Hotspot maker Ruckus Wireless, however, has developed a kind of ad-hoc security system for open hotspots, which it plans to release next week with the next version of its access point management software. Called Open Secure Hotspot, the technology automatically generates encryption keys for any user who logs into an open Ruckus hotspot, granting them a secure connection within moments, Ruckus VP of marketing David Callisch told GigaOM.

Ruckus started out as a supplier of IPTV wireless streaming nodes and enterprise wireless LANs, over which security measures were much easier to enforce. But as Ruckus’s public access network business grew it found itself supplying more Wi-Fi gear that enterprises and service providers simply wanted open to the public, Callisch said. Those customers didn’t want their open networks turning into playgrounds for Firesheep, man-in-the-middle attackers and other internet nasties, Callisch said, so they pressed Ruckus to develop a secure form of open Wi-Fi.

The rather confusing diagram above details how the security software works, but here’s what it boils down to: Anytime an unknown user connects to an upgraded Ruckus hotspot he or she will receive the option of establishing a secure connection to the network. If the user opts in, Ruckus’s network gateway will generate what Ruckus is calling a dynamic pre-shared key, randomly generated for each device. Users can either input the key by launching an executable file sent by the gateway, or they can manually enter the key into their Wi-Fi settings.

It may not seem like the most elegant way of getting online in a hotel lobby or public square, but Callisch but it’s still a relatively simple process, and it beats the alternative – surfing the internet over a naked connection or installing virtual private network (VPN) software on the fly.

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Ruckus has been a rather hot item of speculation ever since Ericsson scooped up Ruckus’s primary competitor BelAir Networks in February (a story GigaOM broke a month beforehand). Both Ruckus and BelAir have been building out massive outdoor Wi-Fi hotspots grids for wireless, wireline and cable operators around the world, and in many ways Ruckus has been more successful than BelAir. In Japan alone, Ruckus has deployed 100,000 hotspots alone for KDDI, which the operator uses to offload traffic from its cellular networks.

Ruckus also sells enterprise and indoor Wi-Fi gear and it has begun partnering with big vendors like Nokia Siemens Networks to incorporate its Wi-Fi technology into their future heterogeneous network architectures.

We reached out to VP of corporate marketing David Callisch, but he said he could give no comment on the IPO. In previous interviews, though, Callisch said that Ruckus was more interested in remaining a standalone company than be purchased by one of the big vendors. While an acquisition is still a possibility either pre-or post-IPO, Ruckus appears to be sticking to its word.

Update: Ruckus’s S-1 filing paints a picture of rapid growth. Annual revenues increased from $44 million in 2009 to $120 million in 2011, and in the first six months of 2012, Ruckus has already entered $94 million into its ledger. The company turned its first profit of $4.2 million in 2011, and in the first two quarters of 2012 its already recorded a net profit of $24 million. The new company would trade under the ticker RKUS.

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The data usage tracker is exactly what a wireless network finder app should include as it demonstrates the benefits of offloading data from expensive cellular networks to lower priced, or free, Wi-Fi hotspots.

I took an early look at the new software on my iPhone 4S and it couldn’t be simpler to use. You just enter the amount of mobile broadband data your smartphone plan allows, as well as your costs on a per Gigabyte basis. The app also needs to know what day of the month your data plan billing cycle starts. After that, the app tracks both Wi-Fi and cellular usage, providing information on how much money you’re saving through using Wi-Fi.

The tracking information appears in an easy-to-read graph and there’s a constantly updated pie chart showing the percentage of time your iPhone or iPad is using Wi-Fi vs cellular data. The software also projects three metrics for the month, based on your usage history: Total data usage; Cellular usage; and Wi-Fi usage. The savings from using Wi-Fi is calculated through your per Gigabyte broadband cost.

Boingo’s updated app keeps the original features from its 2011 debut, so you can use it to find Wi-Fi hotspots nearby. It also includes a free VPN function for secure Wi-Fi connections. I like the addition of the data usage tracking because it can provide a true picture of data usage on both cellular and Wi-Fi networks. We know that Wi-Fi offload can help reduce cellular network demand, but according to research from Parks Associates, 50 percent of smartphone owners don’t know how much data they use each month.

Sure, you could look at your smartphone bill, but that’s after the fact — when you may have overages to pay — and it’s too late to take advantage of Wi-Fi offloading at that point. A combined data usage tool with a Wi-Fi finder provides the opportunity to proactively avoid overages or bandwidth throttling, helping to save money and give a better mobile experience at the same time.

