Racetrack regulars consult the Daily Racing Form, blackjack players count cards like there's no tomorrow, and the desperate folks at the roulette wheel rely on the cosmic strength of their lucky numbers. But what about you, the home-based worker? Who's going to help you handicap the technology decisions that will impact your home office in the coming months and years? We volunteer.
There's no such thing as a sure thing in computers, which makes it difficult to decide when to stick with an established technology and when to roll the dice with a new device. Your 56Kbps modem works, after all, so why should you invest all that money in a digital line? And what about those Brand X PCs you see advertised online--do these systems make sense or is it better to seek out a familiar name like IBM or Dell? Because there aren't any steadfast rules for technology purchases, we think you need an ace or two to slide up your sleeve. To that end, we analyzed 10 high-tech categories to help you determine when it's smart to stick with the safe bet and when you might want to risk a chance with something new. Follow our recommendations, and you might just find yourself ahead of the game.
1 To Mac or not to Mac? Apple computers (www. apple.com) are easy to learn and dependable to use. And anecdotal studies suggest they're simpler to support than Windows-based PCs, giving your business the advantage of more up time. So why are employers like Jaffe Associates, a marketing firm in Washington, D.C., telling their telecommuters to dump their Macs and buy PCs? In a word: compatibility.
"It breaks my heart," says Deborah Schwartz, a publicist for the firm and soon to be ex-Mac user. "My hands are tied. They're telling me this is what I have to do to communicate with the rest of the firm. The forms they're using, I can no longer read."
The big problem with Apples, and the reason we don't recommend them for home-based workers, is twofold: First, the rest of the business world--the folks you have to communicate with every day--is running on PCs. Macs command a measly 4 percent market share among desktop computers, and the company is hamstrung by being the only one in the market to run the Macintosh operating system. Self-extracting compressed files and several other file formats don't do well when moving between Windows and the Mac OS, and you can't afford to waste time importing and re-importing a file when there's work to be done.
Second, Mac owners face a scrippling handicap: software selection. Unless you're in graphics or desktop publishing, you can bet yor business software was written for the PC. Even if you pitch all the system maintenance titles that are so popular for PCs, Apple comes up short in several key categories for home office owners. If you're looking for a calendar and contact manager, you can buy Microsoft Outlook or Symantec's Act!, but forget about GoldMine or Sidekick. Intuit's excellent bookkeeping package, QuickBooks, isn't available for the Mac OS, nor are many other accounting or business-related programs.
Standard-setting speech recognition programs such as Dragon Systems's NaturallySpeaking and IBM's ViaVoice 98 are not on the menu for Mac users. Teleworkers will find that none of the major remote-access applications--Symantec's pcAnywhere and pcTelecommute, Artisoft's CoSession Remote 32, Compaq's Carbon Copy, or Traveling Software's LapLink--offer a Mac version. And database options are severely limited: Aside from one excellent choice (FileMaker's FileMakerPro), Apple fans are stuck with two clunky options with steep learning curves (Microsoft FoxPro or 4th Dimension). PC users, on the other hand, have not only FileMakerPro hut powerful, easy-to-use alternatives like Lotus Approach, Corel Paradox, and Microsoft Access. True, you can run Windows programs under emulation on a Mac, but even the best emulation is slower and less stable than software running in its native habitat.
Spence Zaorski, director of technology for Vantage One Communications Group in Cleveland, says he loves the Mac and uses one for about half of every workday, but believes the software problem is a deal-killer for home offices. "Apple was hurt badly when they lost face in the industry," he says. "Many software developers didn't go back. For people that need applications beyond spreadsheets and word processing, the Mac is not a strong platform."
Bottom Line: Mac is a bad bet.
2 Should you ante up for ADSL or stand pat with analog service? If you've ever been forced to wait and wait for a vital tidbit of data to download from the Web, you know analog connections just don't hack it anymore. Information about your market, your competitors, and your customers is readily available to you online, but the longer it takes you to get to the facts you need, the less time you have to act on this information.
Ramping up from a regular telephone line can change your information gathering from a mind-numbing, afternoon-long pursuit to nearly instantaneous selection and collection. You'll never believe you got along at analog speeds when you experience the ability to jump on the Web, grab what you need, and jump off again in seconds. Not to mention never, ever facing a busy signal again. Sure, you say, but all that convenience is going to gut my profit margin, right?
