Managing the Wi-Fi Experience

The patchwork of paid Wi-Fi hotspots is infuriating. Making Wi-Fi a free "amenity" may alleviate that, and managing those amenities could mean big bucks.

By Rafe Needleman, Business2.0

Want to get some work done at an out-of-town Starbucks ? T-Mobile will sell you a monthly pass to its access points, which are also in a few airports, such as San Francisco International. But other airports use other services, and your hotel might use yet another service. Last week I grudgingly paid for access on two different systems at two different hotels — and that’s on top of my T-Mobile Wi-Fi service fees.

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FAST FACTS

Eleven Wireless

http://www.elevenwireless.com
CEO
Josh Friedman

HQ
Portland, OR

FOUNDED
2002

EMPLOYEES
10

FUNDING
Raising funds now

PROFITABLE?
Projected for Q3 2004

MARKET
Wireless local area network management software

FAST FACTS

Bluesocket

http://www.bluesocket.com

CEO
Eric Janszen, former managing director, Osborn Capital

HQ
Burlington, MA

FOUNDED
2000

EMPLOYEES
60

FUNDING
$32 million, in three rounds

PROFITABLE?
Anticipated by 2005

MARKET

Wireless LAN management hardware and software

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This is infuriating and expensive, but there’s a change afoot that might alleviate the hassle: the idea of Wi-Fi as an amenity, like air-conditioning. The biggest news in this arena is the McDonald’s (MCD) experiment. Fast-food joints across the country are installing Wi-Fi access points. Most are free: Get a Big Mac and get connected.

I believe that Wi-Fi hotspot access will change so that if you can get in the door, you’ll be able to connect. I also expect that eventually the cellular companies and Internet service providers will blanket areas larger than coffee shops with Wi-Fi — business districts that encompass dozens of stores and other gathering places are good candidates — and will allow roaming to and from each other’s networks.

Both of these visions of the Wi-Fi infrastructure could become real — and could overlap. Many of the physical access points that make up one network could also serve another. The problem? Billing and management. For example, if you’re in a hotel room, one can assume that you are a paying guest and should be allowed free Wi-Fi access. But what if you’re in the lobby? Do you still get the amenity of Wi-Fi, or do you get charged by either your ISP or the hotel?

This confusing situation represents a great opportunity for businesses in Wi-Fi management, and this arena is getting crowded already, with many companies angling for a piece of the action. I met Josh Friedman, the CEO of one such company, Eleven Wireless, in a non-Wi-Fi-equipped coffee shop last week. Friedman started his business as a wireless Internet service provider in Portland, Ore., where his system is still serving hotels. The management software he built for his WISP can handle many of the complexities of the emerging, conflicting Wi-Fi infrastructures. For example, the software can connect to a hotel’s management system to allow a guest’s laptop free access to the system — but only until the guest checks out (then access reverts to the paid model).

Even simple free access isn’t necessarily easy to set up. Last week at the AlwaysOn conference, for example, the "always-on" free Wi-Fi that tech conferencegoers have become accustomed to was buggy the first day of the show: Users were sometimes unable to connect or were randomly dropped off the network. VisiCalc founding father Bob Frankston turned red with frustration when he was dumped from the live online chat he was having in the auditorium. On the second day of the show, a team from Bluesocket swooped in and installed one of its wireless gateways between the access points and the Internet, making the system more reliable (and winning at least one customer on the spot).

Considering the rapidly growing and shifting landscape of Wi-Fi access and the large number of clever businesses trying to enter the market, it will take a lot for a small company like Eleven Wireless to grow from its WISP roots. Bluesocket, which deals with another piece of the Wi-Fi puzzle, already has a sizable customer base. Now is certainly the time to expand these companies. Eventually there will be a large consolidation of Wi-Fi management companies — we’re already seeing this with Wi-Fi access-point manufacturers — and companies with technology and experience handling the unique complexities of Wi-Fi management may be picked up for a nice chunk of change.

-Rafe Needleman

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