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The overall price of the low-capacity one week plan is now rising to $15, but customers will pay less per bit: The $15 weekly pass provides 300 MB of mobile broadband. There is also a new middle-tier plan, making for three monthly plan options:

• 1.5GB 1-month pass for $25
• 3.5GB 1-month pass for $35
• 5GB 1-month pass for $50

Current customers have two ways of looking at the changes. The minimum for a prepaid data pass has gone up which may anger some, but the other plans provide enough flexibility for paying less while getting more service. For example: those on the $30/1GB plan can drop down to the new $25 pass while gaining 50 percent more data. Heavy data users ought to be happy as they’ll now get 5 GB per month for their $50; a boost from the old 3 GB limit.

The unfortunate part is that it’s unlikely anyone with a compatible device bought it without a contract. Those MiFis, USB sticks and HSPA+ tablets are far more attractive when subsidized by T-Mobile for lower up-front investments. Still, there’s opportunity to save money, even if you fall into that category. Depending on how far you are into your contract, it could be cheaper to pay an early termination fee for the service and then use these prepaid passes as needed; especially if you tend to use your tablet on Wi-Fi more than on T-Mobile’s data network.

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HetNets have three major components. The first is an umbrella — or macro — network designed to provide ubiquitous mobile broadband coverage. The second is a dense network of small cells that supply enormous quantities of bandwidth in the high-traffic areas its most needed. The final component is a network intelligence that ties those networks together. According to Vestberg, the wireless industry has largely built the first and is actively deploying the second. The network intelligence is still in the works, but it won’t be long before it’s a commercial reality, Vestberg added.

There are already 1.1 billion mobile broadband subscribers globally, traversing networks comprised of millions of macro cells, Vestberg said.  Only a small subset of them are LTE subscribers today, but LTE networks already cover more than 325 million people in North America and Asia.

“We’re at a tipping point,” Vestberg said. “You build the macro networks first, but we’re soon going to have very dense networks of small cells.”

The next step is Wi-Fi, which is already being deployed as a small cell technology globally. Major operators like Japan’s KDDI, Europe’s Orange and AT&T are starting deploy dedicated high-capacity access points to offload cellular network traffic. Hotspots aren’t quite HetNet, but it’s the first step toward building a layer of small dense cells that can supply enormous capacity at low cost, Vestberg said. Ericsson has already gotten a jump on the competition by buying up metro-Wi-Fi vendor BelAir Networks, which supplies hotspot gear for AT&T and many U.S. cable operators.

Wi-Fi will soon be augmented by metrocells and microcells moving that high-bandwidth under-layer off of the unlicensed airwaves onto carriers’ own spectrum, Vestberg said. With those small cells they will be able to pack the total capacity of a macro cell into a tiny radius, and as those small cells multiply they will make once scarce mobile bandwidth plentiful.

The final component — the network intelligence to control it all — will deliver the true promise of HetNet, allowing operators to manage Wi-Fi access points as if they were any other cell and tightly integrate metro-and microcells into their network hierarchies without fear they will interfere with each other or the over-arching macro grid. That technology is already out of Ericsson’s labs and will be available in its forthcoming small cell portfolio, Vestberg said.

“I think North America will be one of the first ones to get there,” Vestberg said. “They’ve already started with Wi-Fi. They will do HetNet on top of that.”

Vestberg cautioned that HetNet is a gradual evolution of cellular topology, not a distinct network unto itself – a carrier won’t suddenly one day turn on a network of 1 million cells. The name “heterogeneous” provides a good clue on these networks will come together – Wi-Fi, home and public femtocells, pico-and micro-cells will be deployed in different stages but will eventually come together to form a larger network whole.

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Hotspot Shield for iOS provides users with a protected gateway that allows them to browse safely on unsecured networks, keeping their passwords, financial information and other data secure. Hotspot Shield provides people with a temporary IP address and encrypts their data so they can browse safely, away from prying eyes. Hotspot Shield is already used by about 10 million people around the world, especially by web users in countries with censorship.

The privacy aspect alone should appeal to users who travel abroad or visit a lot of hotspots. And with the rise of mobile devices, the computing burden is shifting to smartphones and tablets, which are in danger from the same security threats that face their desktop cousins.

But Hotspot Shield is also offering a second service to entice users. It’s got a data compression feature that can cut down data usage by up to half, helping users stay under the data caps that are in use by most cellular carriers. Hotspot Shield compresses all text and images through its servers but doesn’t address video yet. Users can choose between high, medium and low settings to set how much compression is applied, which affects image quality.

David Gorodyansky, co-founder and CEO of AnchorFree said the app has taken a while because of scaling and engineering issues. But he said it comes at an opportune time, as mobile devices are exploding and data caps are being used to constrain network traffic. Gorodyansky thinks the move into data compression made sense, and says it will be just the first of more features added to Hotspot Shield.

“It’s logical step for us because we’re already securing the data stream so it makes sense for us to speed up the traffic and optimize it and make it as beneficial to users as possible,” he said.

Users can try the app for free for seven days, and then subscribe to service for 99 cents a month or $9.99 a year, with one subscription covering multiple iOS devices. AnchorFree is also throwing in two hours worth of free Skype calls for users who subscribe. An Android version is expected later this year.

As I mentioned before, the increasing use of data caps is bringing out a lot more companies touting their data crunching tools. You have to be okay with a company handling your personal traffic, but in the case of AnchorFree, many users already trust it with their data, so the company has a good head start.

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AT&T announced on Tuesday that it’s extending free Wi-Fi to five more New York parks, part of the plan to bring Wi-Fi to 26 locations in 20 parks spread throughout the five boroughs of New York. The new sites are Astoria Park, in Queens; Herbert Von King Park and McCarren Park Field House, in Brooklyn; Tompkins Square Park, in Manhattan; and Clove Lakes Park, in Staten Island.

They join existing free AT&T Wi-Fi installations at Battery Park; Rumsey Playfield; areas of Thomas Jefferson Park, in East Harlem; and Joyce Kilmer Park, in the Bronx, which were all launched this past summer. The park Wi-Fi hotspots complement larger Wi-Fi hot zones that AT&T has built in Times Square and areas around Midtown and are part of AT&T’s nationwide network of 27,000 Wi-Fi hotspots.

As we’ve mentioned, this isn’t just goodwill by a big carrier. These Wi-Fi networks are helpful in relieving traffic from overworked cellular networks. And they present opportunities to advertise as well. Ultimately, carriers will start to plug in Wi-Fi as part of a bigger heterogeneous network that utilizes a range of technologies to provide broader connectivity to users.

With Wi-Fi roaming technology maturing, it will allow users to easily jump onto Wi-Fi networks seamlessly, so they won’t even know when they’re moving between networks. Having a built-out network of Wi-Fi will become a major asset for carriers. So expect to see more hotspots like this pop up, though we’ll have to see if they’ll all be free in the future.

Photo courtesy of Flickr user Ed Yourdon

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Around the globe, In-Stat expects one million hotspot locations available by 2013, and based on the number of publicly available new Wi-Fi networks I’m seeing in my rural backyard, I’m not surprised. Businesses of every size are turning to Wi-Fi not only as a convenience for customers but also as a way to expand foot traffic, advertising opportunities and engagement. Traditional brick-and-mortar stores don’t have the most people on their networks, however. That distinction belongs to transportation hubs and convention centers, where the large crowds account for 30 percent of all Wi-Fi hotspot connects.

Laptop computers are still the No. 1 device for Wi-Fi hotspot use, which makes sense as Wi-Fi radios are standard fare for notebooks. Smartphones and tablets are catching up, however, even though many have integrated 3G or 4G radios. Device owners are apt to take advantage of free or low-cost hotspots to reduce the risk of mobile broadband data overages as carriers migrate away from unlimited data plans. The Wi-Fi connections are often faster and can use less power, which can save battery life on these mobile devices.

Network operators see the benefits of Wi-Fi offload and are likely to aid in the expansion of hotspot locations by partnering with businesses directly or through existing hotspot networks, such as Boingo Wireless. In July, for example, Japanese network operator KDDI said it would build out 100,000 Wi-Fi hotspots by March 2012 that will seamlessly work with the carrier’s WiMAX network. A seamless network transition, in addition to automatic log-in software — similar to Boingo’s current application — essentially turns Wi-Fi into the “other” cell network in this case.

Update: By way of email, In-Stat analyst Amy Cravens offered me additional context to the prediction of one million hotspot locations by 2013, saying there were an estimated 420,000 hotspot venues in 2010 and figures 630,000 by the end of 2011.

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