U.S.-Based Web Hosting Service Providers’ Revenues Approached $4 Billion in 2000, According to IDC

FRAMINGHAM, MASS – JANUARY 22, 2001 – An increasing number of companies are turning to hosting service providers to implement and manage their Web sites. As a result, the Web hosting services market is growing at a torrid pace. According to IDC, the revenues of U.S.-based Web hosting service providers reached nearly $4 billion in 2000, representing more than 100% growth over 1999 revenues. IDC predicts the revenues of U.S.-based Web hosting providers will increase by a factor of more than 13 between 1999 and 2004.

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"As the infrastructure platform providers for the participants in the Internet economy, hosting service providers (HSPs) are at the center of things, and the Internet datacenter is becoming a leading environment for IT development and innovation," said Melanie Posey, manager for IDC’s Web Hosting program. "Despite Internet economy disruptions triggered by the dot-com shakeout and stock market jitters, the Web hosting market will continue to grow as more businesses grasp the full potential of Web-based and, therefore, hosting-based opportunities."

"Without Web hosts, there would be no ecommerce or even World Wide Web," Posey said. "Web hosting plays a pivotal role in service providers’ business models, as providers of all stripes seek to provide infrastructure enablement services to dot-com ebusinesses and help traditional enterprises make the migration to click-and-mortars."

Since 1999, the Web hosting services market has shifted in status from "emerging" to "growth." With the growth has come increased complexity in segmentation, dynamics, strategies, and other market characteristics. Amid the current growth, the market is experiencing new forces – highlighted by the emergence of application service providers (ASPs), content delivery networks (CDNs), and managed service providers (MSPs) — that will continue to change the landscape while creating new opportunities for growth. According to IDC, HSPs will need to expand current responsibilities and develop new value-added standards and options via extensive partnering and marketing relationships if they are to maintain their market dominance.

In its recently published report, U.S. Web Hosting Services: Market Forecast and Analysis, 1999-2004 (IDC #B23606), IDC examines the market opportunity for U.S.-based Web hosting service providers that maintain Internet data centers in the United States and abroad. An overview and analysis of the market structure, segmentation, service offers, pricing, and market strategies are provided. Additionally, the report presents service providers’ 1999 and first-half 2000 market shares, as well as detailed profiles of the top 20 industry players.

To purchase this report, contact Bruce Atlas at 1-800-343-4952, extension 4053, or at batlas@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at www.idc.com.

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

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