Bluetooth: HP’s Strategy
It was the morning of November 12, 2001 and Carly Fiorina woke with a splitting
headache. Was it the wine or the stress? Probably both. As she prepared for the busy
day ahead she knew things were not going to get any easier. In addition to the immense
challenges she faced as CEO of Hewlett Packard with the potential merger with Compaq,
Carly knew she would have to address the integration of Bluetooth into Hewlett
Packard’s product line.
As a star salesperson at Lucent, Carly had seen first hand how a once highflying company
could begin the downward spiral. With Hewlett’s stock price sagging and a potentially
failed merger agreement on the horizon, Carly knew that the company could ill afford
further strategic missteps.
One of HP’s strategies is to integrate the PC, the printer, the handheld communication
device and the server. All would be linked and all would be driven by HP. Carly knew
that Bluetooth will be one vital element of this strategy.
Introduction to Bluetooth
Bluetooth is a technology pioneered by Swedish phone-maker Ericsson which will allow
us to throw away our computer cables. Our devices (computers, printers, PDAs) will one
day communicate over radio waves rather than the bulky cables we now use. This
technology grants mobility to the once-tethered, and renders possible what once wasn’t.
Bluetooth chips will be planted in the aforementioned devices we use every day. In fact,
Cahners In-Stat Group says 1.4 billion Bluetooth-compatible devices will be in use by
2005.1 The chips will send and receive signals to each other using radio waves,
eliminating the need for a physical connection. Not only will Bluetooth change the way
we execute tasks we already do, such as send a document from computer to printer, it will
make novel relationships possible, such as a cell phone which talks to a printer or PDA
wirelessly.
Ericsson named the technology for the blueberry-eating Harald Blåtland, King of the
Danes, who united Denmark and Norway (Get it? Like uniting your printer and your
computer), and encouraged as many manufacturers as possible to integrate Bluetooth into
their product development2. The chips are very low in cost, around $5, and do not use
much power, so manufacturers can adopt the new technology relatively painlessly3. So
look for them everywhere, from your car to your kitchen.
This case was prepared by Todd Kuhl, Will Thomas, Erin Kennedy and Doug Burns. Copyright 2001.
1
http://www.oreillynet.com/pub/a/wireless/2000/11/03/bluetooth.html , accessed 11/7/01
2
http://www.palowireless.com/infotooth/whatis.asp, accessed 11/7/01
3
IBID.
Bluetooth will help create the PAN, or Personal Area Network4. Using a Bluetoothenabled headset, you’ll be able to use your cell phone while it’s still in your briefcase.
With a Bluetooth refrigerator nearby, your computer can automatically receive updates
on when you need to buy milk. A Bluetooth shipping container can announce its own
arrival to a warehouse. As long as they’re within 30 feet or so of each other, two
Bluetooth devices can chat when they used to have to hold hands to share data. 5 The
possibilities are very encouraging to those consumers long-tired of the tether.
Other Wireless Technologies
Two other standards, sometimes mistaken for competing technologies to Bluetooth are
WiFi and Infrared technology. Further study shows limited overlap between these
technologies.
WiFi / WLan
An existing standard based on the 802.11 spectrum has been adopted by many players in
the industry and has become known by the vernacular WiFi or WLan. The 802.11b
technology can move data around at speeds as fast as 11 megabits per second.6 Range of
WLan can be as far as 300 feet. The technology is making great inroads in the network
business for both its convenience factor (allowing people to move their laptops around
and not be tied to their desk) and, recently, as a cost effective alternative to laying cable.
Retrofitting office buildings with network cable can be very expensive. With a WLan
system, it is as easy as plugging in a wireless card and a base station and the network is
up and running.
