META Group has announced the availability of its newest METAspectrum evaluation for the managed Web hosting outsourcing market. This market includes companies that provide facilities, infrastructure and services used to house and operate/manage Web hosting and related activities in North America.
Although the market is tiered at multiple levels / co-location, shared hosting, dedicated hosting, and fully managed / this analysis emphasises the fully managed segment.
"The $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 Les Stevens, META Group Consulting South Africa, Practice Leader, Security and Risk Management.
"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, emphasising business value over pricing."
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; however, there is room for improvement in service offerings. Customers should seek providers with strong financials, a proven track record, and a broad complement of services.
Key findings and guidance
This evaluation looks at 11 vendors: AT&T, BellSouth, Cable & Wireless, Conxion, Digex, EDS, Genuity, IBM, Qwest, Sprint and Verio. Following are some of the key findings:
* Market maturity for high-end managed services will not occur before 2005.
* A strong market presence is essential for leadership.
* The managed Web hosting market will be dominated by large players.
* Successful vendors will provide hosting services as part of a broader services portfolio.
* The key differentiator in the enterprise market is professional services.
* Vendors must demonstrate a commitment to Web hosting.
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