Wrong. If you live near an urban area, chances are a cheap, high-speed alternative is available to you. The best flavor: ADSL. It doesn't require a regular phone line upstream (like most cable modems), so you save second-line charges. It's point-to-point, so it's more secure than cable systems. And it's expandable: "The provider can ratchet to whatever he wants, right up to what your line will handle," says David Maccarelli, senior vice president of CFW Communications (www.cfw.com). His firm offers ISDN, wireless cable, traditional cable, and ADSL connections to the Net. He prefers ADSL, he says, because of its security and the fact that it doesn't tie up an upstream phone line.
With speeds of up to 7Mbps, you probably won't need any equipment besides your regular phone line and a $60 Ethernet card to get up and running. And in many markets, ADSL is cheaper than ISDN, which plugs along at a maximum of 128Kbps. Basic ADSL from US West runs $40 a month for 256Kbps, and Ameritech's standard $60 service includes unlimited Internet access. CFW Communications was just ending its trial at press time, but plans to offer 768Kbps residential service for $49.95 a month.
Home-based contract programmer Al Byers participated in CFW's trial, and he intends to keep his Waynesboro, Va., office wired to the hilt. Because he often makes changes to the programs on his clients' Web pages, the high-speed access made all the difference in the world. He now uploads each new application and tests it out immediately, instead of waiting for the transfer to happen. "It's almost instantaneous," he explains. "It changes your state of mind [about the Web], and it's a nominal expense."
International Data Corp. predicts there will be 4.2 million ADSL lines to residences by 2002. Hopefully, one is coming to a block near you.
Bottom Line: If a sure thing exists, this is it.
3 When is it time to gamble with your chips? Just last year, buying a name-brand desktop PC with something other than an Intel processor was almost impossible. Top competitor AMD commanded just 5 percent of the market, according to industry estimates. But when sub$1,000 PCs made their way into the scene, clone chips got a boost. Now, makers like AMD and Cyrix account for more than 35 percent of the desktop market, and their market share is growing fast. How do they do it? Spending money on manufacturing rather than on 30-second spots on Must-See TV Thursdays is a good place to begin. They also meet the same quality standards as Intel, and typically sell to PC manufacturers for 25 percent less. That can mean faster machines for less money.
It can take a leap of faith to leave the Intel fold, but it's a good risk to take. The latest Intel chip may be a little faster than the latest and greatest from the clones, but for workhorse applications such as your office suite, tax software, and PIM, you'll never know the difference.
"I had always owned Pentiums and 486s," says Matthew Stanchek, a Clemson University student who runs a computer consulting business part time out of his South Carolina home. "I had good luck with Intel. But I did a lot of research, and I looked at the benchmark results. I saw that the AMD K6-2 was as fast as a Pentium II. That, coupled with the huge price difference, made up my mind."
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Andrew Watson, vice president of marketing at Monorail Computer Corp. (www.monorail.com), says Stanchek's experience is typical. Watson, a former Compaq veteran, now makes computers with both Intel and AMD chips. "We don't see any compatibility issues, or any fear of AMD going out of business," he says. "They're both really solid chips."
Bottom Line: When the chips are down, there's little or no noticeable difference. Go ahead and buy a K6-2 or comparable clone to save some money on a high-performing machine.
4 Brand name or Brand X? You see the ads in your local paper: A no-name machine, or so-called "white box," for a very attractive price. Should you bite? Probably not. This manufacturer might be using the same name-brand components (such as graphics and sound cards) that Gateway and Compaq do, but then again, it might not. It may specialize in offering turnkey hardware, software, and networking solutions for local businesses, but it probably won't match the 24-hour tech support that home office workers get from major mail-order vendors.
Insight (www.insight.com) of Tempe, Ariz., used to make its own white box machines. But the company has since decided to go back to doing what it does best: selling familiar brands via mail order, according to vice president Brian Hicks. White boxes make up 35 percent of all United States PC sales--mostly because of large business purchasing--but Hicks says they're not a reliable choice for home businesses, which can't afford even a day of downtime. And perhaps most important, their price advantage is shrinking.
