Hosting services – be it in the form of web hosting or data centers – is a market which is growing at a fast pace. A blanket term for a whole range of technologies which enable hosting of physical servers; hosting services include the providing of free web, cloud, dedicated servers and colocation services. As several organizations are facing scalability and data security challenges the demand for hosting services has grown immensely. According to Technavio market analysts, the global hosting services market will reach the value of around $146 billion by the year 2020, recording a CAGR of over 13%.
Geographical Segmentation of Global Hosting Services (2015)
Source: Technavio
This CAGR raises the obvious question as to what exactly is driving the global hosting services market. Some of the major drivers and trends as identified by our analysts are as follows:
The e-commerce boom
E-commerce is an everyday reality. Almost no country has remained untouched to it, which explains how the e-commerce market is poised to reach the value of $3.5 trillion by 2020. It goes unsaid that this huge volume of growth calls for better data security and scalability. As many of the e-commerce companies lack in-house expertise, they resort to outsourcing the maintenance and operational aspects of their websites – thereby boosting the demand for e-commerce hosting service providers.
Growing focus on green hosting
It is estimated that an average web hosting server consumes more than 1,000 kWh of energy and emits over 630 kg of CO2 annually. As stakeholders have increased their focus on energy conservation and carbon emission reduction measures in hosting facilities, green hosting facilities is quite in demand. Green hosting not only increases the cost-effectiveness of the services, but also enhances the reputation of buyers in terms of eco-friendliness.
Increased demand from MMO gaming sector
Online gaming has emerged as an industry unto itself, and as the market for massively multiplayer online game or MMOG is growing, game developers are facing the challenge of hosting games on their own. This explains why large MMOG developers, such as Blizzard and Activision, are dependent on third-party service providers for game hosting services.
Preference for hyper-converged infrastructure
Scalable storage space on servers and improvements in backup and disaster recovery systems are the two major reasons why organizations are opting for hyper-converged infrastructure. The hyper-converged infrastructure brings computing, storage, networking, and virtualization under a single system; thereby enhancing the disaster recovery system and providing cost as well as operational efficiency.
Along with preference for hyper-converged infrastructure, there has also been a trend towards adoption of hybrid hosting systems. These hosting systems provide the benefits of both the traditional as well as the cloud hosting systems and help in minimizing privacy and security-related issues.
Adoption of web servers by SMEs
The demand for hosting services has further been boosted with more and more SMEs (small & medium enterprises) working towards bettering their web presence. A better web presence not only broadens the customer base but also contributes towards effective brand awareness. This is why SMEs are now adopting web servers and looking for effective hosting services.
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