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White Paper

Intel Information Technology Computer Manufacturing WiMAX

The Business Case for WiMAX in the Enterprise
To offer high-speed network access at home for employees in countries where wired broadband services are not widely available, Intel IT worked with commercial providers to run trials of fixed-point Worldwide Interoperability for Microwave Access (WiMAX) services. We found that migrating the heaviest users of dial-up services at three sites in Costa Rica, Ireland, and the Philippines could save USD 388,000 per year in remote access costs. We estimated the value of productivity improvements due to time savings for the 130 trial participants at USD 122,000 to USD 535,000 per year, or a potential USD 8.1 million to USD 35.3 million per year if the service were deployed to all Intel laptop users currently using dial-up. Ian Soanes, Michael Young, Dvir Ben-Ari, and Jaye Matthews, Intel Corporation February 2007

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and the Philippines. users of dial-up services at the three sites • Productivity improvements for the 130 trial participants conservatively estimated at USD 122.  . as well as to help balance the demands of work and home. in some cases. We identified fixed-point Worldwide Interoperability for Microwave Access (WiMAX) as a potential solution and worked with service providers to run trials of commercial services in 2005 and 2006 for approximately 130 employees around Intel sites in Costa Rica.000 per year by migrating the heaviest Migrating to WiMAX generated productivity improvements among the 130 trial participants conservatively estimated at USD 1. we expect to further evaluate the potential of emerging mobile WiMAX services. In markets where wired broadband services are widely available.1 million to USD 35. so many employees still rely on dial-up or.000 to USD 535. we have migrated many users from dial-up networking to wired broadband for network access from home.000 per year. have no network access from home at all. However. Key findings included: • Potential direct cost savings of USD 388.000 to USD 535.000 per year • Potential productivity benefits of USD 8.White Paper The Business Case for WiMAX in the Enterprise Executive Summary Intel employees worldwide increasingly need high-speed network access at home to facilitate working in global markets and in geographically dispersed teams. Ireland. They continue using WiMAX and other employees have since subscribed to the services. In the future.3 million per year by migrating all Intel employees currently using dial-up Trial participants saved about seven hours per week on average and worked an additional eight hours per week from home. We analyzed the potential cost savings and productivity benefits of migrating users to WiMAX. wired broadband services have not been widely deployed in emerging markets and less-populated areas.

............................................................................................................................................................................................  Business Challenge.. 8 Considerations ......................... 6 Service Provider Offerings .............................................................................. 7 Results: ROI Analysis .................................................................................................................................................................................... 11 Authors ...........................................................................................................................................................................................The Business Case for WiMAX in the Enterprise White Paper Contents Executive Summary ..................................... 5 WiMAX Commercial Service Trial......................................................................................................................................................................................................................................................................... 5 Site Selection ................... 6 The Study .................................................................................................................................................................................................................................................................................................................................................................................................. 4 Solution .................................................................................. 11 Acronyms ............................................ 7 Productivity Benefit Analysis ..... 10 Conclusion ..................................................................................................................................................................................................................................................................................................................................... 11 3 ...............................................................................................................

In some countries. employees typically use cell phones to call into meetings remotely but lack the ability to access the network from home. In these regions. However. service providers have moved quickly to meet this demand by deploying fixedline broadband services. In Costa Rica. about a third of employees use dial-up networking and those employees each use more than 450 minutes per month on average. This is increasing in some regions of Asia due to the lack of wired infrastructure and an emerging “on-the-move” lifestyle. This presents a challenge to Intel: How do we promote work-life balance in a global corporation when employees don’t have sufficient network bandwidth at home? This is an even more pressing issue when employees don’t have land-based phone lines at home. for instance. The availability of fixed-point WiMAX equipment and early deployment of services in several countries provided Intel IT with an opportunity to see whether these services could improve employee productivity and cut communication costs. including the United States. to facilitate working in teams that are geographically dispersed in multiple time zones. Typically. service providers have been slower to deploy wired broadband to more remote parts of emerging markets. employees in these mature markets were previously using dial-up for network access at home and we have been able to improve productivity by migrating many of them to wired broadband services. many Intel employees in these emerging markets have lacked access to wired broadband services. dialup use remains much higher in countries where broadband is not as widely available. WiMAX high-speed wireless services present one possible solution to the problem. However. Intel employees’ use of the corporate dial-up networking service in different countries reflects the availability of broadband services and the work-from-home trend. the total number of dial-up network minutes has declined as workers switch to broadband connections. and to help balance the demands of work and home.White Paper The Business Case for WiMAX in the Enterprise Business Challenge Workers increasingly need high-speed network access at home to enable a flexible approach to working in global markets. as shown in Table 1. 4 . This is partly because it is difficult to justify the cost of providing infrastructure in difficult terrain and less densely populated areas. As a result. In mature markets. despite demand from multinational corporations and other businesses.

