Web Hosting Continues to Grow, Especially Cloud [Market Research]

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Web hosting is growing at a fast rate. However, looking specifically at cloud hosting shows us the segment that is really fueling the current and ongoing growth of the industry.


Hosting market overview, e-commerce example & types


The web hosting industry supplies solutions that enable individuals and companies to run their websites, applications, and other IT systems without having to build, staff, or maintain an internal data center. A web hosting services provider, commonly shortened to web host or simply host, provides both the hardware (the physical back-end equipment that provides IT resources such as processing power) and service that allow your website to populate online. Web hosting is a way for you to keep your site up for public visibility, as well as providing a place for storage and access of your data that is protected by security specialists. Another key element of web hosting is a development and testing environment. There are numerous other functions provided by a data center, extending beyond IT to broader areas such as disaster recovery, business continuity, and compliance.


The digital assets of the organization that pays for a web hosting service are stored on servers. Servers can be physical (actual physical computers) or virtual (digital constructs that are either portions of single physical machines or portions of groups of physical machines); either way, the hardware is the basis of hosting.


The growth of e-commerce is in large part due to the availability of web hosting services. Owners of online businesses are able to have someone else handle the infrastructural and maintenance aspects of their IT systems, keeping their site and databases safe, while focusing on their core business.


E-commerce businesses can add shopping carts and other features to their web presence, such as blogs, forums and chat environments. Additional features are added to make the business more robust in its visibility and to answer customer questions through means beyond direct customer service. They allow companies to improve their customer relationships and gather analytics on user behavior to provide better value over time.


Typically the web hosting services market is divided into segments by type – or the specific kind of hosting provided. Types of hosting include dedicated hosting, VPS hosting, shared hosting, cloud hosting, colocation, and website builders.


Dedicated hosting (whether managed or unmanaged) means that physical servers are being set aside for the use of one organization. A dedicated server, within the context of any organization, means that a single machine is being used for one dedicated purpose; the same applies with dedicated hosting.


The alternative to a dedicated server internally has often been a virtual private server (VPS). A VPS is a form of virtualization that is at still at the level of an individual machine. VPS hosting is still available and can be set up as desired by a full services infrastructure company. However, for the most part, this model has been replaced by cloud – since cloud allows better performance and efficiency.


Cloud hosting is hosting through a virtual server that is constructed out of resources from numerous physical machines, allowing for optimal resiliency, speed, and redundancy.


Shared hosting is the low-grade, low-budget form of hosting. There are known, major security problems with shared hosting. It is often compared to living in an apartment building. Security concerns go beyond that analogy though, with InfoSec Institute noting, “[I]f your site is hosted on a shared hosting server, it is only as secure as the site with the weakest security on the same server.” Plus, all accounts within a server used for shared hosting are sharing the same resources – disk space, memory, and CPU. You may need resources, and they aren’t available. In contrast, with a strong cloud plan, you will have a guaranteed level of performance. Security of cloud is also often praised (see Quentin Hardy and David Linthicum).


Colocation is the renting of data center space for hardware that is already owned by an organization.


Website builders are also included within the hosting category since those are sometimes used by hosting services, in conjunction with infrastructure.


Growth projections for web hosting


Web hosting is a relatively mature industry, having existed on a mass scale for just over 20 years. However, it is expected to grow at at an incredible rate, according to a couple of recently released market analyses.


According to a March 2018 forecast from Market Research Future (MRF), the web hosting market may be large but is expected to continue to expand. IT will achieve about $154 billion in revenue by 2022. To get to that level, it will sustain a compound annual growth rate, between 2016 and 2022, (CAGR) of 16%.


A report from California-based market research firm QYReports was nearly identical to the projection from MRF. The QYReports analysis suggested that web hosting will grow at a 16% CAGR through 2023. This forecast could be seen as slightly more optimistic than the other forecast, since 16% is an impressive growth rate to be sustained for an additional year.


This report, released in February 2018, was discussed in tech news site WhaTech.  WhaTech noted that the industry would also become more competitive during this period, since growth projections continued to be so strong.


Gartner clocks cloud hosting at 36.6%


As indicated in the market overview above, cloud hosting is on the rise – so understanding the above numbers is in part about understanding what is going on with the cloud market. Here is what is really impressive: cloud hosting, infrastructure as a service (IaaS), is growing at an incredible rate – 36.6% — from its size of about $34.7 billion in 2017.


These numbers come from Gartner, which estimated that sales of cloud hosting, or infrastructure as a service (IaaS), was currently growing at 23.31% and would far outpace the general growth of cloud services. Notably, cloud services was not expected to be as wildly successful as a broad category – although Gartner did expect healthy growth of 13.38% through 2020.


A primary reason for broader adoption of cloud services – and the stronger CAGRs that come with it – is a transition in the purchasing of business process, application, middleware, and infrastructure to the cloud model, per Gartner.


Data from a forecast by Synergy Research Group, released in July 2017, had similar findings. That report suggested that public infrastructure as a service (IaaS) and platform as a service (PaaS) would be 29% annually. Synergy suggested that managed or hosted private cloud would expand at 26% over the same period. Another interesting insight from the Synergy report was that the market for software and hardware to supply enterprise data centers would keep shrinking as public cloud was continually adopted in place of privately controlled IT infrastructure.


Cloud hosting for your growing business


Web hosting has been growing. Businesses have increasingly seen the need to expand their online presence, and they have increasingly entrusted outside systems and specialists to further that growth. Cloud hosting is one area that is growing at an incredibly fast rate. The fact is, all cloud systems are not built alike. At Total Server Solutions, we do it right: our cloud hosting boasts the highest levels of performance in the industry. Your cloud starts here.