According to Yankee Group estimates, over 30 percent of PC–owning U.S. households are interested in the concept of home networking. Several trends, however, contribute to the growing need and the potential success or failure of home-networking solutions.

The Changing Face of the Workplace

The Internet elicits many changes in the workplace. These changes, in turn, create a growing need for home networks. Driven by a changing corporate culture, cost-cutting measures, and clean-air acts that demand less travel to and from work, many employers have implemented telecommuting practices. To implement these practices, information technology (IT) managers must not only connect telecommuters to the corporate local-area network (LAN) and intranet but provide voice solutions as well. To conduct business properly, telecommuters must access files and stored network information and therefore require a high-quality, secure voice network able to sustain multiple lines. According to Telecommuting America, between 1995 and 1997 the number of home-based telecommuters grew more than 30 percent to 11.1 million. That number increased another 40 percent to 15.7 million in 1998. If such trends continue, the need for reliable home-network solutions will increase even further.

Also experiencing growth are small businesses, many of which begin in the home. According to Forrester Research, more than 13 million households—12.6 percent of all U.S. residences—contain a business. Projections indicate that 14 percent of U.S. homes will include some type of home business by the year 2003. These start-ups need small-business solutions that work well in a home environment.

PC–Based Households

Yankee Group research indicates that 43.1 million or 44 percent of U.S. households now have a PC. Of these, 9.4 million have two PCs, and 3 million have three or more. The percent of households with PCs is projected to grow to 54 percent in 2001, with the portion of multi–PC households growing to 24.5 percent.

Multi–PC penetration is driven by a number of factors. The widespread availability of PCs for less than $1,000 and the increasing number of home offices and individuals who bring work home contribute to the trend. Many analysts believe that these factors will drive the number of homes with PCs even higher than current forecasts. Such analysts also believe that multi–PC penetration rates will grow more rapidly than overall PC adoption.

In addition, demand for Internet access in the home continues to climb. According to the Yankee Group, 22 percent of U.S. households subscribe to an on-line service or an Internet service provider (ISP). Many of these households also purchase additional PCs and telephone lines dedicated to Internet access.

Managing Smart Devices

The American home is also changing. Now in the process of development is an increasing number of smart devices that allow users to control and monitor events in consumer-based appliances, home electronics, and home-security systems. Indeed, 1999 will be the first year that non–PC central processing unit (CPU)–powered devices such as computer games, phones, personal digital assistants, set top boxes, and other consumer goods will surpass PCs in number of units shipped (see Figure 1).

Figure 1. Post–PC Devices

As these devices become more common, the need will increase for a home-networking strategy that will allow all data, voice, and smart devices to be accessed at any time from anywhere.

Simplicity and Reliability Are Essential

Whatever the trends, the key market drivers for home networking are simplicity and reliability. If the process is not maintenance-free, easy to use, and quick to install, it will not likely be embraced. While consumers desire the sophisticated functionality of an LAN—voice networking, shared Internet access, and smart device control—they do not wish to engineer or administer a complex system. They want plug-and-play functionality, believing that only experts require technological know-how and that—much like telephones—PCs should just work.