444 5.988 302.218 789 Percent Using Dial-up Service 8% 34% 14% 18% 19% Minutes Used per Month 1. Ireland. Use of Dial-up Networking at Intel Sites Location of Site United States Costa Rica Philippines Malaysia Ireland Total Employees 39.16 2004) equipment designed to operate within the spectrum that governments had licensed for that purpose. In Ireland.6 GHz range. and India. the equipment available used the 3. the situation was more promising in other countries with high dial-up use.409 Solution WiMAX Commercial Service Trial We began by identifying countries in which there was high potential demand for WiMAX. Intel employees in Costa Rica and Ireland.4 GHz to 3.131 374. where this part of the spectrum was not available for WiMAX. service providers already owned licenses for spectrum in the 3.020 836 773 1. reported greater 5 .859 351. could not participate in our early trials. and the Philippines. However. Our aggregate dial-up usage data indicated extensive use of dial-up networking in all three countries.021 2.117 Employees Using Dial-up Service 3. where broadband availability is comparatively low. To validate our selection.3 GHz to 3.620 392. In Costa Rica.747 4. One criterion was availability of pre-WiMAX (untested) or WiMAX (compliant with IEEE 802.6 GHz band.The Business Case for WiMAX in the Enterprise White Paper Table 1.289. we compared our aggregate dial-up usage data with surveys that analyzed the type of connectivity employees used when working at home. together with service providers capable of delivering commercial services relatively quickly. suggesting high potential demand for WiMAX.700 6. This meant that countries such as the United States. a service provider was already commercially deploying pre-WiMAX equipment to residential and business users. When we began our evaluation in 2005. Malaysia.

and the Philippines for our trials. Site Selection We selected three sites in Costa Rica. a solid business plan with management support. How Intel employees access the corporate network from home. 6 .White Paper The Business Case for WiMAX in the Enterprise reliance on dial-up services than employees in most other countries. these services ranged from 384 kbps to 2 megabits per second (Mbps) at various contention ratios. had laptops that they could use to connect from home. In each country. as shown in Table 2. These sites shared key attributes: Employees used dial-up networking extensively and there was a low population density in the areas surrounding the sites with a corresponding low availability of wired broadband. Intel worked with each provider to help ensure delivery of service with WiMAX-compliant equipment to our employees. funding. Ireland. and long-term vision. Each site employed several thousand people. as shown in Figure 1. with download speeds starting at about 300 kilobits per second (kbps) with a 50:1 contention ratio for between USD 20 to USD 35 per month. United States Costa Rica Middle East. Service Provider Offerings We analyzed service provider offerings in each of our selected countries. Many employees at the Philippines site used cell phones for communication from home due to a lack of landlines in the area. We determined that service providers in each country were in a good position to provide a production WiMAX service with an operating license for the required frequencies. depending on the site. including external customer premises equipment (CPE) and setup. Providers typically delivered synchronous or asynchronous services 100% Dial-up through a phone line Cable modem Don’t use a computer at home DSL Can’t connect to Intel network from home Other 80 60 40 20 0 China India Malaysia Israel Ireland Europe. as shown in Table 1. Because provider offerings varied among the different countries. Up to 60 percent of employees. Africa Corporate Average Figure 1. Initial cost of installation at a customer’s residence was USD 500 to USD 800. we selected a WiMAX service that offered adequate performance for our needs at the best price.

