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Small business networking is big money, says IDCby Nancy WeilBOSTON -- Small businesses will spend nearly $US4.1 billion on network products in 2001, compared to the $US2.5 billion spent last year. The expected growth in that market segment has the full attention of the industry's major vendors, according to IDC research.

IDC forecasts that sales in the small business market for local area networks (LANs) and server products will grow 13.6 per cent annually between now and 2001. A surge in the use of LANs and servers by small businesses has been particularly pronounced in the last two years and has caught Raymond Boggs, director of IDC small business research, by surprise.

Fuelled by Internet

Boggs credits value-added resellers and vendor channel partners for spurring growth, which has also been fuelled by small businesses that have Internet access at the office.

"The VARs have done a great job in building the case (for LANs and servers), getting the product out and then supporting it," he said.

Small businesses typically cannot afford to have network administrators on their staff so they have to rely on vendor and reseller support for service. Such businesses also cannot afford to pay a lot for servers.

"They've got to be affordable. They can't make a $US8000-to-$US10,000 investment in a server, but they can do $US2000 now," Boggs said of servers to support LANs that can be purchased in the $US2000 range -- about the same as a PC.

HP hurt by Asian turmoil

by Chin Wah Wong

MANILA -- Hewlett-Packard expects to see Asian revenues decline as a number of key markets struggle through hard times.

"The regional financial crisis has had a substantial impact on our Thai and Indonesian operations," said Dick Warmington, president and managing director of HP's Asia-Pacific operations.

"Generally, PCs and printers were down. We've lessened the impact by managing it and providing financial cover, which we can do because we are a global company. So that's helped us, but we've seen a slowdown of anywhere from 20 to 50 per cent depending on which products you're talking about."

Warmington also said HP's Korean operations are taking a hit, while the market in the Philippines has also softened.

"Singapore is still strong, and Malaysia is stronger than we thought it would be," he said. "If you pull all that together, instead of growing 20 to 30 per cent, we'll be doing 10 to 15 per cent this year."

He also said HP is trying to reduce its cost of production and minimise inventories of price-sensitive components, mainly processors and memory. HP has begun looking at build-to-order type arrangements in some Asia-Pacific markets such as Australia, China and India.


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