Supplying The Virtual Home Office: Markets for Equipment Supplies and Services

Report Highlights

• The number of individuals working in virtual home offices will increase by 15.1 million during the next five years, reaching 59.1 million.
• Spending on IT items by virtual home office employees reached $72.1 billion in 2002. Interest in this work style will continue to be strong during the next five years.
• Networking technology will continue to comprise the largest segment of the total market as it grows at an average annual growth rate (AAGR) of 2.5%. Rising interest in broadband IP services will be a major contributor to increased sales in this market segment.
• Hardware sales will grow, but only at an AAGR of 1.6% through 2007. Intense competition and low growth rates will force suppliers to compete more on price and functionality.
• Collaboration applications (voice over IP, conferencing systems, security products) will grow rapidly to reach $6.71 billion in 2007.

INTRODUCTION

Because of recent advances in computer and networking technology, processing power has enabled the end user to work with complex images on desktop computers, examine large spreadsheets on laptop systems, and exchange e-mail messages with handheld devices. Networking technology has progressed so these tasks now are completed in a variety of locations: central offices, small branch sites, and even homes. By outfitting employees with the proper tools, companies are able to construct a workplace where information flows freely, decisions are made quickly and revenue grows steadily.

Conscious of the ability to maximize their resource base irrespective of geography, many companies are adopting the virtual home office workplace model. This report examines the purchasing patterns of that employee segment. It defines who these users are and what differentiates them from other types of employees. It identifies the various forces sparking additional implementations of this work style. The report also outlines types of hardware, software and networks these employees require.

In sum, this study delineates the most important developments in virtual home office technologies over the past several years by tracing their history, reporting their current status, and outlining their future developments. The report also examines the near-term commercial opportunities and challenges of a number of different technologies and products.

With its ever-expanding nature, the virtual home office market has become a fertile ground for supplier companies trying to expand their customer base and increase revenues. However, identifying and analyzing the market has been difficult, because it consists of three separate groups: small es, telecommuters and remote offices. This report gathers information about these market segments and presents it in a comprehensive analysis. The report, therefore, is pertinent to presidents, CEOs, marketing directors, strategic planners and developers who are hardware suppliers, software vendors, network service providers, systems integrators and resellers.

SCOPE OF STUDY

The report outlines immediate and long-term commercial opportunities for vendors interested in servicing the virtual home office user market segment. Key product segments covered include

• computer hardware (desktop systems, portable devices and peripherals)
• software (collaboration and security systems)
• network services (wireline and wireless services designed for small offices and home offices)

The study also offers:

• crisp explanations of the various technologies supporting these workers
• discussions of the levels of maturity of the different technologies, and steps needed for these products and services to become more common.
• data about past purchases
• new user requirements
• perspectives of key industry insiders and sales forecasts and projections through the year 2007.

METHODOLOGY AND INFORMATION SOURCES

Preparation of this report involved in-depth study and critical analysis of published data from a wide variety of government and private sources. Industry projections have been made by BCC based on original studies of economic, social and demographic information, as well as on critical examination of projections based on industry analysts and those found in public sources.

Information included in the report comes from primary BCC research, input from key suppliers in the various market segments, and government reports from organizations such as the U.S. Census Bureau and Small Administration.

ANALYST CREDENTIALS

Paul Korzeniowski has been writing about information technology (IT) issues for more than two decades. His work has appeared in a number of publications, including Investors Daily, eWeek, Network World and Information Week. His articles have discussed all types of computer, network and software products and services from mainframes to handhelds, ERP systems to collaboration tools, and dial-up links to optical transmission systems. In addition, he has worked for a number of vendors and produced items, such as white papers, case studies, and market research studies. His e-mail address is paulkorzen@aol.com.