This scenario provides a direct cost savings for each user we migrate. we migrate the heaviest users and some who use fewer than the breakeven number of minutes.The Business Case for WiMAX in the Enterprise White Paper The Study We solicited participants for the trial by broadcasting e-mail messages to employees. Then. This meant that only about 70 percent of potential participants were able to receive service. In Ireland. Participants began using WiMAX between late 2005 and early 2006. • Scenario A. we calculated the breakeven point for an individual user. For each country. including monthly service and installation cost. The number of WiMAX users in Ireland and Costa Rica has continued to grow since this analysis was completed.05 917 Ireland No charge USD 43 USD 43 USD 0. In Costa Rica. Migrate as many users as possible without increasing monthly communications costs. To ensure that we reduce communication costs by switching people from dial-up to broadband. in dial-up minutes per month 1 ¥ Philippines USD 500 USD 20 USD 31 USD 0. • Potential cost savings due to replacing dial-up access with WiMAX • Improved employee productivity due to working with a WiMAX broadband connection Table 2. Cost Savings Analysis Dial-up access is charged by the minute.13 331 Based on Q1 2006 data and exchange rates. We analyzed data for approximately 130 participants. defined as those who currently use more than the breakeven number of dialup minutes. it maximizes the potential productivity benefits of the migration because we are providing broadband to more users. Based on five-year net present cost calculation. In this scenario. Though this scenario may not result in a direct savings in communications costs. • Scenario B. defined as the number of dial-up minutes that cost as much as WiMAX service. Results: ROI Analysis We analyzed two aspects of ROI for the trials. Cost Analysis Comparing Dial-up with WiMAX1 Cost Element WiMAX customer premises equipment (CPE) installation WiMAX monthly service cost Total WiMAX monthly cost¥ Dial-up cost per minute Breakeven point for switching a user from dial-up to WiMAX.05 617 Costa Rica USD 500 USD 34. we need to make sure that we migrate the right people—those who are heavy users of dial-up networking. more than half of whom were in the Philippines. as shown in Table 2.95 USD 46 USD 0. unobstructed path between transmitter and receiver. we considered two migration scenarios based on these costs. Migrate only employees who use dial-up heavily. the number of participants was somewhat restricted by lineof-sight limitations of the wireless technology that result in reduced performance when there is not a direct. participation was initially inhibited to some extent by the high CPE cost. while WiMAX service has a fixed monthly cost. for each site. by inviting specific dial-up users. 7 . and by word of mouth as people discussed the trial.

