(Investor's Business Daily; 06/10/98)
Enter a typical home office these days and you'll find more than
just a
rolltop desk.
These offices boast the latest in computers and peripherals. SOHO -
or small
office/home office - workers often use more-powerful PCs than their
corporate
counterparts, analysts say.
"When they're buying a new system, they tend to view it more as an
investment, since they're relying on it for a wider range of uses,"
said Chris
Pedersen, worldwide consumer PC brand manager at Hewlett- Packard Co.
Even networking equipment - until recently the province of large
companies -
is becoming a SOHO staple.
Here's a typical SOHO workspace:
Personal Computers
Sub-$1,000 PCs are creating a buzz at large and midsize companies.
But in
small offices, more-expensive equipment still reigns.
The reason, say analysts, is that small offices often lack the
service
support of companies with information-technology specialists. And
workers don't
want to have to upgrade their PCs, so they often buy the best.
"No question, home offices are high-end PC buyers," said Bill
Ablondi, an
analyst at Framingham, Mass.-based International Data Corp. "Even with
the rage
of sub-$1,000 PCs, their typical PC setup is $2,500 to $3,000."
SOHO shoppers are looking for Pentium II microprocessors with speeds
of at
least 300 megahertz, HP's Pedersen says.
"And they'll be looking for enough hard-drive capacity so they won't
have to
diddle with screwdrivers and tools," he said. "Because if you're doing
business on your PC, time is money."
In offices with three or more personal computers, though, cost
becomes more
of an issue. At that point, it's less necessary for every PC to be high
end.
Those offices might be better served buying some sub-$1,000 computers,
industry
observers say.
Peripherals
Color inkjet printers have supplanted laser printers as the choice
for most
home offices. Their print quality has improved tremendously, while
prices have
dropped to $200 or so. Inkjets are good enough that SOHO workers can
use them
to reproduce photographs or print brochures.
Laser printers still have a place, though. Offices that need to
print lots
of copies of documents still rely on monochrome lasers. Color laser
printers,
though, are rare. They cost more than $2,000, and their print quality
is only
marginally better than that of color inkjets.
The multifunction device has emerged as a staple of small offices.
These
machines - such as HP's OfficeJet - print, fax, copy and scan
documents. Low-
end models are available for $300 to $400.
Many SOHO workplaces lack networks. That often makes removable
storage
crucial. Users need a storage medium to put their files on, so that
they can
transfer them to other PCs. Multimedia files are often too big to fit
on
ordinary diskettes, so devices such as **Iomega** Corp.'s **Zip drive**
are
becoming more common.
Some new peripherals could become essential. Andy Bose, president of
research firm Access Media International Inc., sees video phones
gaining
popularity. These devices use the Internet to transmit the image of the
caller.
Other analysts wonder, though, if seeing a caller's face is that
crucial.
Networking
Once a SOHO has a couple of PCs, a printer and maybe a scanner,
linking
those devices increases their usefulness. That's where networking
enters the
picture.
The biggest networking firms - Cisco Systems Inc., 3Com Corp. and
Bay
Networks Inc. - as well as chipmaker Intel Corp., have targeted the
consumer
and SOHO markets this year.
The tried-and-true networking method is some cabling and network-
interface
cards, or NICs, to connect PCs to a network, including networks for
small
offices with as few as three or four devices.
PC makers have made the job easier by installing networking chips
directly
onto a computer's motherboard, the brains of a PC. Also, NICs come
preinstalled
in many PCs, says Kerry Langstaff, director of small-business
marketing for
3Com.
Companies like 3Com, Bay and Cisco are making more low-end hubs, as
more
small offices and home offices network. They're scrambling to make
their
complex technology cheaper and easier to use.
If there are fewer than four PCs or peripherals, then cables will
directly
connect the computers. No NICs are required, Langstaff says.
With more than four PCs or devices, though, networking becomes more
complex.
A server computer is needed to dole out software and files. The server
can
also serve as a "normal" PC for your small office, but it must be
equipped
with a little more power and memory because it transfers and holds so
much
more data. PCs and peripherals plug into a networking hub, and NICs
are
needed. Three PCs can be networked in this fashion for less than $300.
If that's too complex, then telephone lines could make it easier.
Advanced
Micro Devices Inc. plans to have a new chip by year's end that will use
a
home's telephone wires to network PCs and peripherals.
AMD is working with Pleasant Hill, Calif.-based Tut Systems Inc. to
develop
a homenetworking product called HomeRun. At one megabit a second,
HomeRun will
move data 20 times faster than 56-kilobit-per- second modems.
Putting the telephone wires to work is a good way to go, says Bob
Merrit, an
analyst with Phoenix-based Semico Research Inc. No new wires need to
be laid,
and the networking product won't interfere with existing phone service.
The Internet
Once a small office is networked, it's time to connect to the
biggest
network of all - the Internet.
Top modem contenders are 56K, cable and digital subscriber lines, or
DSL.
ISDN, while speedy, doesn't appear to be gaining acceptance.
Standards for 56K technology finally were hammered out in February.
Analysts
expect the standards to boost consumer sales because the modems and
corresponding technology will be compatible, no matter who makes them.
But cable modems could leave 56K in the dust.
"The really cutting-edge small office has a cable modem," said Kate
Delhagen, an analyst with Forrester Research Inc. in Cambridge, Mass.
"It frees
up the telephone line. They provide fast Internet access, and they're
always
on." Unlike 56K modems, which can be bought at the local computer
store, cable
modems are offered by cable companies to subscribers. The technology is
beginning to emerge from test areas to wider use.
Cable's competitor could be DSL. This technology untwists a
telephone
system's copper wire to boost speeds to a level 30 times faster than
56K
modems.
DSL modems are in trials and are expected to become more prevalent
next
year. Telephone companies will be the ones to sell the DSL modem and
service.
Software
What software is necessary to run a small office? Like corporate
workers,
small businesses frequently rely on a "suite" of applications, such as
Microsoft Office. These packages include spreadsheet programs and word-
processing and presentation software.
SOHO users typically are most interested in programs that store
mailing
lists and sales contacts, IDC's Ablondi says. PCs that are designed for
the
SOHO market often come with plenty of software included. It's rare,
though,
that these programs exactly fit your needs, HP's Pedersen says.
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