Wireless network integrator, Simply Wireless, is on the brink of insolvency after failing to raise sufficient funds to support the business.
The privately-owned Australian company entered into voluntary administration (VA) on July 30, citing slow local adoption of wireless technology as the main reaon for its mediocre balance sheet.
Simply Wireless founder and CEO, Desmond O'Geran, said while a lot of Australian companies were beginning to invest in wireless, initial deployments were small.
"We've seen a lot of single access point deployments this year," he said. "I can tell you no one in wireless is making a cent."
O'Geran said he had been looking for an equity partner for the past 15 months, but found it difficult to secure funding. He attributed this lack of financial support to staggered deployment of wireless LAN services in Australia.
"We're about 18 months behind the US for adoption," he said.
"While it's going well, enterprise wireless LAN deployments in Australia are really slow.
"For IT managers, the benefits of wireless are the most difficult to quantify," he said. "And in today's corporate environment, you have to justify all IT decisions."
Simply Wireless provides a range of wireless network technologies including Wi-Fi, wireless LAN and mobile offerings. The company will continue to trade while under administration.
O'Geran said Simply Wireless had also suffered from the high costs of educating the market about the benefits of wireless solutions. Meta Group analyst, Bjarne Munch, agreed adoption of wireless services in the corporate environment would not take off until at least 2005.
"There are concerns for the larger corporate market which makes them reluctant to adopt wireless today," he said. "Security is still a big concern, as is integration of wireless technologies."
While security standards for wireless had been ratified, there were still several aspects of wireless that had not yet been, and might not ever be, standardised, he said. For example, authentication protocols being used by vendors differed, leaving a complicated mix for customers to manage.
"You need an integrator to align all of these [protocols]," he said. "Otherwise you have to lock into a proprietary set-up, which many corporates don't want to do."
3Com A/NZ channel director, Simon Edwards, said the vendor expected wireless to take off in its fiscal 2005/06 year. Currently, wireless products represented 15 per cent of the company's total revenue.
"We've found wireless is a growing market, and the technology is gaining acceptance... but the market hasn't developed as quickly as many might have expected," he said.
Munch said he was also certain the local wireless take-up would flourish, once more managed solutions were developed.
"Once we have those in place, corporates will be more interested in wireless," he said.
Integrity Data Systems chief, Ross Chiswell, said there were many opportunities for the channel to provide such services. "The channel can develop a consulting approach to managing shared wireless networks," he said. "They need to look at who uses wireless and what they're using it for - the channel could provide solutions on bandwidth management, or the design of a wireless network."
Chiswell said Australian corporates had been reluctant to subscribe to wireless technology to date, but suggested vendors were also delaying the release of products.
"Enterprises, in particular, have several issues relating to security which have delayed broader adoption," he said. "But some have been due to the vendor's product cycle. Many have been waiting around for the vendor to tell them what they want to hear."
The channel was also responsible for explaining wireless security and network management to clients, Chiswell said. "For example, there are products out there which monitor and alert users to potential wireless attacks, but a lot of the channel is not aware of such solutions," he said. "Instead, they choose to follow branding, rather than being innovative and finding things to fix the customer's problem.
"The market stalls as a result because people are waiting for the big vendor's products, initiatives and so on."
Chiswell said it would be a shame to see a wireless niche provider like Simply Wireless exit the market.
"It's the small integrators that tend to be more creative," he said.
O'Geran said the company had received about 30 expressions of interest via administrators Deloitte since the VA was announced.
"We have got six or seven parties talking to us at different levels of seriousness," he said. "It's not a great thing to be under VA but companies do get out of this situation quite often. We are hoping to be under the wing of a larger company at the end of this."