"The gap between the branded manufacturer and the white box manufacturer has really compressed over time," Hicks says. "It used to be $500 to $600. Now it's $100 to $200. The industry has taken notice of the white box, and now everybody is driving costs out of their models." Take Inca Computer (www.inca.com), a reputable but tiny computer company in Birmingham, Mich. At press time, Inca sold a well-equipped 400MHz Pentium II system for $1,699. But the price for an identical Gateway, with 4MB more graphics memory? $1,660.
Diane Schreiber, a Jupiter Communications spokeswoman, also runs a custom wedding cake business out of her home office in New York City. When she needed to purchase a new PC, she went straight for the biggest name she knew and bought an IBM Aptiva. "I know IBM has solid, solid customer service," she says. "I felt it was very important to buy brand name. I said, `I want something reliable, that I can really trust.' With prices so low, you can afford to go with a company that you have faith in."
Bottom Line: Long odds.
5 Lease or purchase? There's a long tradition of renting or leasing equipment for home offices, and major computer manufacturers are hoping you'll extend it to your PC. If you're tight for cash and need a new machine, leasing can certainly be a better option than buying a system with a high-interest credit card. "A lot of people who run small businesses don't have the cash up front," says Bob Kaufman, spokesman for Dell Computer (www.dell.com). "In our lease, there's no up-front costs. That is a really attractive option."
Work-at-homers today have more ways to spread out their PC payments than ever before. Earlier this year, Gateway (www.gateway.com) introduced YourWare, a program that enables you to purchase (not lease) a new PC with monthly payments. And Micron's (www.micronpc.com) new MPower is an affordable payment package that features obsolescence protection (see story in Up Front).
Despite these developments, if you can afford to buy your new computer with a single payment, do so. Under current tax law, you may be able to deduct all or part of the machine as a business expense. Dell recently offered a lease of $84 a month for 24 months or $64 a month for 36 months on a $1,699 PC. That's like financing the purchase on a credit card with rates of more than 8 and 10 percent, respectively. And if you bought the machine, you'd be able to sell it at the end of the two- or three-year period. Recouping even $300 would raise the effective interest rate of the lease by a few percentage points. It's not so much that vendors that offer PC leases want to gouge you. It's just that, like you, they're aware that your shiny new system is likely to be worth next to nothing by the time the lease is over.
Bottom Line: In a lease, the dealer almost always wins. Go for the up-front purchase unless you're really down on your luck.
6 Should you trust the Web with your backups? It's hard to argue against something as convenient as Iomega's Jaz drive (www.iomega.com). Pop it in, double-click its One-Step Backup software icon, and within a few minutes your files are copied safely. You can touch the cartridge, store it away, and always know you can get to it on a moment's notice. Compare that process to hacking up data to the Web: Depending on your Internet connection, it's almost sure to be a lot slower than using a high-capacity cartridge or tape drive. When it's over, you're trusting some company to take better care of your data than you do. And on top of it, you're paying a monthly fee for the privilege. For those of us who back up regularly, it's a no-brainer: Buy and use a backup device.
But many work-at-homers aren't compulsive backeruppers, and that's where a Web-based repository can be invaluable. If it gets you to copy your crucial files when you wouldn't have made the effort otherwise--if the extra convenience of clicking and forgetting is enough to make you hack up as often as you brush your teeth--then Web storage is worth any price. And in fact, it's surprisingly affordable. Chicago-based FreeDrive (www.freedrive. com) offers 7.5MB of online storage at no charge. For $15 a month, you can boost that to 100MB, and for an additional $5, you can make it a secure site.
Mike Titterington, a sales manager for Okidata, has worked out of his home office for 10 years. He swears by his company's Web-based backup, which he performs religiously every week. He never quite gets around to doing an onsite backup, he says, but with his current setup, he doesn't have to: "I love it. I can do it every single day if I want to. I click Start, walk away from it and come back; it says `Finished' and it's done. It's so easy."
Bottom Line: Worth the effort if it gets you to back up your data.
7 It prints! It faxes! It scans! It copies! Does it belong in your office? Multifunction devices are sweeping through the marketplace, and Dataquest estimates that by 2001, 3.6 million of them will sell each year. Their siren call: simplicity. In one compact package, you get all your peripherals in one. Take the mid-range Hewlett-Packard OfficeJet 610 (www.hp.com). It prints like the DeskJet 695C, copies like the HP Color Copier 140, scans like the ScanJet 5100C flatbed scanner, and faxes like a standalone plain-paper fax. To get all of those devices separately, you'd pay $1,290 and monopolize 8.5 square feet of desk space. With the OfficeJet, you pay only about $500 and take up 1.7 square feet.
