For Federal Express Ground, IEEE 802.11b isn't just another cryptic technical term. The wireless LAN standard represents "a powerful way of boosting worker efficiency and productivity," says Roman Hlutkowsky, director of operations technology for FedEx Ground, the Pittsburgh-based ground carrier that's North America's second largest for business-to-business small-package deliveries. "A wireless network is a critical link in the technology chain for a mobile organization."

Until recently, few IT leaders would have been caught dead singing the praises of wireless LANs. Although available for more than a decade, wireless LAN products were notorious for being far slower and more expensive than their wire-bound counterparts. IEEE 802.11b changed all that. The standard, ratified in late 1999, lets data fly through the air at Ethernet-level speeds: up to 11Mbps (though real-world speeds are often half that, thanks to various forms of electrical and physical interference, such as mobile phone signals and cubicle walls). In early 2000, major networking vendors such as Cisco Systems and Lucent Technologies, plus a host of smaller companies, quickly jumped on IEEE 802.11b. Equipment prices subsequently fell and popularity soared. Now FedEx Ground and a growing number of other organizations are discovering that wireless LAN technology can not only replace wired LANs but also expand the very concept of local networks.

As word of wireless LAN technology's newfound vigor spreads, sales are growing rapidly. According to Phillips InfoTech, a technology market research company in Parsippany, N.J., industry revenues will climb from US$300 million in 1999 to US$1.7 billion in 2004. "Companies with people who work in warehouses, on factory floors and in other nonoffice settings have found wireless LANs to be particularly useful," says Shelly Tyler, a Phillips InfoTech senior analyst. The technology also appeals to organizations that need to create a LAN but don't want to tear up an office to install cabling.

Yet as wireless LAN sales take off, some observers worry that the technology could become a victim of its own success. Signal interference, security concerns and confusing new standards could emerge to once again dampen enthusiasm. "Despite some claims to the contrary, the wireless LAN puzzle hasn't yet been completed," says Tyler. "But there's certainly been a great start."

More Mobility

FedEx Ground is taking advantage of that start by expediting the movement of shipping information from delivery workers' terminals to a central database. Wireless LAN technology lets FedEx Ground give its customers faster delivery confirmations, including signed proof of delivery. Last fall, the company began deploying wireless LANs at each of its more than 400 local pickup and delivery centers as part of an US$80 million technology upgrade project. As the vans return home, the LAN automatically moves package data from drivers' portable computers to the database.

FedEx Ground's wireless LAN, supplied by Holtsville, N.Y.-based Symbol Technologies, cost about 20 percent more than an equivalent wired LAN that would have required workers to insert their portable devices into a docking unit. But Hlutkowsky says the added expense has been more than offset by gains in efficiency and productivity. "With a wireless LAN, workers don't have to move away from their work in order to upload information; they can access the network from wherever the work-such as package loading and unloading-is being performed," he says.

Public Places

Wireless LANs are also helping to redefine local networking by allowing organizations to create environments that automatically link portable devices, such as notebook computers, personal digital assistants and Web-enabled mobile phones, into an onsite wireless LAN. Seattle-based coffee retailer Starbucks, for example, recently teamed with Microsoft and Richardson, Texas-based network services provider MobileStar to create wireless environments in 70 percent of its 3,000 North American corporate stores. The technology will allow java sippers to zap messages and files to each other and to access broadband content and services.

But Starbucks' foray into wireless technology is old news to Aaron Ruggaber, director of purchasing for the Penticton Lakeside Resort and Casino in Penticton, British Columbia. Penticton Lakeside has been offering its guests a wireless network environment since mid-2000. When guests check in to the resort, they get more than just a room key: They also have the choice of receiving a wireless network PC card and accompanying client software that can be integrated into a notebook computer or other mobile device. The service is priced at US$15 (Canadian) per day for unlimited use. "People now expect to have high-speed Internet access wherever they are," says Ruggaber. "If you're in the hospitality field, you have to be able to offer people the services they want."

Since the resort regularly hosts conventions, the wireless network eliminates the need to install temporary telephone lines for dial-up connections. The Lucent ORiNOCO wireless technology also did away with the need for facility renovations that would have taken several months to complete. "The wireless network was up and running in just a few days with little disruption to the hotel's regular routine," says Ruggaber. A total of 10 antennas and access servers provide blanket coverage throughout the resort. Broadband Internet access is delivered to the LAN via a satellite link.

Guest response to the wireless environment has been positive and enthusiastic, Ruggaber says. "Our first major test of the technology was during a medical supply company meeting. The client signed to return the next year, largely because they were so impressed with our wireless LAN."

Jammed Channels

But there are problems to overcome. As more organizations climb aboard the wireless LAN bandwagon, signal interference problems are becoming a major headache. Not only can networks sometimes interfere with each other (a problem in crowded office buildings), but IEEE 802.11b's spectrum turf, the unregulated 2.4GHz band, is home to everything from cordless phones to wireless audio speakers to consumer TV video extenders. "Many wireless LAN users think their system works wonderfully-until someone in the next office decides to microwave a muffin," says Gemma Paulo, an analyst with Cahners In-Stat Group, a technology market research company in Scottsdale, Ariz.

IEEE 802.11b's lax approach to security also causes many potential adopters-particularly those involved in financial or government activities-to gulp twice before cutting the network wires. "Wireless LAN technology was designed to be open, and that may also be its biggest shortcoming," says Jarad Carleton, an analyst with technology market research company Frost & Sullivan in San Jose, Calif. Tapping into a wireless LAN data stream can be as easy as driving into a company's parking lot and turning on a laptop computer. Although encryption will safeguard information from casual eavesdroppers, using it slows network performance-and serious snoops can still intercept and deconstruct data. "Wireless signals, by their nature, don't respect property boundaries," says Carleton. "With a wireless LAN, you just don't have the simple protection of keeping your data stream contained inside a physical wire, and that's a situation that will never be changed."

New Standards

Although IEEE 802.11b brought wireless LANs out of the wilderness, new standards are arriving to provide even better performance. The recently ratified IEEE 802.11a, for example, operates at speeds of up to 54Mbps, allowing wireless LANs to accommodate heavier, multimedia-rich traffic loads. The standard should also go a long way toward relieving interference problems because it uses the less congested 5GHz band allocation as well as an improved frequency division multiplexing (FDM) transmission technology. (FDM transmits multiple signals simultaneously over a single transmission path.) The first IEEE 802.11a products are expected to arrive late this year at prices slightly higher than current wireless equipment.

Meanwhile in Europe, a non-IEEE initiative-HiperLAN/2-is generating considerable interest. Backed by telecom heavyweights Ericsson and Nokia, HiperLAN/2 uses a different networking architecture than IEEE 802.11a, yet it is similar in that it also tops out at 54Mbps, uses the 5GHz band and relies on frequency division multiplexing. For wireless LAN adopters, HiperLAN/2's biggest drawing card is its strong security attributes, including built-in encryption and authentication capabilities. Still, HiperLAN/2 and IEEE 802.11a have so many similarities that some wireless industry leaders are predicting that the standards will someday unify, though "that's just speculation right now," says Paulo. Yet he notes that even without a formal convergence, it's likely that many vendors will begin producing equipment that's compatible with both standards in order to meet the needs of a global market.

A global marketing strategy will soon become imperative for wireless LAN vendors, given the technology's rapidly growing popularity. "We're moving to a world where LANs will be just about everywhere," says Paulo. "In the past, people have thought of LANs as an office technology. But in the years to come, thanks to wireless you'll see LANs in homes, stores, conference rooms, hotels, airplanes-any place people meet."