Web Hosting Market Growing at a Rapid Pace

Jim Martin

The continued growth of the Internet has brought about many changes in various segments of the computer industry. While some markets, such as SNA terminal emulation, have been adversely affected, other markets have taken off. One of those is the Web hosting market.

According to a report by International Data Corp. (IDC, Framingham, Mass.), the Web hosting market is one of the fastest growing markets in the information technology industry and the Internet economy—as IDC expects revenues of U.S.-based Web hosting companies to grow by almost $1 billion in 1999 alone, bringing them to over $1.8 billion.

The reason for the growth in Web hosting is quite simple. Some companies want to have Web sites but do not want to run them. So, they are turning to hosting service providers to implement and manage their Web sites.

“Among the factors driving growth in the Web-hosting market, the broadest is the remarkably robust U.S. economy, which is enjoying the longest period of sustained growth in this half of the century. Even more remarkable is the vigor of the IT industry and in particular the Internet,” says Courtney Munroe, director of IDC’s Business Network Services Research program. “The Internet economy now encompasses and affects more than just the IT industry that fostered it, and Web hosting forms a core component of this economy because in many respects hosting is the platform or foundation; without Web hosts there would be no World Wide Web, which is now the leading Internet service.”

IDC does not see the Web hosting market slowing down anytime in the near future, as it predicts it will increase by a factor of 10 times through 2003, bringing the market to $18.9 billion.