Wi-Fi Planet: Mixed messages

One speaker predicted that wireless Internet access will have explosive growth, while another group of speakers warned Wi-Fi vendors against taking their companies public at the Wi-Fi Planet Conference and Expo Wednesday.

Attendees at Wi-Fi Planet, in Baltimore this week, seemed to get a mixed message from some of the speakers. Yogesh Gupta, chief technology officer at Computer Associates International Inc., predicted explosive growth for wireless Internet access. He described the not-too-distant future when car manufacturers will be able to diagnose and fix most problems through a wireless software upgrade sent to cars parked in their owners' driveways.

Gupta also used the University of Arkansas at Pine Bluff as an example of how pervasive wireless Internet access can become. The campus of the 3,000-student university is one large wireless hotspot -- students and faculty all have IP (Internet Protocol) phones, security cameras run on the wireless network and campus radio and television stations use the wireless network to broadcast their signals, Gupta said.

"Everything is going to be connected -- it's going to be wireless," he told a crowd of about 100 people. "I believe this whole thing is just going to explode."

Gupta did acknowledge some challenges for wireless technology to gain further traction among consumers. A number of wireless standards, from Wi-Fi and WiMax to competing cell-phone standards, confuse consumers, he said. A number of handheld operating systems also compete for attention, he noted. "This thing is completely out of control," he said. "Vendors are doing a great job of messing things up for users."

In addition, wireless security is "extremely complex," Gupta said. And consumers don't want to enter security keys to get into wireless networks, or have to scan for hotspots, he said. They just want to walk into a building and have their devices connect to a wireless network automatically.

The challenge for wireless providers is to provide security while at the same time providing easy-to-use wireless service, he added.

"(Wireless vendors) should just do this automatically, completely invisible to end users," Gupta said.

In an earlier discussion, panelists including Tom Taulli, a principal at the investment bank Bridgewater Capital Corp., talked about the headaches involved with filing for an initial public offering (IPO) for wireless companies. Interest in IPOs is growing again after the dot-com bust, Taulli said, but public companies have new regulations to deal with since the late '90s, including the Sarbanes-Oxley Act of 2002, an accounting reform law.

Taulli addressed hundreds of people about IPOs at a trade show in 2000, then gave a talk to four people, including an Elvis impersonator, at a trade show in Las Vegas in 2001, he said. About 20 people attended the panel discussion Wednesday. "It'll probably take a couple of years to come back," Taulli said of the IPO market. "Going back to the late '90s of having 20 IPOs a day doesn't seem likely."

Panelists warned the audience that a company with one good product does not make for a good IPO. "First of all you have to have a sustainable business model," said C.P. Shankar, managing director of the Davidson Capital Group LLC. "If it's not, don't even consider an IPO."

The up-front costs of an IPO can be US$2 million or more, Taulli said. For companies trying to raise less than $30 million in an IPO, the risk may not be worth it. He also suggested that technology companies, often with rapidly changing business conditions and highly competitive markets, may not be the best kind of companies to take public. "Realistically speaking, for the next three, four, five years, I don't think IPOs will be the way to go," he said. "I think it'll be M&A (mergers and acquisitions)."

The panelists did acknowledge that successful IPOs can give companies several advantages beyond more cash. Being a public company can give an IT vendor credibility with large customers, and being a public company makes it easier to determine a company's worth, said Stephen Saltzman, director of strategic investments for Intel Capital. Acquisitions between private companies can be difficult because it's tough to determine the worth of the companies, but an IPO can help tech companies determine their worth in a merger, panelists said.

"As a public company, your stock is a currency to do acquisitions," Saltzman said.

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