To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://comment.silicon.com/0,39024711,11030413,00.htm

The Ovum View: The rumble in the wireless applications jungle
Who will win - telecoms or software?

By editorial@silicon.com

Published: Wednesday 16 January 2002

The wireless middleware market has already, in its short life, become a focus for a great deal of industry interest and financial investment. The market, and the technology products it deals in, form a key 'convergence point' between the worlds of the mainstream software industry and the mobile telecommunications industry. Ovum's Neil Ward-Dutton takes a deeper look...

Wireless middleware provides a number of run-time infrastructure and development services necessary to build and deliver next-generation wireless data services for the current and future generations of mobile terminals.

These technology products are key to enabling operators, WASPs (wireless application service providers) and enterprises deliver new data services to consumers and business employees over various types of mobile network - including multiple cellular flavours, WLAN (wireless local area network), Bluetooth and others - cost-effectively.

The basis of the value proposition of wireless middleware platforms is simple and entirely 'horizontal in nature - it is not specific to any particular type of information, user type or industry.

It is this: wireless middleware hides the complexity of delivering services to different mobile computing devices by translating 'under the covers' between network protocols, application protocols, user interface standards, security implementations and so on.

The universe of mobile devices and wireless networks is highly complex and heterogeneous - with each device model/form factor and network type having different features, strengths and weaknesses. Attempting to deliver a data service to a significant population of customers by directly addressing each type of device and network which might be used is very difficult and likely to be prohibitively expensive.

By dealing with complexity and smoothing out the differences between multiple machines, systems, networks and protocols, middleware products ease the job of the software developers who have to extend existing information and application assets out to mobile workers and consumers over cellular networks.

Of course, the value proposition only works if the underlying technology landscape is highly heterogeneous: if a de jure or de facto standard emerges the value of the middleware technology diminishes quickly. Luckily for the wireless middleware suppliers there is little chance of a significant enough degree of standardisation occurring in the immediate future. The window of opportunity for wireless middleware as it exists today will exist for at least five years.

The wireless middleware market is still in the throes of defining itself. This is proving a complex matter because the market represents the convergence of two quite distinct power groups - telecommunications technology suppliers and large software vendors - around a common value proposition.

By coming together in this way, these two communities are also squeezing the market opportunities historically prospected by a number of small start-up vendors - companies like 724 Solutions, Aether Software, AlterEgo Networks, Brience, Synchrologic and w-Technologies. In some cases this new competition, compounded by the downturn and uncertainty in the telecommunications industry, has already driven the small players out of business.

Telecommunications-centric behemoth technology suppliers like Openwave are coming to this market by expanding from their 'home territory' of delivering software infrastructure for delivering simple, relatively static WAP-based (or similar) wireless data services, to address a wide range of applications on a wide range of mobile terminals. In contrast, large software vendors like BEA, IBM, Microsoft, Oracle and Sybase have expanded from their own 'home territory' of supporting internal mobile business applications, to supporting B2C m-commerce services.

In 2000 and through the first half of 2001 the wireless middleware market saw its first major flurry activity as a whole host of small start-ups entered the market - exploiting the gap which existed between the efforts of the big software suppliers and the big telecoms-centric suppliers. The latter half of 2001 saw an initial shakeout, however, and I believe there will be another in 2002 as customers start to demand more from products. Serious deployments will mean that successful platforms will need to get better at providing commercial and operational support functions.

What's more, the big software players will consolidate their initial moves into this market. One or more leading telecoms-centric suppliers will also change the colour of the market by 'moving up the stack' and delivering higher level middleware services. Indeed, Nokia is already looking to do this, using its Open Mobile Architecture initiative as a lever (see http://press.nokia.com/PR/200111/840158_5.html ).

By 2004, the only independent wireless middleware players left in the market will be those who have managed to build enough market share, through both organic growth and mergers and acquisitions, to withstand heavy competitive pressure from the likes of IBM. There will not be room in the market for more than three of these.

Both the large telecoms-centric players and the large software players have size and market power on their side in their fight against the start-up suppliers. As I write this in 2002, however, these two communities are also squaring up against each other. The telecommunications-centric players bring telecoms market and supply-chain expertise as their competitive weapon against the software suppliers. The software suppliers bring knowledge of data applications.

However, the arrival of next-generation data services is likely to change both the structure of the wireless telecoms industry and the nature of applications. Both these communities have some learning to do - and learning to co-operate with each other, rather than blindly wading into competitive waters, is the first step.

For further information see Ovum's advisory services SoftwareArchitectures@Ovum and WirelessInternet@Ovum, or email: info@ovum.com

http://www.ovum.com