Download - Putting the Home Network
-
8/6/2019 Putting the Home Network
1/12
Putting the Home Networkto WorkA Parks Associates White Paper
Author: Kurt Scherf 2005 Parks Associates
-
8/6/2019 Putting the Home Network
2/12
Putting the Home Network to Work
2005 Parks Associates
Attribution and Disclaimer i
Attribution
Authored by: Kurt ScherfPublished by Parks Associates
June 2005 Parks AssociatesDallas, Texas 75230
All rights reserved. No part of this book may be reproduced, in any form or by any means,without permission in writing from the publisher.
Printed in the United States of America.
DisclaimerParks Associates has made every reasonable effort to ensure that all information in this report is
correct. We assume no responsibility for any inadvertent errors.
-
8/6/2019 Putting the Home Network
3/12
Putting the Home Network to Work
2005 Parks Associates
Table of Contents ii
Table of Contents1.0 The Stages of Home Networking ..................................................................................... 1
2.0 Why the Need for Managed Services? ............................................................................ 2
3.0 What Vexes the Home Computer User?......................................................................... 3
3.1 Security and Home Computer Performance Issues ........................................................ 53.2 Home Networking Challenges........................................................................................ 6
4.0 The Opportunities for the Industry ................................................................................ 7
-
8/6/2019 Putting the Home Network
4/12
Putting the Home Network to Work
2005 Parks Associates
List of Figures iii
List of FiguresFigure 1 What Content is Shared in a Home Network?................................................................. 1Figure 2 Home Networking Stages: Key Applications.................................................................. 2Figure 3 Percentage of Internet Users with Digital Content Stored on a Home Computer/Other
Hard Drive .............................................................................................................................. 3
Figure 4 Home Computers and Data Network Solutions in U.S. Households .............................. 4Figure 5 Overcoming Hurdles: Home Computer and Home Network Use................................... 5Figure 6 Problems Associated with PC Use: The Role of Viruses and Spyware .......................... 6Figure 7 Who Helped Fix a Problem Associated with a Home Network? ..................................... 7Figure 8 Opportunities within each Stage...................................................................................... 8
-
8/6/2019 Putting the Home Network
5/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 1
1.0 The Stages of Home Networking
A key factor to consider regarding the rapid adoption of home data networking equipment since
1998 is the very practical purpose that these solutions have and continue to serve in the vast
majority of U.S. households. Although the industry is quite keen to sell next-generation home
networking equipment to link home computers to consumer electronics platforms (multimedia
networks), the main benefit to consumers remains the ability to access broadband Internet access
from multiple locations in and around the home (see Figure 1).
What Content is Shared in Home Networks?(Broadband Networked Households)
19%
22%
33%
41%
53%
91%
26%
33%
62%
72%
90%
n/a
0% 25% 50% 75% 100%
Games
Video
Music
Photos
Documents
Internet access
Percentage of Households with Home Networks (%)
Q4 2004 (n=542) Q4 2003 (n=989)
Sources: Broadband Networked Households , 2004 Parks
Associates; Profiles of PC Usage 2005 Parks Associates
Figure 1 What Content is Shared in a Home Network?
The use of a home network as a broadband-sharing mechanism is just the first stage of several in
the evolution of home networking. Both consumers and broadband and applications carriers will
find benefits as connectivity expands beyond shared Internet. For consumers, shared multimedia
content (music, photos, and video) from both home computers and other storage platforms will
drive them to seek digital media adapters, either stand-alone or integrated with other platforms
such as set-top boxes. For carriers, the deployment of home networks now is a service
differentiator and a customer loyalty measure. However, the carriers will seek to monetize their
customer premise equipment (CPE) deployments by tying them into additional services, notably
voice and multimedia. We expect to see them deploy residential gateways (RGs) as part and
-
8/6/2019 Putting the Home Network
6/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 2
parcel of their next-generation voice services and for multiroom video applications. As the telcos
in particular become more aggressive in offering music and video services to supplement their
broadband and voice offerings, look to them to seek residential gateways that support multiroom
distribution of this content. Figure 2 provides an overview of the stages of home networking
deployment.
Home Networking Stages:
Key Applications
Stage 1: Shared broadband Managing the network
with software, securityapplications
Stage 2: VoIP applications
Carrier-deployed CPE Limited multimedia andentertainment networks
Additional storage
Stage 3: Media servers deploy ingreater numbers.
Mobile-to-fixed voice
convergence through CPE
Figure 2 Home Networking Stages: Key Applications
2.0 Why the Need for Managed Services?As residential and portable technology solutions provide end users with new ways in which to
access and share content, they likewise create new challenges. Home computer hard drives often
fail, home networking solutions are in many cases not as easy to install as advertised, and
printers sometimes fail to print!
