The wireless revolution in the workplace is gathering pace. A new report by the Yankee Group reveals that 700,000 US businesses invested in wireless local area networks (WLANs) in 2001 – roughly twice as many as in 2000.

The take-up of WLANs has been fastest in the US, but demand is growing in Europe too. According to analysts at IDC, the WLAN equipment market will grow from $1.2 billion in 2001 to $3.2 billion by 2006. Suppliers of WLAN hardware include Cisco Systems, Intel, Nokia, Netgear and Linksys.

But the thorny issue of security could yet dampen demand. A recent survey of 100 IT managers in the UK, conducted by Vanson Bourne for US security consultancy @stake, found that two in three respondents did not plan to implement a WLAN in the next 12 months because the new network could compromise the security of their entire corporate network. The survey's findings come after a wave of recent reports of hackers easily breaching WLANs.

The idea behind WLANs is to create an online office environment that does not require cables or wires. Anyone with a laptop computer and a WLAN plug-in card can access the Internet at speeds of up to 11Mbits/sec.

Businesses such as hotels, airports or coffee shops are exploring ways of charging customers that access their WLANs. In Europe, there will be more than 20 million users of such 'public' WLANs by 2006, according to Analysys, the market research company. But Yankee Group says that most companies will install private WLANs to cut telecoms and IT costs rather than to generate new revenues.