Is There Value For Solution Providers In Entering The Home Networking Market?

The top manufacturers don't get it when it comes to understanding these two markets and how to drive market-share in them. They never have and, quite frankly, I don't think they ever will.

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ROBERT FALETRA

Can be reached at (516) 562-7812 or via e-mail at [email protected].

Sorry, Microsoft, IBM, HP, Compaq, Cisco, Dell and a dozen others, but the penetration you have made in these markets has come in spite of your efforts.

In the case of my friends at Dell, they simply classify small businesses as those with 1,000 employees or less so they can say they have a substantial share of that market. Let's be clear: Small businesses don't have 500 employees or even 200, for that matter. In fact, at 100 employees,the federal cut-off number,you are pushing the envelope by calling it small.

According to the most recent government data, there are 5 million U.S. businesses with 20 or fewer employees. That's the true small-business market. There are 495,000 companies with between 20 and 99 employees, 80,000 companies with between 100 and 499 employees and only 8,000 that have somewhere between 500 and 999 people working for them.

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Luckily for those true small-business owners, the channel understands this market and is quite capable of servicing it. It's why the white box is so pervasive in smaller companies.

The top vendors, of course, have never really understood that to gain share among small businesses they have to gain share in the solution provider channel.

Whenever I walk into a small business, I always take a peek to see what type of system they are running. In my unscientific sample, I'd say that better than 70 percent of the time it's a white-box platform with customized software.

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'There is real opportunity for solution providers to install networks for homeowners who have multiple PCs. Installing a small peer-to-peer network still is well beyond the capability of the average home user.'

Small-business customers are being serviced, but it's the solution provider that is making it happen.

The home market is also a huge opportunity that is only going to grow. But it's a wide-open market that is not being serviced well by either the channel or the manufacturer.

It's also an opportunity that is advancing but still being held back by the broadband suppliers.

Access to broadband service,be it via cable or DSL,is not happening fast enough. More importantly, the cost is rising when it should be falling. Instead of driving down the price to increase use, cable television companies that offer Internet access and the phone companies that offer DSL service are raising their rates.

Those issues aside, there is a real opportunity for solution providers to install networks for homeowners who have multiple PCs and want to share broadband access. Installing a small peer-to-peer network in the home still is well beyond the capability of the average home user.

D&H Distributing, which has always concentrated on servicing computer retailers and solution providers that dance around the home market in areas such as complex video and sound systems, is seeing a growing interest in home networking.

The wireless products now available are making it more affordable to install networks by eliminating the need to run cabling everywhere.

A number of solution providers that service small businesses are beginning to go after the home-networking market aggressively. They are driving demand simply by advertising that their services are available. It's a growth market you may want to consider.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at rfaletra @cmp.com.