The WiFi technology has made dramatic inroads in recent years. The technology is
readily available for LAN connections as opposed to the hype of Bluetooth with its lack
of penetration. "Since Bluetooth is not out there yet, Wi-Fi is taking over. With Wi-Fi,
the throughput is an 11 Mb/s [megabits per second] connection vs. Bluetooth with 1
Mb/s. Bluetooth has a distance limit of 30 feet. With Wi-Fi, the distance is 300 feet” says
one industry expert.7 However, there are limitations to WLan, including increased
power consumption and higher costs. The technology remains primarily assimilated to
laptop connections to office and school networks. The bulk and power consumption of
WLan is well suited to laptops, but not cell phones and PDAs.
Infrared Communication
While WiFi represents a more robust technology than Bluetooth, IR represents a lower
end play on wireless communication between devices. Based on the same technology
that is used in remote controls commonly used with televisions and VCRs. IR ports are
being used in communication between some devices such as handhelds. However, the
4
5
6
7
http://www.oreillynet.com/pub/a/wireless/2000/11/03/bluetooth.html, accessed 11/7/01
http://www.palowireless.com/infotooth/whatis.asp, accessed 11/7/01
Xircom Wlan White paper.
Untangling Bluetooth
2
most important technological limitation to the IR communication port is the concept of
“line of site.” IR communication ports can only communicate when the two devices are
in alignment as light can not turn corners. Accordingly, the use of IR for network
connections and other dedicated connects is very limited.
In summary, the 802.11 spectrum is used for wireless ethernet - connecting laptops and
desktops with office networks - while Bluetooth is used for cable replacement, getting rid
of connections between computers and PDAs, handsets, printers, and mice.
Hewlett Packard’s Bluetooth Initiative
Carly went to her engineers to refresh her knowledge on HP’s Bluetooth initiative. They
told her that Hewlett Packard is an active member of the Bluetooth Special Interest Group
(Bluetooth SIG), a non-profit trade association that promotes personal connectivity
solutions using the Bluetooth technology. The Bluetooth SIG administers and promotes
specifications that can be widely implemented to enhance the demand for Bluetooth
Products. She also learned that HP is the Chairperson for the Printer Working Group
within the Bluetooth SIG and is leading the efforts to shape the printing protocols and
specifications using Bluetooth.
The engineers got Carly excited by what they described as the potential uses of Bluetooth
within HP’s own suite of products. Carly reviewed their presentation listing the initial
applications to use Bluetooth:
-
notebook, personal digital assistants (HP’s Jornada PDAs) and cell phone
synchronization
use of a PDA to control your notebook presentation
wireless printing within a short range of a Bluetooth enabled printer
sharing data/files between Bluetooth equipped notebooks
downloading photos from a digital camera to a notebook or printer
cell phone/notebook headsets
use of a cell phone as a dial-up connection to your corporate network, similar to
what you do today when you use your modem to dial-up via a phone line. With
Bluetooth, you would be able to perform this dial-up connection from your
notebook to a cell phone without any intermediary cables.
HP expects users with Bluetooth enabled PCs to take advantage of other Bluetooth
devices and download e-mail via their mobile phones, synchronize personal digital
assistants (PDAs), share files and print without carrying or connecting any cables. For
example, HP’s Deskjet 995c printer will allow users to print without cables from up to 10
meters (approximately 30 feet) away from other devices enabled for Bluetooth printing.
Most of HP’s competitors are also embracing the Bluetooth technology, including
Compaq. Carly took special interest in the fact that Hewlett Packard’s Jornada pocket
and handheld PCs are direct rivals to Compaq’s handheld iPAQs and that both companies
were trying to figure out how Bluetooth will play a role with their pocket PC line of
3
products. Currently, an iPAQ owner can use a Bluetooth enabled “Multiport” to
synchronize wirelessly with a Bluetooth enabled notebook or cell phone. Now that
Compaq and HP are in talks about a merger, what will this mean for HP’s Bluetooth
initiative?
Bluetooth Security
One of the biggest problems concerning the adoption of Bluetooth, of which HP is keenly
aware, is security. HP’s engineers knew that there was a great deal of contradictory data
and opinion concerning the potential security flaws and degrees of protection. Some
engineers believe that the microwave link (akin to a radio signal) is rife with opportunity
for the would be hacker, while many Bluetooth advocates argue that Bluetooth security,
when properly implemented was second to none. Carly Fiorina knew she had to drill
down on the views of her engineers and get a quick primer on how Bluetooth security
worked. How could HP implement a Bluetooth system that could fall prey to hackers and
thereby kill the adoption rate of HP Bluetooth enabled products?
