolio of solutions to the end user. The business has changed because the growth in converged devices is tremendous. Mobility started with voice and simple text, then SMS was added, then e-mail and browsing, and now advanced applications. Video will be next. Without a VAR involved, companies are left going to a store or hitting a Web site to figure out how to add mobility on their own, which often requires them to add a pool of business resources to support it and to build out applications.

Further, replacement devices account for more than half of overall sales, says Brown, as users seek phones with more space, power or features. More high-tech phones means more complexity, and an opportunity for a VAR. The goal is to provide a knowledge base for the customers in how to use the device and get value out of them, and that includes device management, says Brown. They should be seen as small computers that need to be managed more like an asset. The database to track assets, applications, security and data will be an important need in businesses going forward.

The rise in customized applications also may create a better compensation situation for partners, who typically are paid onetime, upfront commissions. There is perhaps a sense that while a commission for a sale may be well-earned, customer retention is mostly a function of the carrier although to be sure, exceptions to this rule are plentiful, says Hall, who reports that 40 percent of wireless sales in the United States comes through indirect sales channels, including VARs, retail distributors and kiosks. Nextel [now part of Sprint] is the only major player In-Stat is aware of who has not tried to pull back on recurring revenue payouts. That may change, he notes, as VARs become more prominent in the market. Three men and a truck selling sales-force automation to SMBs locally is on the rise, says Hall. And they will go with the most desirable operator to work with, which could spur more recognition and better commission plans. The specialty channel is a tough business to be in. Resellers get a lack of appreciation, and phone support and help is variable on a local level.

At Sprint, compensation depends on what is being sold, but there is a mix of upfront and residual commissions. The channel is a focus for us going forward, and were only at the tip of the iceberg, says Rowley. We have formalized the channel in terms of our overall go-to-market strategy, and it will be a significant part of our business going forward.

Reed acknowledges that the general lack of residual commission can be a challenge, but says focusing on solutions enables long-term success through referrals and add-ons like third-party applications. For AirMobility.Net, VARs set the end-user cost, and Westlakes referral program receives three months of the recurring fee as a one-time commission a typical scenario for third-party applications. If there are 100 field techs, and the VAR charges $30 per user, per month, he or she would receive a $9,000 upfront commission.

The increasing complexity involved in the wireless business world will prove a boon to channel partners who can put together the whole picture in a specialized way, says Brown. This is going to be a very exciting space going forward.

Brightpoint Inc.
Cingular Wireless
Microsoft Corp.
Nexlink Communications
Nextel Communications Inc.
Palm Inc.
Sprint Corp.
Verizon Communications Inc.
Westlake Software Inc.

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