Western European Web Hosting Market to Surpass $5 Billion by 2004, IDC Says

LONDON – AUGUST 16, 2000 – Western Europe is currently undergoing an explosion in both demand for and supply of robust hosting services, according to a new report from IDC. Hosting has traditionally been provided by access-based Internet service providers (ISPs) as an adjunct to their core business, but over the last year it has become the fastest-growing segment of many operators’ businesses. Europe is beginning to see network-focused companies place more emphasis on Web-level and application-level services.


"U.S. providers focused purely on hosting, with the funding and expertise required to make major rollouts of high-end datacenter facilities, are entering the European market and challenging existing providers, including ISPs and public telephony operators," said James Eibisch, research manager of IDC’s European IP Services program. "In addition, network operators and carriers are increasingly turning to hosting as a way of increasing margins, improving their position in the IP services value chain, thereby attracting investors and strengthening their financial position."

Market Drivers

IDC forecasts the European Web hosting market to increase rapidly in value, from $907 million by the end of this year to over $5 billion by 2004, due to:

-The ongoing demand for a simple first-stage Web presence from the majority of European companies that still do not have a presence

– Increasing size and complexity of existing sites, driven by the need to offer fuller, ecommerce-enabled capabilities within sites

– The continuing rise of Internet-based dot-com businesses conducting the majority of their operations and processes via the Web

– The gradual adoption by major media groups of the Internet as a delivery channel for high-volume content

– The growth of relatively low-cost broadband access methods encouraging content providers to develop more storage-, processor-, and bandwidth-intensive offerings

– The worsening skills shortage problem, creating a vacuum of available resources for businesses

"For many providers, and ultimately for the industry as a whole, plain Web hosting is a transitional step to application-centric services – such as application service providers (ASPs)," Eibisch said. "The boundaries between Web hosting and application hosting will quickly become blurred, with Web sites containing interactive real-time applications, fitting the ASP model even if it intuitively is part of a Web-hosted service."

European Web Hosting Services, 1999-2004 (IDC #HP03G) sizes and forecasts the market for spending on Web hosting services by businesses in Western Europe. It provides overviews of some of the major hosting providers operating in Europe and discusses different types of providers and the evolution of the hosting market. Spending is broken down by hosting service type – shared, dedicated, and colocate hosting – for Western Europe overall, and total spending on hosting services is broken down by each of the 16 countries covered. The study also details current usage of hosting provider services and the changes anticipated by users in moving hosting services from access providers to alternative hosting providers. This report is available to purchase from your local IDC office.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

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

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