From the December 1997 issue of Entrepreneur

The spotlight on small-business technology isn't going to fade any time soon. In 1998, we'll continue to see technology products for small companies that are cheaper and easier to maintain than the high-end technology geared toward larger companies. While new products and concepts will come and go, here's a look at three major technology trends that will likely shape small business in the coming year:

1. The Internet. Far from the flash-in-the-pan trend that some people predicted, use of the Internet will continue to grow--particularly in small businesses. According to IDC/Link, an information technology research firm in Framingham, Massachusetts, about 75 percent of small companies currently have PCs, and 38 percent of those have online access. That number is expected to grow an impressive 17 percent annually through 2001.

Internet use is mounting as more small companies buy Internet-ready machines. A common belief among entrepreneurs that the Internet, e-mail and online research are becoming standard business practices is also fueling the trend. "Small companies are finding more and more [Internet] resources that can be used to help them run their businesses and boost productivity," says Warren Childs, IDC/Link's research manager for small-business/home office markets.

Small companies that have been using the Internet for some time are relying on it more than ever. Indeed, it's not uncommon for entrepreneurs and their employees to surf the Net several times daily in search of news and business resources. And the amount of time they're spending online is rising as well, says Childs.

Similarly, entrepreneurs' confidence in the Internet is reflected in the swelling number of small-business Web sites. In 1996, only 2.2 percent of small businesses had them; 9 percent will have Web sites by year-end. While that number isn't staggering, Childs believes it reflects a maturing attitude among entrepreneurs that a Web presence can be an effective marketing tool, provide access to new customers and generate sales.

2. Scanners. In the past, scanners were used only by desktop publishing professionals. No more. Small companies and home offices are realizing the benefits of scanning artwork or text into reports, presentations--even Web pages.

"We've seen a real increase in the use of scanners in small businesses and home offices," says Childs. "Many entrepreneurs are using them to scan graphics and build Web pages."

Falling prices have placed scanners within many small companies' reach. What's more, while the quality of some low-cost scanning products was once sub-par, technology vendors have recently released higher-quality scanners that provide the professionalism and functionality required at a price most can afford.

About 17 percent of home offices currently have scanners, says Childs. However, that number is expected to rise to 33.6 percent by 2001.

3. Multifunctional devices. Multifunctional devices (MFDs) that incorporate several functions such as printing, faxing and copying into one compact machine were designed primarily with small businesses and cramped home offices in mind. These machines offer useful features at competitive prices--and many entrepreneurs have begun to see real value in them. (See "Buyer's Guide" on page 55 for more on MFDs.)

"Multifunctional devices are selling strongly in the small-business marketplace," says Childs. "About 14 percent of small companies had them in 1996, and that should reach 32 percent by the year 2001."

These all-in-one devices are proving quite advantageous for home offices and start-up companies on a shoestring budget that just need basic fax, print and copy features at a fair price. As Childs says, "Multifunctional devices are a hot item for small companies."

Contact Source

IDC/Link, (212) 696-8059, wchild@idcresearch.com