while one previously used a DSL connection. as shown in Figure 4.325 U. those who had lacked home Internet access were only able to perform very limited functions such as using their laptops All Users (789) 0 Current Top 275 Figure 4. we migrate 368 users.000 $32. Cost analysis: Migrating employees at the Philippines site from dial-up to WiMAX. 13 of the 14 U.000 200.000 300. without increasing total cost.000 per year. 200. Dollars 100.443 Previously.000 150. When interviewed.000 per year. the top 44 percent.000 $471.000 150. we migrate 126 users to WiMAX.S. Cost analysis: Migrating employees at the Costa Rica site from dial-up to WiMAX. We asked participants a standard set of questions.000 50.153 $224.S. representing about 17 percent of those participating in the trial at that time.176 $69. 8 .136 Costa Rica Dial-up Users WiMAX Users In Scenario A. as shown in Figure 3.124 applications online with a high-speed connection • How much time they saved due to the broadband connection 400. saving USD 91. including: • How many hours they worked at home before and after WiMAX installation • Whether they performed different activities and used different 0 Current Top 168 Top 606 Figure 3. $90. and sales and marketing.000 50. we migrate 168 users to WiMAX. saving USD 239. In Scenario B. In Scenario B.279 $203.196 Dial-up Users WiMAX Users We estimated the productivity benefits of switching to broadband by interviewing 22 users in the Philippines and Ireland. all had been using WiMAX for at least two months. we migrate all 789 dial-up users and still save USD 65. 0 Current Top 126 Top 368 Ireland In Scenario A.000 100.000. as shown in Figure 2. Productivity Benefit Analysis $250. Before having WiMAX installed. the top 87 percent. All the participants in Ireland previously used dial-up connections. we migrate 606 users.S.000 $72.900 U. Cost analysis: Migrating employees at the Ireland site from dial-up to WiMAX. saving USD 58. $500. we migrate 275 users to WiMAX.000 $62. human resources. without increasing total cost. Figure 2. Dollars Summary Interview Results Participants attributed time savings averaging seven hours a week to WiMAX.000 per year. Dollars Philippines $107.063 $705 Philippines employees said they had no Internet connectivity. with a substantial increase in the number of activities performed online and a corresponding increase in working from home. In Scenario B.White Paper The Business Case for WiMAX in the Enterprise $250.884 In Scenario A. The employees included managers and engineers from business groups including IT.000 $141. manufacturing.758 Dial-up Users WiMAX Users $407.000 $235.000 200.915 $224.000 100.

1 million for all Intel laptop users currently using dial-up. This was based on a previous analysis at Intel that indicated a time savings of 10 percent of the hours worked remotely due to switching from dial-up to fixed broadband connections.000 for the 130employee trial. we can only gather data indirectly. through surveys. Low-end Estimate We used the following assumptions: • Our key variable was hours saved. Our low-end estimate yielded an estimated business value. and other data-sharing software. and enterprise business applications. participants said they used a wide range of online applications and services including e-mail and calendar. Often. Therefore. We assumed that not all employees will have the option of WiMAX. Some participants with dial-up access said they could check e-mail and perform some other online functions. based on productivity improvements. We then reduced this figure by 50 percent to USD 25 when calculating productivity value. participants said that being able to work effectively online resulted in major changes in their weekly schedules. because survey participants reported an average of 12 hours. They also downloaded and uploaded a wide variety of data. Estimating Business Value Accurately predicting productivity improvements is difficult. Besides saving an estimated seven hours per week. rather than by directly observing user behavior and its effect on output. that number tripled to 12 hours per week. we took a conservative approach when calculating estimated productivity benefits: • We calculated a low-end estimate based partly on previous analysis at Intel as well as a highend estimate based on time savings reported in our WiMAX user survey. checking voice mail. or USD 8. participants worked from home an average of four hours per week. • We calculated the business value of hours saved at 50 percent of the fully burdened employee per-hour rate. as shown in Table 3. development tools. indicating that participants felt they were able to perform their jobs better by working from home outside regular office hours as well as during the day. databases. • For the high-end estimate. we calculated savings based on half the hours the WiMAX trial participants actually said they saved.  . because service is not uniform and is negatively affected by obstructions such as hills and forests. • Sixty percent of the employees who lack a broadband connection today could be connected using WiMAX. Before getting WiMAX service. With WiMAX. • A fully burdened cost of USD 50 per employee per hour. of USD 122. We used a figure of 10 percent of hours worked from home. but were unable to use many applications and were also limited because they could not use the phone and work online at the same time. This figure is conservative. and dialing into to conference calls.The Business Case for WiMAX in the Enterprise White Paper offline. in contrast. • Each user works at home eight hours per week once broadband is available. Users’ comments supported the estimated productivity benefits. access to the Web and to internal Intel sites and servers. with WiMAX. online conferencing.

