Special Report on Office Automation: Networking means LANding: A quarter of the world's 100 million PCs are now linked and the number is rising. Tim Bowler looks at causes and effects

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THE DAY of the stand-alone personal computer seems to be passing. Networks which allow a number of users to talk to each other are increasingly popular. More than half of the PCs now sold in Britain are being installed in networks.

A quarter of the world's 100 million PCs are now linked with various local area networks, or LANs. By 1996 this figure is expected to have risen to more than half. Networking is taking off for several reasons. The first is that linking all the PC users in an office allows people to share software and information. All computer users in the office have immediate access to files on other machines. This means that work can easily be shared out, boosting productivity.

A network also allows a firm to introduce electronic mail systems, improving communications. Also, LAN allows a firm to utilise more efficiently resources such as laser printers or fax modems.

Another reason given for installing LANs is 'downsizing', where companies replace older minicomputer systems and 'dumb' terminals, with networked PCs. Industry opinion is divided about this trend. IBM scoffs at the suggestion that 'downsizing' is significant. This may be true, but there is no doubting the growth in networking; many firms are opting for networks rather than a minicomputer system.

Finally, a network will allow the integration of otherwise incompatible computers, from Apple Macintoshes to Unix workstations.

So what of the problems? Ironically many of then stem from the very benefits that networks bring. The first is the challenge to firms which have a hierarchical flow of information. Because networks allow co-workers to communicate much more easily than in the past they can lead to a 'flattening' of such firms' information curves.

The next problem is the sheer volume of information that networks can disseminate. Often a manager arriving at his or her desk after a day or two away from the office can find a mountain of electronic mail waiting to be processed; the internal mail can become an electronic imp, showering the hapless user with message after message. The cure here lies not in the system but the company's culture. Workers have to be trained to keep electronic mail to an absolute minimum. Junk is still junk whether it comes in the post, or down a computer cable.

Distant managing is another lesson that department heads have had to learn. With a computer network that may stretch beyond national borders, some staff may often work away from their home base. Line managers need to judge performance by the workload processed rather than appearances in the office.

Some analysts go further, saying companies that set up networking without monitoring how their staff use the system can be heading for trouble. After all, how do you know staff are not using the network to put their interests first, and those of the firm second? All networks are awash with rumours. Stopping such talk is impossible, yet it is important for managers to be aware of it as another way of monitoring staff feelings.

Those in favour of mainframes and minicomputers also argue that PC-based networks need more 'caretakers' - and computer maintenance does not come cheap. Critics also say that with a PC network, the issue of who is responsible for making back-ups of computer programs can be obscured, with potentially disastrous consequences.

Despite these drawbacks, the UK market is growing apace. Some companies report the main area of interest is in LANs for small groups. A significant factor in this is what has been called the 'commoditisation' of the market. Networks are now sold as a commodity, almost off-the-shelf. Within the past nine months, network-vendors have been packaging LANs to potential clients. Typically such packages include a printer, network-server, installation, staff training and on-site support.

There is growth at the other end of the market too. The phenomenal sales of inter-networking equipment - used by large users to link several LANs - reveal just how many large-scale networks are being established by multinationals. According to Datamonitor, the West European market was worth dollars 55m ( pounds 36m) in 1987 and dollars 390m in 1991 - an annual growth rate of some 60 per cent.

Despite the management drawbacks and challenges that PC networks present, there is no doubt that they are here to stay.