What is The Future of Web Hosting Industry?

Web hosting has grown into a mature IT market since its humble beginnings. Web hosting plans have diversified, resources and features have become more abundant all the while prices have plummeted to all-time lows, and more and more specialized hosting services have emerged (e.g. WordPress hosting, managed hosting, etc.). Web hosting remains a competitive business today and a must-have service for anyone launching a blog, website or online store. But how are things looking for the future of web hosting? Will its expansion continue? Will new technologies bring better and even more affordable hosting solutions making web hosting as we know it today obsolete?

Without doubt the need for web and app hosting services will continue to grow, and as new customer segments appear, services will continue to specialize in addressing those needs.

Web Hosting as We Know it Today

The traditional pairing of shared and dedicated hosting solutions have been expanded to include managed hosting, WordPress optimized hosting, VPS hosting, and now cloud hosting as well. While prices for shared hosting are as low as they have ever been (perhaps marking the slow demise of this type of hosting for the benefit of new technologies), dedicated hosting is still on the high end of the pricing scale. But how are trends looking for dedicated and managed hosting, and will new technologies bring the end of traditional hosting infrastructure products?

Future Predictions – by The Numbers

A research by 451 Research, an IT research and advisory company, has found that the growth dynamics of the different web hosting services will show a different pattern and focus will be shifted from traditional hosting infrastructure to more specialized infrastructure environments such as IaaS (Infrastructure as a Service) and SaaS (Software as a Service). According to the study, an annualized revenue increase rate of 15.5% is expected for hosting services, and the revenue drivers will be managed hosting, which is expected to grow about 18.7% per year, followed by shared hosting with 10.4% per year and dedicated hosting with a 5.7% growth per year. In terms of market share, web and application hosting will register a decline, while managed hosting will see an increase to a surprising 71.5%. The research further estimates that while North America and EMEA markets – which also constitute the largest markets for hosting – will continue to grow, their share of the hosting market will shrink and APAC and Latin America markets will grow at considerably higher rates (12% and 14% compound annual growth rate in North America and EMEA, respectively as opposed to 29% and 30% compound annual growth rates in APAC and Latin America through 2019).

So, what does all this mean for the hosting industry? The slowing overall growth of traditional web and app hosting resources means that workloads will be moving toward IaaS and SaaS services, which will become increasingly specialized and infrastructure services will include managed services as their modular component. This shift and customer segmentation is an opportunity for existing providers to address these emerging demands and show prospective customers how cloud services can be of value for their businesses.

Managed services designed in particular for certain applications and platforms, third-party applications and public cloud infrastructure will be the new driving forces of the hosting market.

The Rise of The Cloud

Traditional virtualized, dedicated or shared infrastructure products are already starting to be overshadowed by cloud computing, a domain whose broad range of services taps into the scalability and flexibility needs of developers, small business users and large enterprises.

The greatest benefits that users can draw from cloud computing are centered around the idea that quick and on-demand access is granted to a bulk of configurable computing resources (services, applications, storage, networks, servers, etc.) characterized by rapid provisioning, minimal service provider interaction and minimal management effort. Another characteristic of cloud services, whether understood as SaaS, IaaS or PaaS (Platform as a Service) is their elasticity and ability to respond to changing demands. A further peculiarity is their mostly pay-as-you-go nature that allows users to purchase services based on consumption.

The three so-called components of cloud computing – SaaS (applications delivered over the web and designed for end users), PaaS (a conglomerate of tools and services designed for the quick and efficient coding and deployment of applications), and IaaS (the software and hardware that is encumbered with powering all of the other services, networks, operating systems, storage, servers) although viewed as distinct categories, the lines between them are increasingly becoming blurred and will continue to become so in the following years.

In this context, cloud hosting will continue to expand seeing how users will want to do away with the constraints imposed by traditional hosting products, and embrace the flexibility, power and reliability offered by the intertwined server network that makes up the cloud hosting environment. Small businesses will also be able to benefit from the cloud hosting environment and all aspects of cloud services since costs will become more affordable and businesses will be able to streamline and complete small and mid-term projects without any superfluous investments. Thanks to cloud computing services time, expertise and monetary constraints will no longer be a decisive factor since ready-made components of cloud infrastructure services will help overcome these roadblocks.

The cloud understood as the sum of its SaaS, IaaS and PaaS components has opened the way for innovation and tech giants such as Amazon, Microsoft and Google through their cloud-based services – Amazon Web Services, Microsoft Azure and Google Cloud Platform – are already paving the way for the new shift that cloud services and cloud computing will bring in the field of web and application hosting.

Conclusion

As consumers become more aware of the benefits of using cloud hosting services and cloud computing for their businesses, the way of doing business online and the way customers function will change. Workloads that used to exist in dedicated and VPS environments will move toward the widening range of infrastructure and application types encompassed today by IaaS-type solutions. Businesses that want to continue to thrive in this novel world of web and app hosting have to be nimble on their feet, and understanding and identifying technological and consumer response trends will be a critical part in that process.