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The global web hosting services market size stood at USD 60.90 billion in 2018 and is projected to reach USD 183.18 billion by 2026, exhibiting a CAGR of 15.1% during the forecast period.
The market growth is driven by increasing internet penetration rate and this will support digitally connected things to rise in the future. In the current scenario, almost everything operates with the help of internet such as shopping, connectivity of various devices in household, and commercial space. Also, the number of small and medium enterprises is rising, therefore driving the overall demand for services across a wide range of applications such as public website, online application, and others.
As a part of the strategy, key players in this market are focused on investing to strengthen their web hosting services offering by acquiring local and regional players. For instance, in December 2016, GoDaddy, Inc. acquired Host Europe Group, to strengthen their product portfolio and expand their geographical units in entire Europe. This acquisition would assist the company to develop and offer hosting services to various small and medium enterprises.
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Advancement of Cloud Technology to Offer Services such as Unmetered Disk Space and Unlimited Email Account
The majority of players operating in the market are shifting from traditional storage platform to advanced cloud platform, such as private and hybrid cloud. Adoption of cloud for web hosting is an emerging opportunity to provide access through the internet and it has strong processing power and storage space which allows quick and efficient working of websites. Also, cloud hosting offers a wide range of features including unlimited email account, unmetered disk space, unmetered bandwidth, and others. The cloud hosting services will work as a pay-as-you-use model, in which the owner of the website will pay for the required space. This will support to drive the demand for cloud hosting services in the future. Further, the cloud is supporting in reducing the role and count of physical data centers. The rising adoption of cloud among enterprises and no requirement of infrastructures to set up data centers are also expected to boost the cloud adoption among hosting services.
Increasing Mobile Marketing Platforms Will Support the Adoption of Hosting Services
The advancement of mobile marketing platforms has created many prospects for various businesses to showcase their product and services online. This growing prospect further creates several opportunities for a service provider in the market.
The mobile marketing platform is usually used to advertise product and service. This platform has the potential to create opportunity for mobile devices. There is a rise in market advertising websites for advertising particular products through blogs, affiliating marketing, and others. For each advertising and promotional services, there is a need of domains and web platforms. Owing to rising demand for advertising and promotional services, market growth in this market is expected to boost during the forecast period.
Further, the mobile marketing platform takes place in the forms of in-app advertising, banner ads, mobile rich media, pop-up ads, etc. In addition, there is a rise in the usage of social media marketing platforms to provide recommendations as per the latest searches on social media.
For web hosting services, there is an increasing demand from the e-commerce industry for advertising products, providing recommendation through recent searches on social media or in banner ads, as e-commerce website owners need online marketing platform as they face different challenges in business.
With a n increase in the adoption of mobile marketing platforms, there will be a rising demand for these services and it will drive market growth in coming years.
The Challenge of Maintaining Uptime and Providing Scalability to Obstruct Growth
To provide enriched web hosting services, providers have to maintain a minimum of 99.9% uptime rate. More than 10 minutes of downtime a week is considered as a severe fatal. The main cause for unexpected downtime are mainly happening because of the failure of hardware or software, external security breaches, and administrator technical errors. Owing to maintain anticipated uptime by web hosting service provider, is considered as one of the key restaints for the market growth. Further, structural design and architecture style of the data center may create unauthorized bottlenecks for the hosting providers to fulfill standard demand. These restraints impose a resource crisis, which further hamper overall scalability. Furthermore, these restraints can be battled by adopting core technologies such as Internet of Things (IoT), artificial intelligence (AI), and big data. These technologies help to overcome the loopholes by providing better efficiency and operability of servers.
Rising Adoption of Cloud-based Gaming among Users to Create Prospects for Web Hosting Service Providers
In the past decade, key game developers were heavily investing in the development of gaming solutions based on cloud platforms and services. One of the lucrative opportunities in this market is the increasing adoption of cloud-based gaming services by the users. Cloud-based gaming is a unique model that assists users to play and stream video games directly from the cloud, while the game is operating on the developer’s server. The rise in the count for cloud-based gaming services will augment the demand for domain and servers in the upcoming future. Further, this would help to drive the web hosting services market growth during the forecast period.
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The Rising Number of SMEs in China, the U.S., and India to Drive Growth
Based on type, the market is segmented into shared hosting, dedicated hosting, collocated hosting, virtual private server (VPS) hosting and others (managed hosting and more). Among these, the shared hosting segment is expected to hold the maximum share in terms of revenue during the forecast period. This growth is mainly owing to an increase in the number of small and medium enterprises worldwide. Also, the governments of countries including India, Lebanon, Germany and others are focused on investing in the development of small and large enterprises. For instance, in 2019, the government of Lebanon invested around USD 30 million for the development of Innovative Small and Medium Enterprises (iSME) project. Also, the enterprises are strategically shifting from offline channel to online channel with an aim to expand their business globally. Further, the dedicated hosting segment is expected to grow with the highest CAGR during the forecast period. This growth is owing to the increasing number of internet users and traffic. To handle this huge amount of online traffic, dedicated or managed hosting services are preferred in place of any other hosting service. Dedicated hosting service provide enough storage capacity and required uptime of 99.9% to handle huge traffic. Major companies in this market are focusing on the development of dedicated hosting services to offer users with various benefits such as complete authorized control, security monitoring, authority management, and others.
Furthermore, virtual private server, colocation, and other hosting services are expected to rise with the steady growth rate owing to modest awareness of these services among small and medium enterprises.
