Markets: Who Are the High-Tech Workers?
Why should you care? Because they will be your employees, your suppliers, your customers. Look at the stats
Almost 19 million Americans -- more than 15% of the entire U.S. workforce -- work for themselves, the vast majority of them running single-person businesses out of their homes. Almost 12 million earn enough to be considered professionals. And 5 million of those use personal computers. They are the children of two trends: the wave of corporate restructuring that started rolling through the U.S. economy in the late 1980s, and the availability of powerful home-office technology at reasonable prices. Those facts, and the information that follows, were derived from a survey conducted by Computer Intelligence InfoCorp, in La Jolla, Calif.
Self-employed computer users will change every aspect of your business. When recruiting employees, you'll be able to offer parents of young children the chance to work from home. And when contracting services, you'll no longer be limited by location: in the electronic village you can hire talented service providers from anywhere and exchange complex documents electronically.
Home workers also present a huge marketing opportunity. On average, a professionally self-employed person with a PC generates almost $70,000 in household income -- 42% more than one without. Many self-employed people buy the latest technology. Just a little more than half the PCs running in the home-based businesses surveyed were purchased within the last two and a half years, and 57% of them use 386 or 486 microprocessors. Another 5% of self-employed home workers use computers from the high end of Apple's Macintosh line. Most of the IBM-compatible systems are equipped with a color monitor and a hard drive with about 150 megabytes of capacity.
Self-employed PC users tend to spend more on hardware and software than other types of buyers do. The typical system used in a home-based business today costs approximately $3,000, including software, at the time of purchase. That's about $1,000 more than the average cost of a PC system purchased in the United States. Perhaps because they're spending their own money, the self-employed invest in the latest to stave off obsolescence.
But averages can be misleading. If you believe everything you read in computer magazines, you'd think every one of your neighbors was using a Pentium-class PC with Windows and a CD-ROM drive. In fact, much of the equipment used in home-based businesses is decidedly less than leading edge.
For example, despite wide availability and heavy promotion, Microsoft Windows, though popular, is not omnipresent. A third of self-employed PC users don't have it and don't plan to get it. And more than 75% of self-employed PC users have never heard of, or have no plans to use, Windows NT and IBM's OS/2, two other sophisticated operating systems. Sixty percent have not taken a single trip down the Internet.
In those ways, they are utterly unlike their close relatives, the telecommuters. Today 3.9 million Americans commute to their jobs either full- or part-time via a PC. They are the road warriors of the information age: their PCs are more powerful than others', and more expensive. Fully 85% of telecommuters are equipped to communicate with their employers' systems miles away. And they are among the heaviest users of commercial on-line services, such as Prodigy and America Online.
Currently, very few providers of computer hardware, software, or services tailor products to the home business. Big companies, such as IBM and Compaq, typically repackage big-business gear for the home market. So opportunities remain, even in areas of the market that companies have targeted and in which they've achieved some success.
Intuit, which publishes Quicken, the predominant personal-finance software package, designed QuickBooks, a simple accounting software package, with small businesses in mind. After less than two years on the market, it has captured just under 10% of self-employed professionals with PCs. An astounding 2 million self-employed professionals don't use any accounting software at all.
Similarly, Borland's dBase leads the database-management market for the professionally self-employed. Anyone who has struggled to program a simple application in dBase will not be surprised to learn that it holds just 10% of the same market, or that 43% of self-employed professionals use no database product at all.
The market remains fragmented, underexploited. And that means opportunity for companies that take the time to understand the high-tech home worker. Large companies can't afford to ignore that consumer. But small companies that understand the needs of the home-based market because they, too, are at the start-up stage may have a strategic advantage in tapping that market as the competition heats up.* * *
Thomas Roberts is director of product management at Computer Intelligence InfoCorp, a market-research firm headquartered in La Jolla, Calif.* * *
Occupational Groups of Self-Employed PC Users
Service workers 23%
Doctors, lawyers, accountants 21%
Managers and executives 20%
Sales and marketing professionals 18%
Average Household Income
Average U.S. household $42,100
Self-employed without a PC $49,000
Self-employed with a PC $69,400
About the Survey
During the first six months of 1994 Computer Intelligence InfoCorp conducted a two-phase survey of the end-users of PC products in the United States. Called the Consumer Technology Index, the survey is by far the largest of its kind; it yielded more than 10,500 responses to a 12-page questionnaire. The Consumer Technology Index used a variety of statistical techniques to ensure that the research was representative of the entire U.S. marketplace.