One Play Ahead: Trends for Web & App Hosting

A big part of what makes an elite offensive player who he is on the ice is the ability to think the game one-play ahead. Gretzky was less concerned with where the puck was and more with where it was going to be next, along with knowing exactly what he’d do with it once the puck was on his stick. Here at 4GoodHosting, we’re a top Canadian web hosting provider who similarly likes to look ahead at trends is the web and app hosting world that will dictate how we should adapt to best serve our customers.

This blog post is based on data from a comprehensive report from 451 Research, and it gives significant insight on where the marketplace should be within 2+ years. It highlights in particular the meteoric rise in demand for managed web hosting in Canada, and how growth for web and application hosting has slowed predictably in recent years.

That’s not necessarily cause for alarm, though – it just means the plays are slower to develop now. Technology is evolving. All you have to do is take the pulse of your own web or app hosting business. Workloads tend to be moving out of the web and app hosting category, and that’s true of some products as well.

Many are responding by shuffling the IT services deck for data-gathering purposes. More and more service providers are specializing, serving a narrower or niche target market. New service categories are emerging, and we realize that we need to analyze the user preferences of our customers very insightfully right now to see where we can best put the bulk of our services technology to work for you.

Here are the numbers of the report, with three statistical predictions:

  1. As a category, web and app hosting will grow from $18.2 billion in 2015 to $25.8 billion by 2019.
  2. Total hosting revenue will increase at an annualized rate of 15.5%. What’s interesting is that the “balance of power” in terms of revenue drivers has shifted. Managed hosting is growing at a far faster rate than web/app hosting.

Here’s how that 15.5% breaks down:

  • Dedicated hosting should grow about 5.7% per year
  • Shared hosting should grow about 10.4% per year
  • Managed hosting should about 18.7% per year
  1. In market share:
  • Web/app hosting will drop from 36.8% to 28.5%
  • Managed hosting will increase a mammoth 71.5%

Promoted Changes

The evolution of technology has changed the way every business competes. There have been discernible shifts in the way customers function and think about IT, and it necessitates changes to the way folks like us will approach our future moves regarding web and app hosting.

A reduced number of workloads need to be managed as part of service delivery. Internet-based infrastructure is increasingly common these days, and ever greater numbers of enterprise workloads exist in hosted environments. IAAS is gaining a lot of ground with web masters whose workloads previously existed as a dedicated hosting environment or VPS.

Further, certain environments are now considered to be part of managed hosting. Increasing modularity of managed services means more versatility, and it’s timely for a widening range of infrastructure types and applications.

Constant Change

Identifying and understanding trends is a must for hosting providers. As a business in this industry you need to keep your feet moving and have your head on a swivel, again like your anticipating where the play is going and the puck is going to be.

Customers are going to be struggling to find these new IT solutions for their businesses, and we imagine every reputable Canadian web hosting provider is going to be very proactive in responding to the new industry realities.

Promising Predictions

The ever-constant growth of the web for business continues to steam ahead as a whole. 451 Research volunteers that the sector should see an additional $7.5B in revenue each of the next few years. That’s a large pie to be pieced, but those who want a little more of it will have to reinvent their business model and very likely the marketing strategy that goes along with it.

Continued growth for web and app hosting will primarily come from 2 sources:

  • Adding new subscribers to grow your customer base
  • Adding new services you can sell to existing customers

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