Making wireless networks more secure is critical to growth of federal and commercial use.
One of the key factors inhibiting the growth of the wireless fidelity market is security. The attractive wireless technology that offers a wide range of applications also is generating a wave of uncertainty about the fidelity of its connectivity.
Security concerns limit growth of the enterprise wireless fidelity (Wi-Fi) market for two primary reasons. Companies and government agencies want to make sure neither hackers nor unauthorized users gain access to sensitive data such as social security numbers, bank and stock account balances and transfers, tax returns, medical records and human resources files. At the same time, many large corporations still must contend with tight budgets for any type of information technology purchase, even one that can replace wired local area networks (LANs) with gear that is easy to install and maintain and that also can knock two-thirds off the cost when compared to its wired counterpart. Citing security concerns gives information technology managers another reason to delay wireless deployment, industry observers say.
“We are out there talking to clients all the time, and the number one concern they cite is security,” says Eric Carr, an analyst with Incode Telecom, a wireless consultancy in San Diego. “They’ve all heard stories about how some hacker using a Pringles can for an antenna hacked into the company system. When you start looking at financial services and government, they are much more security-oriented. It’s much more of an issue for them. They have a lot of sensitive data to protect.”
One company, a privately held startup located on the outskirts of Tampa, Florida, focuses on security as a prime gateway into the enterprise Wi-Fi market. Fortress Technologies may have found the industry’s sweet spot. Following a company restructuring and fresh infusion of cash last year, company executives decided to focus on establishing secure links for federal agencies that need a wireless LAN.
Analysts say it could be a highly lucrative niche as hundreds of government agencies gear up for broadband access without all those cumbersome cables. No one seems to have solid estimates for the size of the government market, but the overall Wi-Fi sector had sales last year approaching $2 billion, a figure that could skyrocket to $8 billion by the end of 2007, industry analysts say.
So far, Fortress is ahead in the game. The company already ranks as the leading supplier of wireless security solutions for the U.S. government, backed by recent contracts with the U.S. Department of Veterans Affairs (VA) and the U.S. Army, which deployed Fortress technology in operation Iraqi Freedom.
In this market, government certification is paramount, and when Fortress Technologies introduced its AirFortress product at the end of 2001, according to the company the secure Wi-Fi link became the first to meet the wireless security network standards set by the National Institute of Standards and Technology and the U.S. Defense Department. Although the company does not disclose exact sales figures, Fortress’ chief operating officer, Janet Kumpu, says she expects sales this year to reach roughly $10 million. The company had zero wireless sales just two years ago.
“Fortress has been fortunate to be in the right place at the right time,” Kumpu says. “We found that in the government circle, lack of security was a major inhibitor to Wi-Fi. Departments actually sent out policy changes that prohibited the use of Wi-Fi until they could address the security issue. We have traditionally focused on selling into the federal government, which is contrary to a lot of our competition. We’ve had a first-to-market advantage and have tried to capitalize on that. I think the government has been very creative in its implementations of wireless.”
Although Wi-Fi has generated far more interest among consumers and those businesses ready-made for the technology—for example, warehouses and transit hubs— industry analysts say the enterprise market could take off soon. Many state, local and federal agencies, Global 2000 companies, medical centers and financial services firms would love to roll out Wi-Fi networks and replace wired systems. Industry observers say the technology could have as profound an impact on communication and productivity as the Internet itself. That is quite an accomplishment for a technology that is formally known as 802.11.
Within three years, experts say, nearly every mobile professional will have Wi-Fi cards in their laptops and an increasing number of personal computers used in business will be shipped Wi-Fi ready. Many tech-savvy professionals who use laptops, cellular telephones and personal digital assistants already have Wi-Fi access at home as well as in airports and hotels.
“Originally, we thought the enterprise market was going to drive the use of Wi-Fi equipment because people would see it at work and want it at home,” says a spokesperson for the Wi-Fi Alliance, an industry trade group that promotes the technology. “What has happened though is that Wi-Fi has taken off in retail, then people got it at home and said, ‘Hey, I want this at work, too.’”
