No one can accuse McDonald's of not staying abreast of the latest trends. Just recently they began offering a revised menu to keep up with the current low carb diet craze in the United States. Now the world's largest food retailer is offering Wi-Fi access along with their burgers.
After several pilot projects in Seattle; San Jose, California; San Francisco; Portland, Oregon; Raleigh, North Carolina; and Boise, Idaho. McDonald's selected Wayport to roll out Wi-Fi access in thousands of McDonald's fast food restaurants around the country.
However, what McDonald's may not have counted on is real concern from IT about security.
Cause for Concern?
John Yunker, an industry analyst at Pyramid Research, says that although hot spots are not ubiquitous yet, there are already enough of them around the country to make IT managers nervous.
"For the IT manager, for more and more people to be logging into from more locations is a little scary from a security standpoint," says Yunker.
Another industry analyst backs that up with recent survey results. "Our latest surveys show that security is a factor in determining whether a company allows its employees to access the network through Wi-Fi hot spots," says Amy Cravens, senior analyst at In-Stat/MDR.
Nevertheless, McDonald's and others such as Cometa Networks and Toshiba are pushing ahead with plans to deploy hot spots in major retail locations. Cometa is still promising 20,000 hot spots in 50 major metropolitan areas within a couple of years.
Currently there are 13,500 McDonald's in the United States, and approximately 30,000 restaurants worldwide. Dan Lowden, vice president of marketing at Wayport, says his company hopes to install Wi-Fi hotspots in anywhere from 3000 to 6000 stores in the next nine to 12 months.
In selecting Wayport, the company simultaneously dropped pilot programs from both Cometa and Toshiba.
Pricing Plan
By agreement with McDonald's, walk-up customers will pay $2.95 for two hours of service and will also be offered Wayport's standard pricing of $29.95 for unlimited access in all of its other 800 locations, which include 700 major hotels, six airports, and UPS stores nationwide.
There is no doubt usage is growing dramatically, according to Wayport's Lowden, who says Wayport had over 400,000 connections last month alone with a 10 percent to 20 percent growth per month.
"When we made this announcement, we were called by some of the largest companies in the world with huge sales forces like those in the pharmaceuticals industry asking us about our coverage," Lowden says.
According to Cravens, in order for the enterprise to adopt hot spot usage in a big way, Wayport and others will have to offer new pricing plans based on service-level agreements that promise non-stop, uninterrupted high-speed service as well as no-frills service for students.
Another gating factor in the success of Wi-Fi appears to be the lack of roaming agreements between Wi-Fi service providers, says Pyramid's Yunker. At present none of the providers have roaming agreements with their competitors.
"No one is going to pay $30 per month for Wayport and then turn around and pay another $30 a month for T-Mobile service," Yunker says.
However, Yunker believes the providers realize the seriousness of the problem and will take steps to create these agreements.
He also predicts that within a year or two, the price of a monthly prescription will go down to $5, indicating that Wi-Fi may in many cases be used as a competitive differentiator rather than as a profit center.
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