IDC: Technology Continues to Spark Home Offices

The growing number of households with home offices is boosting the use of sophisticated IT products and advanced telecommunications services at home, according to a report from International Data Corp.

The report, entitled "U.S. Home Office Forecast and Analysis: 1999-2004," noted that, while 52 percent of U.S. households had a personal computer at the beginning of the year, the home office share reached 78 percent, IDC said Friday.

The number of houses with home offices is approaching 37 million and will near 39 million in the next two years, according to IDC.

"Home offices are growing at 6.2 percent" over the five-year period from 1999 to 2004, Mary Porter, senior research analyst with IDC's home office and small business program, said.

The strong economy has been and will continue to be a major factor in the increase of home offices, Porter said. "The strong economy in the past several years tends to promote the adoption of all types of work at home, and the tight labor market causes employers to offer telecommuting and other perks for recruiting and retaining workers," she said.

Porter also cited the greater availability of high-speed Internet access, which has enabled those working at home to have the same technological perks as those working in the office.

The number of home offices with Internet access rose quickly from 26 percent at the end of 1996 to 81 percent at the end of 1999, and is expected to reach 92 percent by 2004, according to a previous report from IDC. [See "IDC: Home Office Internet Use on the Rise," July 24.] IDC also expects Internet access spending in home offices to reach US$6.6 billion in 2003. Other technologies whose use is growing in home offices include mobile devices, such as cellular phones, according to Porter.

The study broke home office into two main categories.

The first category is corporate home offices. These home offices are used by telecommuters who work at home at least part-time during business hours, or by corporate employees who do work after hours at home. The second category is income-generating home offices. These are used by people who have a home-based business at which they work either on a full- or part-time basis.

The number of income-generating home offices will rise from 18.8 million in 1999 to 21.8 million in 2001, while corporate home offices will rise from 27.8 million to 30.5 million. IDC notes that, because households may have more than one home worker, they can be counted in more than one category.

The number of home offices began to grow in the 1980s, when corporate restructuring led many to start their own home-based businesses, Porter said. The second stage, in the 1990s, was spurred by lower PC prices, which allowed home-based businesses to leverage technology. In the third phase, currently under way, home-office workers are seeking the same conveniences afforded their corporate counterparts in terms of Internet access and networking technology.

The problems for the IT department at the corporations setting up workers at home include having to develop special resources for teleworkers, improving VPNs (virtual private networks) and having extra help desk support, Porter said.

"(But) that's less of an obstacle than it was years ago. IT managers have more tools at their disposal, and it's more economical now," she said.

The study comes from an annual survey that has been conducted for 15 years covering the work at home market of 4,688 households, and it focuses on home office activities and technology product uses, Porter said.

IDC is a subsidiary of International Data Group Inc., the parent company of IDG News Service. IDC, in Framingham, Massachusetts, can be contacted at +1-508-872-8200 or at http://www.idc.com/.

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