Total productivity benefit of WiMAX trials per year: USD 1. including: Total value of WiMAX for all Intel users per year: USD 8.8 47 37.3 million 10 . then productivity benefits and cost reductions may not come to fruition. or USD 35.65 Total Intel laptop users Percentage of laptop users using dial-up Laptop users who could receive WiMAX service 65.White Paper The Business Case for WiMAX in the Enterprise Table 3.000 22% 8. based on productivity improvements. as shown in Table 4.5 130 21. • Benefits depend on migrating the right people—the heaviest users of dial-up services—to broadband. • As in our low-end estimate.3 million for all Intel laptop users currently using dial-up.1 million Table 4. Currently. which typically cost less than USD 100.6 130 4. of USD 458.5 47 164.580 Considerations There are risks associated with pursuing the potential cost reductions and productivity benefits identified in our study. we assumed a fully burdened cost of USD 50 per employee per hour and reduced this figure by 50 percent to USD 25 when calculating productivity value. • We have assumed that governments will provide licenses that allow service providers to provide coverage in most areas and that the geography allows service to reach employees’ homes.000 22% 8. If these “expensive” dial-up users remain on dial-up while low usage users are migrated. Total productivity benefit of WiMAX trials per year: USD 534.000 for the 130-employee trial. Our high-end estimate yielded an estimated business value.385 USD 25 • The final cost of WiMAX services is not yet clear. volume sales of WiMAX equipment would likely lead to lower costs.580 Total value of WiMAX for all Intel users per year: USD 35. Productivity Analysis: Low-end Estimate Factor Hours worked from home per week Hours saved per employee per week times 10% Weeks worked per year Total hours saved per employee per year Number of employees in trial Total hours saved in trial per year Value of each hour saved (adjusted) High-end Estimate Value 8 0. Productivity Analysis: High-end Estimate Factor Hours worked from home per week Hours saved per employee per week times 50% Weeks worked per year Total hours saved per employee per year Number of employees in trial Total hours saved in trial per year Value of each hour saved (adjusted) Value 12 3. However.888 USD 25 We used the following assumptions: • Our key variable was hours saved.000 Total Intel laptop users Percentage of laptop users using dial-up Laptop users who could receive WiMAX service 65. Our assumption of 60 percent availability makes allowances for the likelihood that not all locations will get service. we assumed that 60 percent of the employees who lack a broadband connection today could be connected using WiMAX. This is expensive compared with current broadband modems and routers. installation costs for fixed-point CPE are USD 500 to USD 800. We used a figure of 50 percent of the average hours that trial participants said they saved due to the WiMAX connection. • As in our low-end estimate.

Another potential obstacle is that due to line-of-sight geographic limitations. However. We estimate that these productivity benefits alone could be worth USD 8. Mobile broadband equipment is starting to become available and early evaluation will enable us to assess potential benefits as we seek to keep our employees as productive as possible in our fast-changing global and mobile working environment. Michael Young is an IT engineer with Intel Information Technology. Next. our analysis shows that it may be worth extending the service to a larger proportion of the workforce. However.3 million if WiMAX or other broadband services were made available to all Intel laptop users. we expect to evaluate WiMAX in a mobile usage model (IEEE 802.16e). Migrating more users offers added business value due to productivity improvements and workday flexibility associated with an always-on broadband service. Acronyms CPE kbps customer premises equipment kilobits per second Mbps WiMAX megabits per second Wireless Interoperability for Microwave Access 11 . volume production of equipment and deployment of WiMAX services is likely to lead to lower costs. Jaye Matthews is a human factors engineer with Intel Information Technology. it will not be possible to deploy WiMAX to all potential users. Authors Ian Soanes is a product manager with Intel Information Technology. The current high cost of CPE may present a roadblock to early adoption. Dvir Ben-Ari is a finance analyst with Intel Corporation. more employees have begun using WiMAX to provide everyday connectivity since we performed our analysis. Migrating the heaviest users of dial-up services can deliver substantial hard cash savings.The Business Case for WiMAX in the Enterprise White Paper Conclusion Our analysis shows a solid business benefit to deploying WiMAX to dial-up users across the enterprise.1 million to USD 35. which can be done without an overall increase in remote communication costs. making the potential cost savings and productivity benefits even more compelling. Users appear happy with the service overall and have continued to use it. In fact. especially in regions where wired broadband services are not widely available.

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