Big names to benefit in home network boom

A new study predicts major networking players like 3Com and Intel are in a good position to dominate the hardware sector of home networking as the emerging technology booms over the next few years.

The GartnerGroup's Dataquest study asserts that 3Com, Diamond Multimedia and Intel are in a stronger marketing position than two other networking heavyweights--Cisco and Nortel Networks. Name recognition will be a large factor in the companies' collective success, the report said. Additionally, most of the companies already sell the hardware needed to network PCs, printers, and other peripherals.

"They're early to market and have high visibility in the consumer marketplace and that's very important," said John Armstrong, vice president of Dataquest's networking worldwide program. "It's harder for competitors to displace them because they have the retail and distribution channels. Those take time to develop."

The report--to be released at the end of this month at the Dataquest Predicts '99 conference in San Diego--says some 19 percent of the estimated 33.3 million homes with multiple PCs will be networked in 2002.

In contrast, in 1998 only 2.4 percent of some 18 million homes with multiple PCs were networked.

The Dataquest study also says phone lines will be the most popular way to network the home, followed by wireless and traditional Ethernet connections. The least popular way will be through electrical outlets, or powerlines.

"The use of existing phone lines, while not a perfect solution, is the easiest to implement since a majority of homes in the country have phone jacks where PCs exist," Armstrong said. "Wireless is much more flexible then phoneline, but it's more complex and more expensive. Powerline doesn't offer the same bandwidth and has limited appeal to consumers."

Operating system wars
Over the next few years, Sun Microsystems and Microsoft will duke it out over the operating systems these networked devices will run on. Sun is creating Java-based networking software called Jini, while rival Microsoft is touting its Universal Plug and Play.

"It will be a mix and match," Armstrong said. "Jini is certainly promising, but Microsoft has a strong presence and will give Jini a run for its money."

A third potential operating system--Cisco's IOS, an extension of its Internet operating system--could also be a factor, he added. But because the operating system is designed for big networks, its place in the home might be better served as a home gateway, or a central server, that runs a home network, he said.

Cisco, however, would have competition in that market. Sun and 14 partners last week announced an alliance to use its Java software as a potential standard for a home gateway.

"What vendors are going to have to do is actually support multiple operating systems," Armstrong said. "And consumers will vote with their dollars."