"Can you buy a separate fax, scanner, and printer for under $500 from a reputable company? That's one issue," says Stephen Dix, marketing manager for Netgear, makers of networking products for individual and multifunction devices. "Space is the other issue. Where do you put three, four, or five devices in the home? You can't."
The problem is that the OfficeJet and other multifunction devices tend to be dogged by one qualifier: like. They print like the standalone printer, copy like a standalone copier ... you get the idea. In the above comparison, you're giving up features like having the ability to scan or copy from a flatbed versus a sheet feeder, getting slightly crisper color, and standalone print speed (the OfficeJet 610 prints high-resolution documents at just two pages per minute). Laser-based multifunction units like Canon's MultiPass L6000 ($599) deliver six pages per minute, but you pay for the performance. Nevertheless, these devices are still the best balance anyone's found of performance, price, and desk space.
Bottom Line: Even odds. If you don't need the ultimate in speed and printing or scanning quality, a multifunction peripheral can be a good fit.
8 Fix it yourself or fork over for service? You realize you've got to have more RAM, or your floppy drive stops working in the middle of a huge project. Do you do the work yourself, or pay someone else to pop open the box? Unless you're already adept at the type of upgrade or repair you're considering, we suggest letting someone else do the job.
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"If you know what you're doing, adding extra memory will take you 10 minutes," says Brian Underdahl, author of Small Business Computimg For Dummies (IDG Books) and a home based worker outside Reno, Nev. "If you don't have a clue, chances are you don't know what type of memory you need, how to install it, or even what it looks like. It comes down to how much of a geek you can afford to be, doesn't it? If you're in business to make money, then do what you do best and hire someone else to handle the tough computer problems. Fix the easy ones yourself, but know when to call in the experts so you don't waste a lot of time."
If you decide to do a repair or upgrade yourself, keep the clock in mind. At some point, it's going to cost you more in lost time to fiddle with your machine than the $30 that CompUSA charges to install RAM or the $39 it charges to put in a second hard drive.
Bottom Line: Ante up for service fees unless you can do the repair quickly.
9 Buy into videoconferencing or spring for a plane ticket? In theory, videoconferencing is a great idea. From the comfort of your home, you meet with clients around the world, taking in their expressions and showing them what your business has to offer. In reality, videoconferencing is still in its infancy. Sure, Diamond Multimedia's Supra Video Kit (www.diamondmm.com; $149.95) gives you everything you need to get started, but unless you're willing to fork over the kind of cash that would buy you a T1 line to access the Internet, you're likely to be disappointed in the picture quality. Plus, there's no substitute for a good old-fashioned handshake.
Michael Centrella is president and CEO of Merlot Communications, a Bethel, Conn., firm that sells systems that combine video, voice, and data. Ironically, he doesn't recommend videoconferencing for home offices yet. "As much as I like high technology, given the home office environment and the state of the art in videoconferencing equipment, I think the best meeting method is in person," he says.
Videoconferencing might be all right for interacting with existing customers, Centrella adds, but it probably won't help you close a new deal. "And quite honestly, airfares are getting cheap."
Bottom Line: Make your play in person. If you have to do video, think about shops like Kinko's, where a one-hour conference between two locations costs $150 at each site.
10 Should you sell on the Web? For some, the Internet is a treasure trove of customers, spilling out of e-mail inboxes like precious gems. For others, it's a dead mine, gathering virtual dust. Will your business be among the ones to cash in on the $17 trillion in revenue Forrester Research predicts will pour out of Web sites by 2001? Consider these factors:
Web customers come to buy and usually focus on a specific product before they make a purchase, according to the e-commerce experts at Jupiter Communications. Three-quarters of them know what they want before they ever log on, which could mean trouble for anyone hoping for wandering surfers to hit their sites and make impulse decisions to buy. Artisans hawking handmade clay pottery or other trinkets shouldn't rely on their Web pages as revenue streams, unless they've managed to generate a buzz before launching their sites.
