Small businesses will spend nearly $US4.1 billion on network products in 2001, compared to the $US2.5 billion spent last year and the expected growth in that market segment has the attention of the industry's major vendors, according to IDC research.
IDC forecasts that sales in the small business market for local area network (LAN) 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 caught Raymond Boggs, director of IDC small business research, by surprise.
"It was amazing," Boggs said. "I actually had to rerun the data because I didn't believe it."
IDC surveyed 450 small business LAN owners and 50 more companies that plan to move to LAN systems in the next 12 months.
Based on survey findings, IDC predicts that 2.3 million small businesses will have LANs by 2001, for an annual growth rate of 15.8 per cent. The number of PCs networked by small businesses will reach 17.8 million by then for growth of 17.1 per cent yearly. More than half of the businesses with 20 or fewer employees in the survey already use servers.
Boggs credits value-added resellers and vendor channel partners for spurring growth, which also has 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 staffs and 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 an $US8000-to-$US10000 investment in a server, but they can do $US2000 now," Boggs said of servers to support LANs that can be purchased in the $US2,000 range -- about the same as a PC.