And that is what worries so many information technology managers of large, distributed organizations like multinational corporations and government agencies. Without wireless security protections, technology officials potentially face a small army of unauthorized users looking for rogue access points.
Chris Kozup, a wireless analyst with the META Group, a Stanford, Connecticut market research and consulting firm, says many information technology managers have not taken the Wi-Fi plunge because they have yet to develop broad policy guidelines that can be applied throughout their organizations. He says he frequently receives calls from government clients concerned about security who are attempting to write wireless policies and procedures. This helps explain why sales for the enterprise market remain essentially flat. Standing pat for now is a safe decision because most enterprise networks using traditional wired technology are highly secure.
“I don’t believe 2003 will be a huge year for enterprise wireless LAN,” Kozup says. “But within 2004, as you see a lot of issues around security being resolved, you will start to see broader government adoption. And, you have a lot of Global 2000 companies that are planning complete deployment of Wi-Fi within their buildings.”
Either way, Kozup says, Wi-Fi will never completely displace wired networks. The two will coexist indefinitely with wireless LANs serving as an alternative means of cost-effective broadband access as Wi-Fi networks become ubiquitous throughout the United States.
For her part, Kumpu says Fortress stumbled into the wireless security market almost by accident a little more than two years ago. At the time, Fortress was invested almost exclusively in the wired market with a device that provided security for a virtual private network (VPN). As Fortress executives recall, U.S. Navy officials began using the Fortress wired VPN technology to protect a wireless system on the USS Coronado based in San Diego. Back at Fortress’ headquarters, company executives made an intuitive leap that pushed the company in a new direction.
“We said, ‘You know, what a great application. It’s really going to take off,’” Kumpu recalls. “The need for wireless is going to grow significantly. So, we took some of the intellectual property that we had developed, and we basically designed a wireless-specific solution.”
In essence, Fortress bet the company on the new strategy. At the end of 2001, the company launched the AirFortress product line that includes a gateway for secure wireless LANs, a client-side utility for laptops, personal digital assistants and bar code readers, and a control server for managing a system’s back end.
By August 2002, Fortress officials restarted the company as a wireless outfit, complete with $13 million in new funding. As a result, an investor group led by Liberty Partners received 51 percent control of the company. Now the contracts are rolling in.
In March 2002, one deal really made Fortress’ reputation within the Defense Department, when the Army chose Fortress for secure, mission-critical business systems across its Combat Service Support Automated Information System Interface Project (CAISI). CAISI is a multiyear wireless LAN deployment that will provide commercial and tactical network connections for approximately 85,000 combat service support users.
The AirFortress system will enable the CAISI program to provide secure wireless connectivity to support information technology for supply chain management, maintenance and other Army business systems. Company officials say they have shipped the service some 6,000 AirFortress gateways, adding that their technology recently was deployed in Kuwait in support of operation Iraqi Freedom.
In early April of this year, Fortress Technologies announced that the VA is deploying the AirFortress in the agency’s bar-code-based medication administration program. Fortress will ensure patients’ privacy at VA medical centers by protecting the wireless data transmission of patient information at 167 hospitals and centers.
The program is important because more than 7,000 Americans die each year from medication-dispensing errors, according to a study by the National Academies’ Institute of Medicine in Washington, D.C. To eliminate such errors, the VA developed a wireless system used for real-time retrieval of medical information from bar codes on patients’ wristbands. The system prevents errors by electronically alerting health care providers to any potential problems or inconsistencies before medication is given.
In late May, Fortress won a contract to provide wireless security for the U.S. Defense Commissary Agency, which provides groceries and household goods to military personnel, retirees and their families through a worldwide chain of nearly 280 stores. Fortress partnered with Psion Teklogix, which had provided the commissary agency’s wireless system.
Now, Fortress executives expect to extend their reach within the federal government market as more agencies go wireless. That in turn, says Kumpu, could lead to corporate sales. “The nice thing from our standpoint is that these success stories also translate into commercial applications,” she concludes. “With an appropriate security solution, logistics, transportation, retail, health care are all viable markets for wireless. Many of those markets look to the government for leadership on how to address security. Security is a key component of any solution offered today. It’s a must-have. It’s in the check box that everybody looks at.”