April 23, 2003, 10:22 AM — Cut out the hype, and you're looking at a market for managed Web hosting services in Europe of around US$1 billion by 2005. That may be a far cry from the tens of billions projected during dot-com boom but a figure Frost & Sullivan Inc. believes is realistically achievable.
In fact, sales in the European managed Web hosting market could top $4 billion by 2008, according to a study published Wednesday by the London office of the New York-based market research group.
Even though corporate spending on managed Web hosting services has suffered under the current economic downturn, Frost & Sullivan sees the hosting market growing, nevertheless.
Deepening broadband penetration, the growing shift of business processes to the Internet and the rising adoption of IP VPNs (Internet Protocol virtual private networks), coupled with falling bandwidth prices, will be the primary growth drivers for managed Web hosting services in the years ahead, according to the market research group.
Moreover, new technologies such as blade servers and automated infrastructure platforms will help minimize space and power as well as IT personnel costs per customers, thus lowering overall operating costs, the consultancy said.
Still, the biggest inhibitor to the take-up of managed Web hosting services remains the entrenched view of many enterprises that they must retain responsibility for core online operations in-house, according to Frost & Sullivan.