(FORTUNE Magazine) – Turn the clock to zero, boss The river's wide, we'll swim across We're starting up a brand new day --Sting, "Brand New Day"

It must be difficult for tech investors to keep their heads up these days. Amidst the reset in the Nasdaq, concerns over corporate IT spending, reduction in telecommunication capital expenditures, and economic difficulties surrounding the enormous 3G wireless license fees, optimism becomes a fleeting endeavor. But perhaps all we need is a new hero--some innovation to point to that is changing the world; a technology that is about to explode in popularity; a new beacon of hope.

One seemingly unlikely candidate is a wireless technology that goes by the decidedly unheroic name of 802.11b. Also called Wi-Fi, 802.11b is the next big thing. Wi-Fi is an open-standard technology that enables wireless connectivity between laptops and local area networks. Today's Wi-Fi products, which transmit in the unlicensed spectrum at 2.5 GHz, are capable of speeds of up to 11 Mbps--about seven times faster than a typical T1 connection.

A few years back, when Wi-Fi transmission speeds were much slower, this system appeared to have little value. But as the technology evolved, the benefits became apparent. Corporate users found it convenient to be able to move around the office (or campus) without the need for a physical LAN connection. Universities embraced Wi-Fi as a way to satisfy the demands of thousands of Net-hungry students without dragging miles of CAT5 wires through century-old facilities. And Wi-Fi had the additional ability to connect outside buildings as well. Some of the largest active Wi-Fi networks are now installed at campuses such as Stanford, MIT, and Carnegie Mellon.

Like other dislocating technologies, Wi-Fi is now working its way from the office into the home. While home networks are still in their infancy, the benefits of a wireless architecture may be even higher than at the office. For one thing, there's the advantage of not having to string wires across rooms. But Wi-Fi also becomes important as the home entertainment center increasingly links with the PC. And with a Wi-Fi network at home, users are able to take a laptop from work, lay it on the kitchen table, and be online instantly.

From the home, we move to public access spaces. Working with companies like Wayport, MobileStar, and Airwave, hundreds and hundreds of airports, hotels, and even restaurants are rolling out Wi-Fi access. On Jan. 3, Starbucks and Microsoft announced that in early spring each coffeehouse would begin offering Wi-Fi access for its patrons. Soon, Wi-Fi access may be like Visa: "anywhere you want to be." Once again, the compelling issue is portability. You can carry one computer from work to home to the airport and even to Starbucks, and always reach your data.

Some startups have the even broader ambition of rolling out Wi-Fi access through major metropolitan communities by installing access points on rooftops. This kind of implementation would strain the limits of today's technology, and business models in this space are specious at best. Still, for some areas the rollouts can come sooner rather than later: Downtown Palo Alto is not much different from the Stanford campus when it comes to size and geography. And with the opportunity to be part of the "next big thing," I am sure that many ventures will attempt to solve the business-model problem.

The potential for all of this is huge: Frost & Sullivan forecasts Wi-Fi manufacturers' revenues of $884 million by 2002, and Cahners In-Stat Group suggests that more than ten million Wi-Fi products will be installed by the end of this year (Dell laptops already ship with Wi-Fi embedded). I will go out on a limb and say that a 200-million-unit market in ten to 15 years is not unrealistic, primarily because of the pervasiveness of the technology and the ability to provide access at almost every physical destination in the world. Perhaps cellular carriers should be concerned about the impact on the need for 3G services if Wi-Fi access is this readily available.

Skeptics point to many unsolved challenges, including the recently announced security breach in Wi-Fi's encryption protocol. Other issues include congestion, interference, and the lack of a billing or roaming infrastructure. Still others point to the emergence of Bluetooth, or of other home LAN protocols with superior technologies. Don't be fooled. The history of technology has proved again and again that if a certain open architecture gains escape velocity, there is no turning back. The cost declines brought on by ramping up unit volumes alone are enough to thwart any competitive threat.

Wi-Fi has all the makings of a pervasive, explosive technology: huge growth, a strong value proposition, multiple and expanding uses, industry standardization, and global standardization. The technology's flaws are nothing more than a speed bump, given the billions of dollars of R&D already poured into this space. Last and most important, there is plenty of running room as we move from the corporation to the home to the campus to the airport to the hotel and potentially to a citywide, maybe nationwide, level. This truly is the next big thing.

J. WILLIAM GURLEY is a partner with Benchmark Capital, a venture capital firm. Except as noted, neither he nor Benchmark has a financial interest in the companies mentioned. To receive an expanded version of Above the Crowd, visit www.news.com, or to subscribe to the e-mail distribution list, please enter your address at http://www.benchmark.com/about/bill.html. Feedback may be sent to atc@benchmark.com.