IDC Expects U.S. Companies to Increase Their Web Hosting Services Revenues by Almost $1 Billion in 1999

FRAMINGHAM, Mass., January 4, 2000 — An increasing number of companies are turning to hosting service providers to implement and manage their Web sites, and in response, the Web hosting services market is growing at a torrid pace. According to International Data Corporation (IDC), this segment is one of the fastest-growing markets in the information technology industry and the Internet economy in general. 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.

"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," said Courtney Munroe, director of IDC's Business Network Services research program. "The Internet economy now encompasses and affects far 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 its platform or foundation; without Web hosts there would be no World Wide Web, which is now the leading Internet service."

According to IDC, the U.S. Web hosting market will increase by a factor of 10 through 2003, when it will total $18.9 billion. The United States provides the most lucrative market opportunities for U.S.-based service providers, but IDC expects international sales to generate a significant portion of revenues by 2003.

As hosting service providers become more popular, other IT vendors and professional services firms have begun to target them. "The Internet datacenter is becoming a leading environment for IT development and innovation. Additionally, what constitutes Web-hosting services is subject to change," Munroe said. "Just a few years ago, Web hosting implied a simple static Web site on a single dedicated or shared server. Today, a single Web site may comprise dozens of clustered servers operating as one or more domains and supporting several applications or business process and often drawing on resources hosted in other locations. What was a minor add-on to the Internet access business has become central to ebusiness."

IDC recently published Web-Hosting Services: Market Review and Forecast, 1998-2003 (IDC #B20953). The report analyzes the market structure, segmentation, typical service offers, pricing, and market strategies. It sizes the market for 1998 and the first half of 1999 and provides a forecast through 2003. Additionally, the report presents service providers' 1998 and first-half 1999 revenue and market shares. To order a copy of the report, contact Patrick Steeves at 1-800-343-4952, ext. 6787 or at psteeves@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.