Convenience Engineering and Branding Strategy Yield Fast Market Share Gains For SOHOware Networking Products.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 26, 1998--

Do-It-Yourself LAN Movement Gains Favor With Consumers Through Retail Kits That Ease Connectivity and Build "System Literacy"

In less than two years, NDC Communications has captured a major share of the do-it-yourself LAN market with a focus on the retail channel, convenience engineering and a family of products enhanced by creative branding under the SOHOware label.

While longer-established competitors have concentrated mainly on VAR and catalog sales, NDC has taken its simplicity message direct to consumers who can purchase an affordable starter kit to network their home, office or school PCs in less than 30 minutes with minimal technical knowledge.

In the process, NDC has made believers out of major distributors and retailers, including Ingram Micro, Tech Data Corp., Merisel, Fry's Electronics, Micro Center, Computer City and CompUSA. In fact, one private research firm reports that SOHOware has moved into third place in terms of shelf space for network interface products, behind Linksys and 3Com.

"Channel partners like value-priced products that are timed to emerging customer needs," said Andy Chang, vice president of business development for NDC Communications. "But they really get excited when a brand catches on and they can foresee a steady stream of new products linked to that brand."

Convenience is the Driving Force

Recent research is shedding new light on the SOHO (small office/home office) marketplace. While it is a well-known statistic that 99 percent of all U.S. businesses have fewer than 100 employees, studies by Sherwood Research indicate that 95 percent of small businesses employ 20 or fewer people. Home businesses with six or fewer employees represent 57 percent of all small businesses.

Based on this data, NDC has segmented the SOHOware product line to accommodate three distinct types: home (with multiple PCs), SOHO (2 to 20 employees) and small business/corporate branch office (20 to 100 employees). Despite the corporate downsizing movement of the early 1990s that resulted in an influx of IT-savvy people into these types of small businesses, NDC identified the deciding factor that drives SOHO and small business buyers still remains convenience and ease of use.

PC users are far more willing today to open their computers and install network cards than ever before, but it can be an intimidating process for first-timers. For this reason, the installation of a SOHOware network starter kit is supported by tutor-like instructions written for beginners and telephone contact with NDC technicians. The only other technical requirement is to get cables connected to the right port, which is a matter of following simple diagrams. According to Chang, if consumers feel a sense of accomplishment after setting up a small local area network (LAN) on their own, then NDC has fulfilled SOHOware's mission.

"There are different levels of complexity in network environments, and ease of use is relative to each," Chang cautioned. "For example, connecting two PCs for game playing or shared Internet access is not the same as connecting a home PC to a distant workgroup LAN or creating a larger workgroup LAN that does not use separate network management software."

That is why NDC has nine SOHOware products instead of one. The most common home, SOHO, and small business environments are addressed with different solutions driven by a common philosophy that networking is far less difficult and costly than it may seem in any given environment.

"We started with faith in the way we designed hassle-free implementations and with faith in consumer motivation to try a solution that most people associate with experienced system integrator skills," Chang said. "This is not an instance of the lowest price winning the business; it's more a matter of consumers trusting the promise that they can install the solution themselves without additional costs or expert assistance."

Consumer motivation comes from a number of trends, including sharing LAN resources, networking games, providing multiple Internet access through one account, connecting aging and new PCs together, connecting a home computer to a corporate LAN, and connecting mobile computers to desktop systems. The trust is coming from user experience and confidence in the SOHOware brand, Chang believes.

More Net. Less Work.

The SOHOware name conveys friendliness, but it does not explicitly state what the products do. So, in the next phase of building brand equity, the company is adding a slogan -- More Net. Less Work. -- to the product line identity.

"We are reaching deep into the corporate strategy and bringing forth a succinct message of what we stand for," said Dr. C.T. Wu, president of NDC Communications. "If you conducted an industry survey as to the best small network solution, the leading answer would likely be to call a VAR. If you asked who makes the products most used by VARs, the answer would likely be one of our competitors. We intend for SOHOware to be known as the best value available to consumers, a unique position by the nature of products and organizational support."

The idea of "more net" goes beyond the immediate benefits of resource sharing to all of the ways large organizations use networks and the migration of technology into small offices and the home. "A small business, which is often a workgroup by another name, can now view an Internet service provider as a gateway to a wide area network to which mobile or home employees and associated businesses are attached," Chang said. "You can have the functionality of intranets and extranets with nothing more than the networking capabilities of Windows 95 and SOHOware."

"Less work" has multiple meanings, he explained. Implicit in networks is the elimination of a large number of manual tasks related to sharing information and corporate resources. But SOHOware takes the ease-of-use issue one step farther by making the network setup process, to some extent, intelligent. As an example, the SOHOware Plug-n-Switch series offers a self-configuring/self-managing Net-Smart feature that automatically sets up and maintains the unit.

Wu also believes the VAR solution imposes more work on users -- from shutting down the system for days during installation to forcing standard solutions on every situation that may include unneeded and complex functionality. For the do-it-yourself user, the SOHOware solution involves far less work than any other approach.

The NDC strategy sees do-it-yourself networking as part of a much deeper trend in information technology, and that is the growing sophistication of consumers in analyzing their computing needs and solution options.

"The consumer market is evolving from widespread computer literacy to the beginnings of system literacy, partly due to necessity and partly due to a desire to add knowledge of a subject that is reshaping work, culture and society for all time," Wu said. "Products like SOHOware are not only fulfilling immediate needs, they are contributing to a longer-term education process that will influence future generations of technology and products."

The educational benefits of SOHOware are an important part of the brand's extended identity, when considering that computer networks are the "telephones" of the future, in Wu's opinion. "The telephone is a remarkable achievement in convenience engineering, user comfort, and ease of comprehension, yet the infrastructure of the switching system is extremely complex," he added. "People will eventually plug into a computer network with the same relative simplicity, and we expect SOHOware to be remembered as the fist, friendly tutor that made it possible."

About NDC Communications Inc.

NDC Communications is a leading worldwide supplier of small office/home office and small business networking products, workgroup networking solutions and wireless LAN connectivity products. The company's SOHOware product family was developed to provide consumers with the most user friendly networking products available on the market today and embody the SOHOware slogan -- More Net. Less Work. SOHOware products provide an easy-to-use and, in some cases, intelligent network setup to ensure the utmost convenience and enable consumers to maximize the networking power of the Internet and corporate intranets for their own business applications.

NDC Communications' U.S. headquarters is based in Sunnyvale. The company is privately held. For more information on NDC Communications and its products, call 800/632-1118 or visit the company's Web site at http://www.ndclan.com. For more information and specific details about NDC's SOHOware product line visit the Web site at http://www.sohoware.com.

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