Small Biz Gets Up To Speed

Switching from dial-up to broadband Internet access improves productivity and efficiency in small organizations, but the telephone is the dominant business tool, according to a joint report from Covad Communications and Sprint, and conducted by Equation Research. The survey of nearly 500 representatives of companies with fewer than 100 employees found that respondents spent more time online than they did on the phone, yet more than half chose the telephone as the item their business couldn’t function without.


Average Time Spent
Online On Phone
Less than 1 hour 9.3% 20.3%
1 to 5 hours 31.6% 33.2%
3 to 5 hours 26.8% 30.6%
More than 5 hours 32.3% 15.9%
Source: Covad/Sprint/Equation Research

Telephones are the primary communication tool for small businesses, while the Internet is viewed as an information resource. The small biz workforce has not yet become fully reliant on email and online messaging for communication, since all of their business contacts are often more accessible by phone. Conference calls and cell phones are currently more popular than Webcasts and mobile messaging, particularly for small businesses, but a shift could occur as online communication applications continue to reach into the mainstream.

The majority of survey participants were owners or partners (50.3 percent), with up to five employees (54 percent), and they were almost evenly split among dial-up, DSL and cable Internet access. The joint report found that small businesses are still in the early broadband adoption stage, with most survey participants indicating that they have had high-speed for only one to two years.


Small Business Internet Access Methods
Dial-up/modem 31.7%
DSL/ADSL broadband 30.3%
Cable broadband 26.1%
T1 or higher 9.8%
Other 2.1%
Source: Covad/Sprint/Equation Research

While the U.S. lags behind the rest of the world in DSL adoption – preferring to use the cable modem method for speed – American small businesses have embraced the second place broadband. A report from Probe Group is further evidence of the growing DSL demand among business, finding a growth spurt from 830,000 business lines in service at in 2003 to 1.5 million business customers by 2008. Revenues will skyrocket from $964 million to $1.9 billion, and small businesses will represent 85 percent of all lines by 2008.

Those that were considering a move to broadband cited among their reasons: outgrowing their dial-up (53.1 percent); increase efficiency (46.9 percent); spur productivity (30.6 percent); keep up with the industry (24.4 percent); and cost savings (20.6 percent). These reasons are valid as nearly two-thirds of those who upgraded say that they increased workplace efficiency, more than half augmented employee productivity, and roughly one-quarter cited a reduction in overhead expenses. While just over 14 percent said that they expected the upgrade to broadband to enable online customer ordering, 22.3 percent indicated that high-speed access actually inspired online transactions.

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