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IDC Predicts Increase in Web Hosting Revenues

An increasing number of companies are turning to hosting service providers in order to implement and manage their Web sites, and in response, the Web hosting services market is growing at an astronomical pace. According to International Data Corp.'s (IDC, www.idc.com) study, Web-Hosting Services: Market Review and Forecast, the market is one of the fastest-growing in the IT 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 total revenue to over $1.8 billion.

According to IDC, the U.S. Web-hosting market will increase tenfold through 2003, when it will total $18.9 billion. While the United States provides the most lucrative market opportunities for Web hosting services, IDC predicts that international sales will generate a significant market share by 2003.

"Just a few years ago, Web hosting implied a simple static Web site on a single dedicated or shared server," said Courtney Munroe, director of IDC's Business Network Services research program. "Today, a single Web site may comprise dozens of clustered servers operating as one or more domains and supporting several applications or business processes and often drawing on resources hosted in other locations. What was a minor add-on to the Internet access business has become central to e-business."

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. -- Isaac Slepner

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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