HP’s engineers explained that there are three basic settings for security in the Bluetooth
Generic Access Profile (GAP), which is the basic standard on which all other profiles are
based. The three security modes are defined as:
Security Mode 1: Non-Secure
Security Mode 2: Service Level Enforced Security
Security Mode 3: Link level Enforced Security8
In Security Mode 1 a device will not enforce any security and remains in the non-secure
mode. This obviously was not an option for HP Bluetooth.
In Security Mode 2 the Bluetooth device initiates security after the communication
channel is established (at the higher layers), while in Security Mode 3, the Bluetooth
device initiates security procedures before the channel is established (at the lower layers).
It was apparent to the HP managers that Security Level 3 was the preferred standard.
This would establish security before establishing connections.
Simultaneously, two possibilities exist for the chosen Bluetooth device’s access to
services. These are the “trusted device” and the “untrusted device.” The trusted device
has access to all services. The untrusted device doesn’t have fixed relationships and its
access to services is limited. In her mind, Carly painted this as the difference between a
front row seat and a back stage pass.
For services between devices, three security levels are defined:
1. Services that require authorization and authentication: Automatic access
is only granted to trusted devices. Other devices need a manual
authorization.
2. Services that require authentication only: Authorization is not necessary.
8
http://www.palowireless.com/bluarticles/cc1_security1.asp
4
3.
Services that are open to all devices: Neither authorization nor
authentication is required; no access approval is required before service
access is granted.9
It is possible and likely that HP would set the trust level of a device specifically
For services or group of services. The interaction with a remote device does not limit the
security engineer’s ability to implement refined and specific access policies. Thus Carly
could have her Blackberry remotely instruct her printer to print out the text of her
remarks for stockholders, but other employees would be denied access to her hard drive.
HP’s top wireless engineers told Carly that for any security system to be successful,
flexibility and usability are top priorities. Thus it must be possible to grant access to
some services without providing access to other services. As an example, on an HP
printer linked by Bluetooth to a cell phone, the cell phones security discovery records
should be generally accessible, whereas dialup networking shall only be available for
specific devices. Furthermore the security architecture should support security policies
for devices with some services communicating with changing remote devices (for
example file transfer or business card exchange from an HP communication device). It is
also imperative for seamless and unobtrusive security for user intervention for access to
services to be avoided as much as possible. Intervention is only needed to allow devices
limited access to services or for setting up trusted relationships with devices allowing
unlimited access to services. The security on Bluetooth devices would also allow
different protocols to enforce the security policies. In other words, the protocols for
cordless telephony, dialup networking and file transfer and synchronization can all be
different.
While Carly herself was mildly baffled by some of the security jargon bandied about by
her engineers and security team, she knew that flexible, strong and invisible Bluetooth
security was foremost on the agenda for communication between remote devices. HP
would be forced to reckon with significant security concerns in ushering in Bluetooth for
its newest product lines.
Questions
Carly wondered: How should I as CEO push the company to rapidly integrate Bluetooth
into its devices? Should all devices be rolled out with Bluetooth at once or should it be a
staged adoption? What were competitors doing? What about security concerns? Did I
really finish that whole bottle?
9
http://www.palowireless.com/bluarticles/cc1_security1.asp
5
Exhibits of Hewlett Packard and Compaq’s Bluetooth enabled products
Exhibit 1
HP’s Jornada 700 series handheld PCs
Exhibit 2
HP’s Jornada 560 series pocket PC’s
Exhibit 3
HP’s Bluetooth Wireless Printer Adaptor
6
Exhibit 4
HP/3com Bluetooth Wireless PC Card
Exhibit 5
HP’s Socket Bluetooth Connection Kit
7