Half of U.S. Small Businesses Now Embracing the Internet as eCommerce Use Doubles, IDC Says

FRAMINGHAM, MA – APRIL 24, 2000 – The Internet is changing the way companies do business, and small businesses (fewer than 100 employees) are no exception. According to results from IDC's 1999 U.S. Small Business Survey, the percentage of small businesses accessing the Internet surpassed 52% in 1999, and that number will climb to over 70% by 2003. Once confined by geographical constraints, small businesses are now leveraging the Internet to expand beyond local boundaries.

In addition to accessing the wealth of information the Web has to offer, a number of small businesses are recognizing the benefit of promoting themselves via the Web. In 1999, 2.1 million U.S. small businesses had a home page or Web site. That number will increase 30% to 2.7 million in 2000. "Although more small businesses are experimenting with Web promotion of their products and services, the market is far from saturated, and there is still plenty of room to grow," said Raymond Boggs, IDC's vice president of Small Business research. "Almost 13% of U.S. small businesses have yet to invest in a PC, never mind add Internet capability."

At this point, ecommerce presents the most significant growth opportunity for a wide range of U.S. small businesses. The number of these companies selling goods and services online will grow from 850,000 at the end of 1999 to 2.9 million in 2003. "The Internet has tremendous reach, and small businesses are beginning to realize the potential of this channel. By 2003 nearly half of online small businesses will be selling over the Internet," Boggs said.

Key Findings

— The growth in the number of new small businesses online is evident

across all company size categories. Even the smallest of firms are

stepping up to the Internet opportunity.

— The majority of small businesses still access the Internet through a

single PC shared by all users. This sets the stage for local area

network growth, especially as small firms seek the benefits of high-

speed broadband Internet access.

— Small businesses that use the Internet tend to be more advanced users

of computer technology in general. The technology "heat seekers" are

paving the way, as they advance through an ever-growing number of

available Internet services.

IDC's report, 1999 U.S. Small Business Survey (IDC #B21762), includes detailed analysis, by company size and vertical market, of Internet penetration, Internet applications, method of Internet access, frequency of Internet use, promotion and ecommerce activity, and spending for Internet access, as well as a profile of small businesses that use the Internet and those that have home pages. To order a copy of the report, contact Patrick Steeves at 508-988-6787 or psteeves@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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