For a great many consumers, dealing with these problems has often been a case of manifest
destiny insofar as they have fixed them on their own or sought the assistance of a technically
minded friend or family member. However, we are entering an era in which consumers will have
new software solutions and professional support to provide an enhanced level of home computer
and home networking monitoring, maintenance, and support. There exist a number of drivers for
the growth of these solutions:
1. The segment of consumers with multiple computers and a home network to link a single
broadband Internet connection has now surpassed the definition of early adopters. Theseconsumers are less technically proficient than the very early market for connectivity, andthey may simply not have the time or desire to provide IT support for their home.
2. For end users, the stakes of technological catastrophes such as hard drive failures growsignificantly as they rely on their home computers to function more as media servers. Inaddition to storing productivity content (finances, addresses, etc.), home computers areincreasingly serving as entertainment hubs platforms to which consumers are
-
8/6/2019 Putting the Home Network
7/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 3
downloading photos, music, and video (see Figure 3). To lose an entire collection of thisinformation is more than merely inconvenient; the loss of personal memories through a harddrive crash, theft, or other household disaster (flood, fire, etc.) can be heartbreaking.
3. Companies providing home networking products and broadband services are examining waysin which they can reduce the complexity of these services in order to mitigate potentialcustomer service challenges, such as increased calls to customer support centers.
Percentage of Internet Users with Digital Content
Stored on Home Computers/Other Hard Drives(n=2,682 PC users with Internet)
84%
59%
36%
26%
17%
0%
25%
50%
75%
100%
Movies and TV
shows
Personal videos Video clips Music Digital pictures
Type of digital content
PercentageofInt
ernetUsers(%)
Source: Profiles of PC Usage , a survey of 2,682 U.S. PC Users with Internet
2005 Parks Associates
Figure 3 Percentage of Internet Users with Digital Content Stored on a Home Computer/OtherHard Drive
This white paper examines the challenges that face home users of computers, the Internet, and
home networks and provides insight into how the industry is addressing the need for improved
management, monitoring, and maintenance services and solutions to home users.
3.0 What Vexes the Home Computer User?Depending on the number of home computers owned and the manner in which they are
configured (i.e., are they networked?), consumers are going to experience different issues as theyuse them. PC households without a home network (an estimated 61 million at the end of 2004, as
Figure 4 indicates) are obviously not going to experience networking problems. On the other
hand, households with a data network used for Internet connectivity for at least one home
computer may experience connectivity challenges or glitches associated with the home network
-
8/6/2019 Putting the Home Network
8/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 4
itself (interference affecting the performance of a wireless solution, the inability to connect
devices and resources such as shared drives and printers, etc.).
U.S. Households with Home Computers
and Data Network Solutions
(Millions of U.S. Households, year-end 2004)
Households
without a data
network, 60.8
Households with
a data network,
18.2
Source: Home Networks and Rsidential Gateways: Analysis and Forecasts
2005 Parks Associates
Year-end 2004:Parks Associates estimates that 79
million (73%) of U.S. households hadat least one home computer.
Figure 4 Home Computers and Data Network Solutions in U.S. Households
The potential problems facing todays home computer and home network user are listed in
Figure 5. These challenges can be grouped in three basic categories: those facing all home
computer users; those associated with the setup and configuration of a home data network; and
those that refer to more advanced home and public network use (such as setting up shared
resources, managing port functionality for such applications as multiplayer gaming, and ensuring
that security settings are established for both private and public networks).
-
8/6/2019 Putting the Home Network
9/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 5
General PC/Internet Use
Viruses
Spyware
Establishing limits andcontrols for childrens
Internet use
Managing performance
utilities (disk scan, disk
defragmentation, etc.)
Backing up content
Overcoming Hurdles:Home Computer and Home Network Use
Home Network Set-up
Installation and
configuration for all devices Establishing security
settings
Home Network Use
Troubleshooting (the
network has gone down)
Resource sharing (printers,drives, etc.)
Router port management
Ensuring seamless
connectivity and establishing
secure connections for bothprivate (in-home) and public
(hot spot) networks
All Home Computer Users Home Network Users
Figure 5 Overcoming Hurdles: Home Computer and Home Network Use
3.1 Security and Home Computer Performance Issues
The problems that consumers are experiencing with their home computers are also related to
maladies coming from the Internet. As Figure 6 illustrates, home computer owners with Internet
access at home are significantly more likely to have experienced problems related to computer
performance if they also reported problems with computer viruses or spyware in the last 12
months. Executives at Best Buy and CompUSA, who provide in-store and in-home computer
installation services, indicate that the proliferation of Internet viruses and spyware is a significant
reason that their services business are growing rapidly. Best Buys Geek Squad, for example, is
expected to expand services to 45 markets and 425 stores by August 2005.1
1 Best Buy 2004 Annual Report
-
8/6/2019 Putting the Home Network
10/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 6
Problems Associated with PC Use:
The Role of Viruses and Spyware
13%
28%
55%
79%
21%
34%
60%
89%
17%
33%
61%
89%
Hard drive
failure/lost files
PC lock up
Loss of Internet
connection
Pop-up ads
Percentage of Respondents (%)
Consumers reporting spyware (n=1,440)
Consumers reporting viruses (n=1,127)
All Internet households (n=2,682)
Source: Profiles of PC Usage , a survey of 2,682 U.S. PC Users with Internet 2005 Parks Associates
54% of home computer users have reported a
spyware issue in the last 12 months;
42% of home computer users report a virus
problem in the last 12 months
Figure 6 Problems Associated with PC Use: The Role of Viruses and Spyware
3.2 Home Networking Challenges
Data networks are certainly a success story. Penetration of connectivity solutions for sharing a
broadband connection between a modem and one or more home computers has grown from 2.5
million U.S. households at the end of 1998 to more than 18 million U.S. households at the end of
2004. Consumers have clearly embraced these solutions, particularly those using Wi-Fi foruntethered connectivity. At the end of 2004, approximately eight million U.S. households were
using wireless solutions.
