Managed hosting market set for growth

Web Services, utility computing and outsourcing will accelerate growth in the managed hosting market, predicts Meta Group.

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By  Neil Denslow Published  May 1, 2003

Following its latest review of the managed web hosting outsourcing market, which includes companies that provide facilities, infrastructure, and services used to house and operate/manage Web hosting and related activities, Meta Group is predicting huge growth opportunities for the sector.

"The US $2.7 billion market for managed hosting services is slowing to a 23% growth rate as many customers consolidate contracts and migrate services in-house," says Corey Ferengul, vice president and principal analyst with Meta Group's Operations Strategies.

"Emerging industry trends that will accelerate hosting market growth include Web services, utility computing, and the general emphasis on outsourcing as a strategy to reduce costs and extend capabilities. The outsourcing relationship should be viewed as a trusted strategic relationship, emphasizing business value over pricing," he adds.

The managed Web hosting market has undergone significant change during the past year, but Meta Group anticipates more stability in 2003. Large providers dominate the managed Web hosting market, but the analyst house says there is room for improvement in service offerings. It also advises customers to seek providers with strong financials, a proven track record, and a broad complement of services.

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