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Why Small Businesses May Rule in Datacom

May 1, 2008
Light commercial work may be the next hot market for datacom.

The slowdown in residential building, growing supplies of new and resale homes and shaky consumer confidence have taken the air out of the once red-hot housing market. In response, homebuilders have cut back on new construction to tighten inventories of unsold homes. Mindful of this trend, forward-thinking datacom contractors are on the lookout for new opportunities.

Many of these contractors see small business installations as an ideal next target. Out of the 5.7 million businesses in the United States, five million are small businesses employing less than 20 people. These are America's retail stores, real estate and insurance offices, medical and dental clinics, restaurants and bars. All need what these contractors provide: phone and computer connections, surveillance video, access control, lighting controls and audio/video systems. Best of all, this is a market that is being virtually ignored by large consumer electronics (CE) installers who focus their sales and marketing efforts on 100 or more voice and data drops. The average small business needs 25 voice and data drops or less.

The best way to tackle the light-commercial datacom market is by thinking of a small business as a high-end home. Why couldn't the experienced contractor create a cinematic experience inside a doctor's waiting room just as they have in a new home? And why couldn't this same contractor install Internet protocol (IP) network cameras for a fast-food franchise owner, if they've deployed similar systems for homeowners to monitor their front doors? Whether they know it or not, these contractors already have the experience, supply-chain network and the capacity to succeed in the light-commercial market.

The migration path from residential to light commercial is easier than you might think because of several factors. For one, some of the decision makers for the light-commercial businesses may be the same people for whom the contractor has wired high-end homes in the past, such as doctors or business owners who recognize the value and importance of a quality installation, and who appreciate the benefits of the latest technology.

Second, a mix of residential and commercial products can be successfully installed in a small business, flattening the learning curve for the residential installation team. For example, in a small business a standard residential panel will suffice, while larger facilities require a 19-inch rack. Also, many high-end residential key systems can accommodate a small business, as can an IP network video surveillance system designed for a home. Whole-house audio will work in a medical clinic, restaurant or retail store just as well as anywhere else.

Small business applications may follow either the TIA-570-B Residential Standard or the TIA-568-B Commercial standard. The principal difference between the two is merely the punch-down scheme. T568A is used residentially and T568B is used commercially, with the only difference being that pairs two and three are reversed.

Developers of new commercial properties recognize that tenants have come to expect Internet-ready offices. However, few have embraced the fully connected concept as much as homebuilders. The contractor's challenge is to convince the developer prior to build-out to offer tenants a basic structured cabling system as a standard feature, and to offer upgrade options for additional connections and for security, whole-house audio, and access control. Rent can be adjusted upward to make a profit.

Requirements obviously vary. While a sports bar may want full-scale, theater-style video and audio, doctors or lawyers have no need for an entertainment environment. However, what virtually every small business has in common is the need for security, specifically video surveillance. With the advent of IP network-based surveillance the security industry is in the midst of a sea change, representing a great opportunity for contractors and distributors to get on-board.

In this economy, contractors and distributors must be on the lookout for new opportunities. As one of the fastest-growing segments of our economy, small businesses provide excellent prospects to apply core competencies to a new market.

The author is director of structured cable, Honeywell Cable Products, Pleasant Prairie, Wis.

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