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THE increasing tendency for companies to take the ''downsizing'' path has led to a boom in the sales of local area networks.

  The increased power of the personal computer, in particular the introduction of Intel's 386 processor, and the better capabilities of vendors to integrate the PCs and mid-range UNIX systems, has led customers to regard networked systems as an adequate business solution.

  The result has been an increase in sales of network software and hardware with further growth probably exponential.

  IDC figures for 1991 (although these include Australia and Japan) for the Asia-Pacific area showed that US$18 million in interface cards and network operating systems were shipped. In 1992, IDC said that increased by 25 per cent.

   This increase, it claimed, was precisely because of the movement to 386 PCs and general downsizing.

  According to Novell, the Asian market (excluding Japan) for network operating systems should be valued at US$75 million per year once five million PCs are in place.

  Novell has already grown by almost 100 per cent a year during the the past two years.

  Most analysts compare the potential of the market with that of the US where 50 to 60 per cent of PCs are networked.

   In Hongkong, the figure is about 15 per cent, according to the IDC, while Singapore is estimated to be about five per cent higher.

   If the US is anything to go by, growth potential is certainly enormous.

  Should they be compared? Singapore's claim to having the highest network ratio in the region is, in part, due to the push by the Government to provide an infrastructure to create an ''intelligent island''.

   Numerous government bulletin boards providing business information and an ISDN system have encouraged computerisation and so, in turn, networks.

  Hongkong, on the other hand, has had less of a push towards computerisation, even at the PC level, by Government.

  While the local phone network even surpasses Singapore's in terms of low cost and digital technology, the overwhelming use of Cantonese has limited PC growth and made networking a more likely solution for the larger business organisations.

  Even so, as Chinese-language software becomes more readily available, the networking growth potential increases.

  The potential seen by the companies involved in the business is reflected by the increased competitiveness in operating system and service providers.

  Novell, perhaps with an eye to the challenge of Windows NT with a networking capability embedded in the software, has taken an interest in UNIX Systems Laboratories.

   Both software houses see the demand for power on the desktop, whether under UNIX or Microsoft, as having the knock on effect of comprehensive systems integration and networking.

  Even without the complications of UNIX coming down to common office network, firms are making efforts as never before to provide solutions that are easier for the customer to use and install.

   Microsoft has announced it is working in a joint venture with ICL, called Hermes, to create an application that will handle the system's administration from the desktop.

  Even here, the stepped-up competitiveness of the LAN market is noticeable. ICL has already developed a package called Access Manager to lie on networks providing increased security.

  An obvious development is that, while firms are using PCs for more and more of their computing needs and moving to ''client-server'' solutions through networking, most are loath to lose the investment in their mainframes or older mid-range systems.

  So, on top of the networking demands for the client-server architecture comes a need to be able to access the older machines through the local area network.

  The larger computer companies such as Hewlett Packard, Unisys, ICL and Digital are all pushing network solutions as part of a larger capability to integrate systems.

  It is a market that will possibly challenge the growth of the basic local area network structure.

  Indeed, whether the Asian network market will reflect the US - 50 per cent of PCs networked - may happen in a different way.

  Just as the regional development of telecommunications systems has leap-frogged European and American structures because of new technological developments, it is quite likely that the networking issue will do so, too.

  Apart from places such as Singapore and Hongkong, the take up will be relatively slow, though dramatic, but the sophistication of the office networks in Asia are likely to be far greater than those quoted in IDC reports.

  The general confidence of the market in networking is not just apparent in the actions of the computer hardware and software suppliers like Novell, ICL, Microsoft and HP, which can also fit into a worldwide trend, but can be seen by specialist hardware suppliers and service companies.

   As networks grow and larger firms move with the technology, companies like SynOptics see opportunities in hubbing.

  In terms of specialised products to transmit data faster and more reliably, firms like DataCraft, ITS, SynOptics and 3Com see huge potential for their expertise and new technology.

  The office network is set to become even bigger business in Asia.



HK big market for downsizing