Growth in network hardware and services continues to grow among enterprise-class businesses, but the growth of small businesses and home networks is accelerating even faster. That provides an opportunity for both sales and ongoing service for value-added resellers able to operate efficiently enough to profit by serving very small customers.
Spending on network hardware should reach $10 billion by 2011, and the total value of networked entertainment, data, storage and communications devices for consumers will grow to over $85 billion by 2011, according to ABI Research of Oyster Bay, N.Y. Individuals are purchasing an array of network devices — routers, modems, media servers, media adapters and broadband connections — to network their varied devices.
The "connected home" is an environment that lets users share computing resources, and blend communications and entertainment technologies. It's actually an evolving concept that was sparked about six years ago when people began to aggressively adopt broadband for home Internet connectivity. Broadband gave people enough bandwidth to share among multiple PCs, which naturally led to the desire to share files and peripherals such as printers or entertainment devices.
Today's home networks increasingly include other non-traditional items such as televisions and telephones, said Malachy Moynihan, vice president and general manager of the Linksys Home Networking Business Unit. Voice over IP is becoming more popular, thanks to the efforts of companies like Vonage and Earthlink.
More homes are expected to require more networks, according to a study by Strategy Analytics, a Boston-based research firm, which found that 14% of digital home devices sold this year will be IP-enabled. Consumers are expected to continue to spend more on those products that will improve their access to content and quality entertainment, according to Peter King, director, Connected Home Devices research.
Vendors are making it easier with the creation of plug-and-play network products, such as ZyXel Communications' recent release of the PLA-400, a HomePlug AV Powerline Ethernet adapter with an MSRP of $94 (to ship in November) and the PLA-402, HomePlug AV PowerLine and coaxial Ethernet adapter, for $114. Sold through the Anaheim, Calif.-based developer's channel partners and retailers, ZyXel's solutions feature throughput of 200 Mbps, and can connect via either home electrical outlets or coaxial cable.
"No one wants to drill holes or lay cables or tinker with complex configurations, or suffer from poor security," said Chano Gomez, vice president of technology and strategic partnerships, as well as director of the U.S. office of DS2, a developer of broadband over PowerLine (BPL) and high-speed PLC applications, with headquarters in Valencia, Spain. "Ethernet, coax, wireless, phone line, power line… the choice for home networking is limited only by the performance of the communications media available. However, performance and availability vary greatly among the technologies on the market for each of these media."
The VAR Home Networking Market: