Does the "SOHO" Market Exist

Written by Dave Tremblay, Senior Industry Analyst

PC companies are always looking for new markets to address. Many have setup internal product and marketing organizations to focus on the "SOHO" market." Here at InfoBeads, we've banished the term SOHO from our vocabulary because we've found that it lumps together two very different market segments.

Different companies have different definitions for SOHO. For this comparison, we are calling workplace establishments with under 20 employees the "SO" part of SOHO, and home-based self-employed businesses the "HO" part. We're using our 1999 Technology User Profile Study (TUP99) to compare these two segments. There are a couple hundred variables we could look at to compare them, but I've picked three that I think are most relevant: user occupation, average weekly hours of use of the PC and Internet connectivity/use.

Nearly 40% of small office PC users are in clerical occupations - occupations where the PC is likely to be the center of the job. In contrast, one-quarter of home office users are in blue collar occupations (e.g., farmers, plumbers) and one quarter are in professional specialty occupations (e.g., teachers, graphic artists), while only 11% are in clerical occupations. The different occupation profiles lead to very different PC uses.

Source: Technology User Profile

One measure of that difference is the average amount of time the user spends using his or her PC each week. Here again, we see some big differences. The home office user is likely to use the PC as a tool to help them run their business. Their PC use is one of the many things they do each day and usually isn't the center of their work. Their hours-used profile reflects that 56% use the PC less than 20 hours a week, and only 20% use it for more than 30 hours. For small office PC users, though, we see a different profile. Only about one-quarter use the PC under 20 hours in an average week, while 40% use it 30 hours or more. For many of the small office PC users, the PC is their job.

Source: Technology User Profile

Another difference is the two group's use of the Internet. Nearly two-thirds (62%) of home office PCs connect to the Internet, again more than the percent of small office PCs that communicate (43%). And once they are connected, home office PCs are connected to the Internet longer, on average. Over half (55%) of small office PC users spend less than 5 hours a week connected to the Internet, and 20% spend over 10 hours. Among home office Internet users, 41% are connected to the Internet less than 5 hours a week, while 29% are connected more than 10.

Source: Technology User Profile

We could go on and on, and do in the InfoBeads special that we're offering with this below, but I hope you get the idea. The "SOHO" market is one of our industry's myths, and companies treat the two segments alike at their peril. Address the "SO" market and/or the "HO" market, but don't target for the "SOHO" market or you are likely to miss your mark.

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