If you're serious about e-commerce, sell products that people are familiar with, especially if they know exactly what they'll get when they add your items to their carts. Jupiter says that books, music CDs, and software are the best online sellers so far, which doesn't surprise Stuart A. Varden, a professor of information systems at Pace University. "Anything that's fairly straightforward, where the copies are similar, can do well," he says. "You're confident that what you ordered is what you'll get."
Unfortunately for home-haled entrepreneurs, operating a mainstream online business can he extremely expensive, especially if you have to compete with trig boys like amazon.com or cdnow.com. The costs to design the site, host it, and secure it could force you to price yourself out of competition. And what about all the other complexities of running a business, such as warehousing merchandise? Are you going to stack 5,000 copies of the new Puff Daddy CD or Tom Wolfe novel in your garage? Making matters more difficult, your customers are limited to the minority of the population that both have online access and have grown comfortable giving out their credit card numbers over the Internet.
Schwartz's husband Jeff considered all of these factors and decided to take the plunge. He runs a number of businesses from their home in Bethesda, Md., including Euro Fine Art, an imported art print company. "We have a printed catalog, and it seemed like the next thing to do," he says. "We already had digitized photos for the catalog. I'm really excited about it. I can introduce a new image on the Internet and not have to print it in the catalog. I think it's going to work."
Bottom Line: Long odds, but big payoffs for a few.
RELATED ARTICLE: Five gambles that paid off ...
1. The Internet Nobody took much notice when four university servers joined forces to form the original Internet back in 1969. But when the first enterprising companies started using this channel as a means to conduct business, the skeptics howled. Three hundred and twenty million Web pages later, the howling has quieted considerably.
2. Cell phones The first cellular phones were popular with corporate peacocks anxious to clutch the latest high-tech status symbol. Costs ran high and coverage wasn't very good, but hey, why let practical concerns get in the way of some friendly intimidation? Today, anybody can afford a wireless phone--even the peacocks' telecommuting employees--and millions put them to use every day.
3. Windows 3.1 Windows 3.0 didn't exactly set the operating system world on fire, and naysayers were more than a little reluctant to adopt this technology. As it turned out, Windows 3.1 was a sturdy product--and helped transform Bill Gates from a run-of-the-mill computer geek into king of the world.
4. Zip drives Investing in a 100MB storage device to replace the floppy was an act of blind faith for early Iomega Zip adopters. But it turned out to be quite a shrewd move, as there are currently some 15 million Zip drives in use. Ubiquity is key in the data storage and transfer market, and Zip, like Visa, is just about everywhere you want to be.
5. America Online AOL flew in the face of convention when it built a proprietary online service that wasn't compatible with the POP3 e-mail standard and charged users a premium for editorial content. Surely it would crash and burn, right? Sure. AOL put a friendly face on the World Wide Web and crushed its competitors with a simple interface.
... and five that didn't
1. IBM's OS/2 Big Blue had big plans for this technically superb operating system, but the mass market wanted nothing to do with it. OS/2 still lives, though almost exclusively for the narrow enterprise market. Ralph Nader has called on IBM to relaunch OS/2 as a populist/underdog alternative to Windows, but that role has already been taken by the freeware OS Linux.
2. Apple's Newton The handheld computer market is finally taking off, but don't expect Apple's ill-fated Newton to join in the celebration. In fact, perennial interim CEO Steve Jobs discontinued the Newton line in March, formally signing the death certificate of a device that was about a decade ahead of its time.
3. Pay-to-view Web sites Surfers have shown time and again that they're not willing to pay just to see a Web site Aside from The Wall Street Journal Interactive (www.wsl.com), which has 200,000 subscribers, pay-to-view sites have struggled mightily. Slate magazine (www.slate.com) drew some 270,000 visitors per month earlier this year; since implementing a $19.95 annual fee, 20,000 have signed up.
4. Push technology Eighteen months ago, everybody was talking about push and how it would revolutionize the way we gather and sort information. Well, it didn't turn out that way In fact, one push company is running away from the designation altogether, preferring to call itself "intelligent pull." Call it what you will-it didn't work.
5. Touch monitors Five years ago, many people predicted that touch-screen monitors were going to revolutionize the computer industry. Needless to say, this didn't catch on with Joe Consumer or Theresa Telecommuter. Touch screens stayed where they belonged: at ATMs and other kiosks.
Heather Newman is the computer columnist for the Detroit Free Press and a frequent Home Office Computing contributor. She's been betting on PCs since 1980.
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