We all know the benefits of telecommuting. A range of factors — mobile computing, broadband access, corporate downsizing — has fueled the market for home-based corporate offices and home-based businesses. Now here’s the riddle for managed services providers: Are SOHO customers and home-based executives worth your time and effort to engage? Or are they high-maintenance, low-margin audiences whom you should avoid?
Before you answer the riddle consider some of these variables:
- The home-office market will add roughly 2 million home-based businesses and more than 3 million corporate home offices between 2011 and 2015, predicts. International Data Corp.
- PCs will remain central to home worker productivity, and portable form factors will continue to account for the majority of total annual shipments to this market; the number of notebook-owning home office households will increase by 5.0% annually — the highest growth rate of any home office technology category.
- Single-function printer penetration will continue to decline rapidly, reflecting home office households’ growing preference for multi-function printers and their multiple capabilities.
- By the end of 2015, nearly three-quarters of networked home office households will be wireless-enabled.
- Smartphones are rapidly becoming an indispensable home office asset, and you can bet tablets are moving into the market, too.
- The smallest SMBs with a staff who partially or totally telecommutes are in need of managed telecom services, according to a recent survey from Compete.
- The need to be more productive is translating into extended workdays for professionals, and the number of home office households used by corporate employees to work outside of normal business hours will surpass 27 million at the end of 2015.
“Home office households continue to spend more on advanced technology than households in general,” said Justin Jaffe, senior research analyst for Small and Medium-Sized Business and Home Office Research at IDC. “With economic conditions continuing to improve, these households will continue to lead the way for technology adoption across a variety of categories from notebook computers and wireless networks to mobile phones.”
The IDC study, U.S. Home Office 2011–2015 Forecast: Recovery Drives Interest in IT as Home Office Households Adjust to New Economic Realities (IDC #227268) forecasts the number of different types of home office households along with ownership of desktop and notebook PCs, printers, MFPs, LANs, wireless LANs, and mobile phones in home office households in the United States through 2015. Note: IDC defines corporate after-hours workers as those who take work home from traditional jobs after normal business hours and telecommuters as corporate employees who work at home during normal business hours three days per month or more.
More Data Points
In Q4 2010, Compete conducted a survey targeting telecom shoppers and asked them how often they worked from home and found that one in three employed telecom shoppers worked from home at least once a week. Furthermore, 69% of these shoppers who work from home shopped for internet services specifically because of their work requirements.
Compete also says that currently, no telecom provider specifically targets the small office/home office business segment. Making this overlooked, but potentially lucrative segment even more appealing is 54% of telecom shoppers who work from home found service reliability more important than price.
Naturally, if the big research firms have identified a trend, other entities have taken note, as well. Apparently Cox Communications is considering developing services specifically aimed at small/home office-based businesses, and undoubtedly other telecom providers will follow.
Opportunity Knocks for MSPs
Still, major telecom providers do not typically move at light speed with new services. In addition, their pricing is not generally geared toward small users, and with their attention distracted by the needs of large, multinational clients, the level of service and responsiveness they offer their littlest customers may not be top notch.
What all this means to you, the MSP, is that if you can potentially scale your managed services offerings down to the small/home office segment. But can you make a profit? Keep us posted.
Sign up for MSPmentor’s Weekly Enewsletter, Webcasts and Resource Center. Follow us via RSS, Facebook, Identi.ca and Twitter. Check out more MSP voices at www.MSPtweet.com. Read our editorial disclosure here.
Read More About This Topic
Share This Post
Posted In: Managed Services | Research and Markets
Tags: Managed Services | Professional Services Automation | SaaS
Interact: Add a Comment | Trackback Link | Permalink
Subscribe: RSS Feed
Take a look at our 
I’m a tad late in commenting on this great post…the price for going on vacation and actually leaving the laptop behind…
First, thanks for calling attention to this oft-overlooked segment. From what I’ve heard over the years at trade shows and conferences, most MSPs tend to only take on smaller clients because they need the business, rather than specialize in this growing segment. Logicomm, OTOH, focuses on the microbusiness (MB) market, which, while lucrative, can be difficult to maintain. I can testify to the fact that their needs are very different than the traditional 50-100 headcount client that most MSPs seek, and, as a matter of fact, most MBs prefer on-demand, rather than managed services, at least for the first year or so of a relationship.
That being said, once one can develop a system that can manage so many disparate users and turn a decent profit, it really is a terrific market. It’s just very different…
I’m not sure about the home office market, as we don’t deal in that space, but one of the things we have noticed about the MB group is that they’re loyal, and prefer doing business with fellow small businesses. In the last year, nearly 70% of our new clients previously used cable and telco support services, but found the services too ‘canned’ and unable to meet a unique need.
We’re glad to see the segment’s continued growth. Even with some attrition in the ‘forced’ entrepreneur segment, we also see a great future for IT Support services, even if not managed services by definition, and enourage others to look at the segment as well.
Jim Van
Logicomm
http://www.logicomm-inc.com
Jim,
Your strategy proves that there’s more than one way to succeed in managed services. I spoke with an MSP last night who refuses to deal with SMBs that have 10 or fewer employees because those micro businesses sometimes need extended hand-holding that eat into MSP margins. On the flip side, it sounds like you’re making a healthy living serving the very customers that this other MSP avoids.
Please let me and MSPmentor’s readers know how the strategy evolves in the months ahead.
-jp