Rising Popularity of Online Gaming Enabled with Enhanced VR and AR Technologies to Drive the Market
Based on application, the market is divided into segments including public website, mobile application, intranet site, and online application. Among all these segments, online application is expected to grow with a significant CAGR during the upcoming period. The growth is driven by the rising demand for online gaming services based on cloud platform. The adoption of VR and AR technologies is additionally expected to boost the online gaming experience of users and further, will help to increase web traffic. Furthermore, other segments such as mobile application and intranet site are expected to rise with a substantial growth rate owing to moderate usage of offline applications in smartphones.
Increasing Usage of E-Commerce Platforms is Driving the Demand for Websites and Online Applications
Based on deployment, the market is fragmented into public cloud, private cloud, and hybrid cloud. Among these, the hybrid cloud segment is estimated to grow at a significant CAGR, owing to the rising demand for web hosting services in applications such as building website, intranet sites, and others. Also, with the rising usage of e-commerce platforms, the demand for websites and mobile applications for commercial and public transactions is also surging. With the rising count of e-commerce vendors globally, providers of these services are also focusing on increasing their server, customized services, and computing infrastructure. Further, advancement in technology have augmented web hosting market growth. This growth in the hosting services allowed users and organizations to channelize their advertising and marketing efforts by adopting different web service tools based on hybrid cloud.
Asia Pacific Web Hosting Services Market Size, 2018 (USD Billion)
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The global web hosting services market is divided into five regions, including North America, Asia Pacific, Europe, Middle East & Africa, and Latin America.
Asia Pacific is expected to grow with the highest CAGR over the forecast period. The growth in the region is attributable to the rising number of small and medium enterprises across various sectors including retail, corporate, public, and others. To cater to the rising demand for these services, regional companies in this region are concentrating on developing advanced web hosting services. Furthermore, several projects have been initiated by hosting service providers in countries such as India, Japan, and others to enhance their product portfolio. For instance, in January 2020, in India, G-Core Labs initiated next point of presence of the global network infrastructure project. The country provides web hosting services on selected virtual servers and also supports global design of content delivery network.
While, North America is expected to lead in terms of the web hosting services market share during the forecast period. The growth in this region is owing to the existence of key players such as Amazon Web Services, AT&T Inc., GoDaddy Inc., and others. Key players in this region are focused on adopting and developing web hosting services based on artificial intelligence capabilities. The rising adoption of AI in these services would provide users with various benefits such as advanced security, self-repairing system, domain name performance and protection, deleting unwanted files, and others. AI also helps to study the architecture and pattern to discover unauthorized login, potential threats, any malware act, and secure the websites and user data from various cyber-attacks. To cater to the rising demand for web hosting services, companies in this region are focusing on developing and launching advanced web hosting services. These services offer benefits such as customized domains, security protection, and attached email services.
Europe is anticipated to grow with a substantial CAGR during the forecast period. In Europe, the market growth is significantly driven by increasing investments by web service providers to adopt green hosting application in countries, namely Germany, the U.K., Spain, and others. For instance, in 2018, Hosting.co.uk adopted green hosting services. According to these services, the company is focused on implementing air conditioning systems approved by the Energy Star board.
Further, Latin America and the Middle East and Africa are expected to grow with stable CAGR during the forecast period. This growth is mainly owing to the high spending done by the major players in this market to acquire and merge with regional and local players.
Focus of Key Players Towards Innovative Web Hosting Services to Intensify Competition
Amazon Web Services (AWS), Inc. offers products and services such as application integration, augmented reality (AR)/virtual reality (VR), blockchain, customer engagement applications, internet of things (IoT), machine learning, among others. Amazon also offers cloud-based web hosting solutions that deliver services to startups, large organizations, profit, and non-profit public sectors, and governmental administrations. In addition, AWS offers a wide-range of website hosting services that help to deliver broad platform support, flexible pricing models, and others. Additionally, AWS, Inc. has server locations for web hosting across the world except the Middle East and Africa.
January 2018 – Amazon Web Services invested billions of dollar for the development of data centers in Britain and France. The investment assisted the company to expand its geographical expansion in the European countries.
The web hosting services market is moving towards building a new prospect that helps ecommerce and various startups to adopt advance web hosting services based on technologies, such as IoT, artificial intelligence (AI), and others. In web hosting services, AI can perform a wide range of functions including self-diagnose, self-scan, and self-repair. In the future scenario, various organizations will initiate adopting web hosting services based on AI, to reduce overall labor-intensive tasks such as website building, analyzing, triangulation, and data processing. Also, rising internet penetration, adoption of upcoming 5G, and home automation are expected to create numerous opportunities for the market growth during the forecast period.
An Infographic Representation of Web Hosting Services Market
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The web hosting services market report offers qualitative and quantitative insights on the web hosting services industry and detailed analysis of market size & growth rate for all possible segments in the market.
Along with this, the report provides an elaborative study of market dynamics, emerging trends, opportunities, and competitive landscape. Key insights offered in the report are the adoption trends of web hosting services, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.
2015 - 2026
2019 - 2026
2015 - 2017
Value (USD billion)
Fortune Business Insights says that the market value stood at USD 60.90 billion in 2018.
By 2026, the market size is expected to reach USD 183.18 billion.
The market is expected to grow at a CAGR of 15.1% in the forecast period (2019-2026).
Asia Pacific is anticipated to grow with the highest CAGR and its value stood at USD 12.50 billion in 2018.
Within type, the shared hosting segment is expected to lead the market during the forecast period.
Increasing mobile marketing platforms is one of the key drivers for market growth.
Amazon Web Services, AT&T Inc., and GoDaddy Operating Company LLC are the top companies in the market.
The online application segment is expected to grow significantly at the highest CAGR owing to high efficiency and easy implementation.
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