The success of home networks also presents new challenges to both developers of customer
premise equipment (CPE) and broadband service providers deploying home networks as
integrated residential gateway (RG) solutions. As reported by many companies, return rates for
home networking equipment are as high as 20%, and some customers still struggle with basic
configuration and setup or experience frustration with connectivity issues (lack of range withwireless networking products, for example). As Figure 7 indicates, the broadband service
provider is often the first call that consumers make when attempting to fix a home network issue.
With customer support costs estimated at anywhere from $7.50 to $15.00,2 the costs to
2Source: Service Excellence Research Group
-
8/6/2019 Putting the Home Network
11/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 7
broadband carriers for home computer and home network-related issues could be enormous an
estimated $700 million to $1.4 billion in a year!3
Who Helped Fix Problems Associated with Home Networks?(n=219 networked users with problems)
5%
7%
8%
17%
21%
22%
22%
31%
Not Sure
Retail store of equipment
PC/ home networking professionals
Home network equipment manufacturer
None of these
Family members
Friends
Broadband Service provider
Source: Profiles of PC Usage , a survey of 2,682 U.S. PC Users with Internet
2005 Parks Associates
27% of current home
network users havereported problems with
their data network.
Figure 7 Who Helped Fix a Problem Associated with a Home Network?
4.0 The Opportunities for the IndustryGiven the challenges that consumers are facing with home computers, Internet services, and
home networks, we anticipate significant interest among both home network OEM players and
broadband carriers in deploying a host of more advanced products and services. These solutions
will include the following types of applications:
Internet security and parental controls features that will increasingly come from abroadband provider (in addition to those solutions sold at retail);
Home computer utility solutions that help consumers automate basic performance utilities(disk scan, disk defrag, virus and spyware scans, etc.);
Helping consumers more easily configure home networks, especially in settingappropriate security protocols;
Assisting consumers with resource sharing (drives, printers) on their home networks; and
Providing broadband carriers with tools to help better manage home network installation,configuration, and troubleshooting.
3 The Digiticians LLC
-
8/6/2019 Putting the Home Network
12/12
Putting the Home Network to Work
2005 Parks Associates
A Parks Associates White Paper 8
Stage 1: Shared broadband
Stage 2: Shared broadband Shared drives/printers
Stage 3: Shared broadband Shared drives/printers Shared content
Ease set-up and
configuration of home
networking products.
Secure the overall Internet
experience
Provide an enhanced
security experience both in
and outside of the home.
Utility dashboards that
tie basic PC performance
and management functions
into a simple interface and
automates the functionality.
Make device discovery and
diagnostics/troubleshooting
as easy as possible through
GUIs and other tools.
Set the stage for shared
content by helping to
manage drive sharing.
Router port management to
provide for rich Internet
content experiences
(gaming) while keeping the
network as secure as
possible.
Bandwidth optimization and
remote configuration/
troubleshooting.
Delivering and managing
true end-to-end content
services (music, video).
Ensure QoS for voice
services over the home
network.
Opportunities Within the Stages
Figure 8 Opportunities within each Stage
About the Author: Kurt Scherf is vice president of research for Parks Associates and studiesdevelopments in home networking, residential gateways, digital entertainment, technologydevelopment in the housing market, and residential and building management and controls. Mr.
Scherf is the sole author or contributing author/analyst of more than 30 research reports and studiesproduced by Parks Associates since 1998. His most recent work includesHome Networks andResidential Gateways: Analysis and Forecasts.
About Parks Associates: Parks Associates is a market research and consulting firm focused on allproduct and service segments that are digital or provide connectivity within the home. Thecompanys expertise includes home networks, digital entertainment, consumer electronics,broadband and Internet services, and home systems.
Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500to small start-ups through market reports, multiclient studies, consumer research, workshops, andcustom-tailored client solutions. Parks Associates also hosts two executive seminars, both part of theFall Focus series, and co-hosts CONNECTIONS (in partnership with the Consumer ElectronicsAssociation) each year. www.parksassociates.com.