Large enterprises willing to pay extra for better indoor cellular coverage

SpiderCloud Wireless comments on an iGR survey of IT managers, which reveals two-thirds would switch mobile carrier for improved indoor coverage, while the majority of large businesses would pay over 30% more per employee for an indoor cellular solution with managed services

Large enterprises willing to pay extra for better indoor cellular coverage

A survey carried out in September and October 2013 by iGR reveals that 56% of IT managers at US companies with 500 or more employees would be willing to pay an increase of between 15% to 30% per employee for improved indoor cellular coverage and capacity. 

Significantly, 92% would be willing to pay an even higher increase if the solution included managed services, such as mobile device management (MDM), context-/location-aware services, Wi-Fi-as-a-service, hosted unified communications (UC) and cloud and/or PBX integration.

Commenting on the findings, Art King, director of enterprise services, SpiderCloud Wireless (pictured above), a provider of scalable small cell enterprise radio access network (E-RAN) systems, said: “Indoor coverage and capacity is an enormous opportunity to attract frustrated mobile business users who demand that their devices are fully functional anywhere/anytime.

“With the freedom of choice granted by BYOD and with cloud services that enable relatively pain free switching, mobile operators who don’t address their customers’ demands may lose them.

He continued: “Further, the need of enterprises to focus their scarce IT resources on creating competitive advantage has forged an opening for forward-looking mobile operators to deepen their customer relationships beyond devices and SIMs.

“As we head further into this decade, well-operationalised services are increasingly necessary due to personnel shortages caused by explosive growth in needs, escalating compensation expenses, and the pace of retirement of today’s tech workers.”

iGR also found that 66% of IT managers would be willing to switch to a different mobile service provider if that carrier could deliver improved in-building coverage. Further, when switching, over 30% of companies would be willing to pay an increase of 1% to a new mobile service provider that offers improved indoor coverage. 

Other findings include:

  • 63% have an official BYOD policy and 14% of businesses have made it an official requirement for users to bring their own device
  • A quarter of businesses are within 18 months of being all-wireless for select segments of their premises
  • UC and MDM as hosted services are the most hotly in demand from enterprises: 29% of businesses are willing to pay between $1 and $19 per employee per month for hosted UC; 20% would sign up at the same cost for hosted MDM.

The iGR survey results support YouGov findings from 2013 where 47% of decision makers surveyed in Britain said they would be interested in mobile device management as an operator service. This leaps to 78% and 77% for Germany and Spain and a massive 89% in the US.

These findings support a recent report by Exact Ventures, Enterprise Mobility Services are Market Opportunity for Mobile Service Providers, which concludes that managed mobility services represent a $100 billion market opportunity for mobile operators, and a saving of 35% a year for enterprises adopting such operator-delivered managed and hosted services.

Iain Gillott, president and founder of iGR, said: “Medium and large companies represent a significant opportunity for small cell solutions, both for vendors and mobile operators. Our research shows that the trend of bring your own device (BYOD) is acting as a driving force behind the need for a better in-building mobile experience.

“It is clear that a high proportion of businesses are now taking official steps to embrace BYOD and are prepared to pay a premium to the operator that can deliver a complete managed service.” 

New go-to-market proposition needed for indoor coverage

However, in an interview with Wireless, SpiderCloud’s Art King noted that most mobile operators are not geared up to providing in-building coverage and managed services.

“Operators need to change their go-to-market methodology to one that is more like the vendor or systems integrator model for selling Wi-Fi,’ he said. “What we might see is a mixed go-to-market model evolving. For example, the enterprise pays for the small cells and installation work and the network pays for the transmission line to the building.”

Enterprises that have paid an operator for mobile phones and network services might be pretty annoyed at having to pay extra for indoor coverage – a service they expect to get anywhere, anytime.

