Strata8 - new approach to in-building wireless telephone usage

(2 updates - see below)

Strata8 Networks is a new Bellevue, Washington company that provides a new option for enterprise wireless telephone use.

Stata8's basic idea is that while an enterprise's workers are on-premise, their wireless telephones will "switch over" to use the enterprise's (landline) Private Branch Exchange (PBX) telephony services over Strata8's licensed spectrum, theoretically insuring that the overall Quality Of Service (QOS) of the call remains high. When off-premise, the workers' phones switch over to using a wireless telephony carrier's network (but, there's a catch- see below).

To use Strata8's service, the enterprise must deploy microcells / picocells (purchased from Strata8) inside their buildings, the wireless telephone users must buy and use specific wireless telephone models (again, purchased from Strata8), and pay Strata8 $25/user/month for the privilege. Also, Strata8's wireless technology is Code Division Multiple Access (CDMA), so the Strata8's (CDMA) phones only work with Sprint Nextel, Verizon Wireless, and some Alltel service areas (Alltel uses both GSM and CDMA). Nancy Gohring explains all of this very well in her January 21 article in PC World Service Supports Cell Phones Inside The Office.

A development yesterday in the Strata8 story is that John Cook of the Seattle Post-Intelligencer (P-I) writes that Strata8 now has a deal with Sprint Nextel. Nothing posted about that development on Strata8's News and Events page.

Overall... color me skeptical about Strata8's prospects, unless they've been able to make the installation radically simpler and allows the enterprise to achieve substantial cost savings for having implemented it. One complication I can foresee is the pain and expense of updating the corporate PBX for accommodating the new phones... which aren't on the premises most of the time. Would (expensive!) new "line cards" need to be added to the PBX to add more lines? How are incoming calls handled to the wireless phones - through the PBX, or direct as the users are used to? How are outgoing calls sent through the PBX - what phone number shows up on another caller's phone or mobile phone?

It would seem to me that Strata8 is fighting against being able to negotiate even better wireless telephone rate plans for enterprises (and, given that three of the four wireless telephony carriers just announced flat-rate unlimited use plans, the time for renegotiation might be ripe) and simply adding microcell / picocell "repeater" systems for providing better in-building coverage of a wireless telephony carrier's signals. (The PC World article mentions that RadioFrame Networks [which is also in the Seattle area, but apparently has no relation, including providing equipment, to Strata8] does this, but their products don't appear to fit the application of "simple repeater").

But I'm most skeptical of Strata8's prospects because it doesn't take into account the rise of Wi-Fi being built into a wireless phones, the rapid deployment of Wi-Fi within enterprises (especially now that 802.11n addresses capacity issues by using the 5 GHz band and "MIMO" addresses nagging coverage issues) and what that presages for enterprises. For an example of how seamlessly Wi-Fi in the wireless telephone can work, see the example of T-Mobile's Hotspot@Home service. Although intended for home users, it presages the rise of using Wi-Fi and wireless telephony networks seamlessly - Wi-Fi when on premise, wireless telephony network when off-premise. When on Wi-Fi, T-Mobile (the carrier in this example) doesn't charge for minutes of usage. When on Wi-Fi, you use the same number. Etc.

In fact, one of the primary downsides to Strata8's approach is that it doesn't seem to address data - it's seems to address only voice. But, increasingly, many phones have a significant data component - not the least of which is Short Message Service (SMS) which, for some users, has become a critical way to communicate, and there's no real equivalent of SMS in "wireline" voice... so how is that addressed by Strata8's approach? (Update 1 - I did find a brief mention on the Strata8 site that states "Simply Works Like a Phone - Strata8 Networks Enterprise Cellular phones provide features enterprise end users expect in a phone: local numbers, caller name, caller id, call waiting, 3-way calling, directory assistance, 911, voicemail and SMS text messaging." So apparently SMS is accommodated with Strata8 service, but I'm still skeptical about Internet-enabled features that wireless telephone users are coming to expect and exploit.)

Strata8 is certainly worth investigating for enterprises, but come armed with some hard questions... especially if Strata8 will require changes in the enterprise PBX.

(Update 2 - This article in GigaOM seems to echo my feelings that there's considerably more promise in using Wi-Fi as "on-premise" wireless for enterprises.