However, King pointed out: “Look at it from the mobile operators’ point of view. They see themselves like the utilities. They can say to enterprises: ok, you have poor cellular coverage within your building, but you occupy buildings that block our signal – whose fault is that? You don’t expect the water company to pay for the plumbing system or your electricity provider to pay for the building wiring, so why do you expect us to pay for your indoor cellular coverage system?”

Who pays for indoor coverage?

The feeling is that enterprises will have to put their hands in the pockets to pay for at least some of the in-building coverage solution – possibly most of it. However, as King notes, CIOs are overwhelmed with too many projects and cannot execute against them because they have too many priorities; and it is high priority business software that eats up the most time and budget. Something like 70% of time and budget goes into running the business and only 30% to innovation.

“The problem is, very few bosses see infrastructure as providing a competitive advantage,’ said King. “The business guys say: we need the transformational software, so what happens is the infrastructure guys are asked to stretch the Wi-Fi system out for another two years – so the struggle for money is tough out there.”

But King thinks this attitude is going to have to change if the future is that the majority of employee devices never see a cable and are all wireless enabled. Enterprises will have to make efficient wireless networks a priority, but if they don’t want the headache of managing them, then there is a solution out there.

Operator managed services

“We think the solution is mobile operator managed services,’ said King. “For large enterprises the way forward is, instead of designing and running a comms solution in-house, design it and then have someone else run it on your behalf.”

SpiderCloud’s present go-to-market strategy is via operators – it is their spectrum it is harnessing after all. “Will a normal systems integrator be able to order the small cell indoor technology and get a transmission line from the operators?” wonders King. “Maybe in the future, but for the time being we are using the operator route.”

King said that enterprises need cellular coverage and capacity in their buildings, so they are asking for help in getting ‘lit up’. And here they hit a pinch point.   “The problem is the lead times, because even before you do the building leasing the mobile operators won’t improve the service until people move in and you can prove you’ve got lots of angry people with no mobile coverage.

Raising the quality bar

“What is good about changing the go-to-market proposition is that it will raise the quality bar,’ he continued. “IT managers just want less problems on their plate, so to get rage issues over poor quality cellular coverage to go away is gold for them. That means a lot of people will write cheques to make the pain go away - if there is an affordable and scalable way to do it.

“Mobile operators and enterprises have some overlap on the technology. They could move a lot of that technology over to the operator and that removes the pain for enterprises and boosts ARPU for the operator, as it is now getting an extra revenue stream from providing a managed service,’ said King.

The rise of mobile devices and BYOD means the power has now moved to the employees and away from IT departments, which can no longer so easily dictate what operating systems and communication tools staff have to use at work. “So, IT is trying to adapt to this power shift and is trying to figure out how to design something that meets that need instead of fighting it,’ said King.

“What hasn’t happened yet, but will, is that a lot of small to medium technologies that have been smashed by mobile apps, such as Post It notes, recorders, cameras - a lot of the technology assigned to a person in the enterprise desktop world at the moment – this will all be replaced by apps in the cloud – a £3 app replaces a £500 desk phone.

“What we need is an acceleration framework to provide some tools to the mobile operator community to help them change their processes – both technically and in their go-to-market proposition – so they can respond quickly and with a cost-effective solution to meet the needs of enterprises,” concluded King.

SpiderCloud’s scalable small cell systems for enterprise

SpiderCloud offers a true multi-access, multi-mode system with 3G, LTE/4G and dual-band Wi-Fi for reliable mobile services indoors for enterprise customers of any size, called an Enterprise Radio Access Network (E-RAN).

The E-RAN system consists of a Services Node (SCSN) (pictured below) that can control over 100 self-organizing and multi-access 3G, Wi-Fi and LTE/4G small cells that can be installed in just days using an enterprise-Ethernet Local Area Network (LAN) as a managed service by a mobile operator’s network.

In addition to providing reliable coverage and capacity, the E-RAN with the Services Node includes an Applications Programming Interface (API). The API inside the Services Node provides trusted connections to the Radio Nodes and a logical view into all devices on the E-RAN, to enable secure services to any mobile device on the network.

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