Overview of the Report
The global web hosting services market was worth USD 56.7 billion in 2019 and is expected to grow at a 15.5 percent compound annual growth rate (CAGR) from 2020 to 2027. Web hosting services are classified into several types, including shared, colocation, dedicated, and Virtual Private Server (VPS). The service enables businesses and individuals to use an internet-based website to publish business-related and personalised content. Over the forecast period, a growing number of organisations from around the world are expected to boost market growth. These organisations make their websites available on the internet in order to increase their online presence and for marketing purposes.
Statistics for the Web Hosting Services Market – 2027
The global web hosting market was worth $57.46 billion in 2019 and is expected to be worth $183.05 billion by 2027, growing at a 15.2 percent CAGR from 2020 to 2027. Web hosting is an online service that enables the publication of a web application or website on the Internet. Individual website hosts provide web hosting services in the form of collective service offerings. Hosts provide virtual private servers, collocated hosting, dedicated hosting, shared hosting, and cloud hosting. Superior performance, increased security, and increased security are some of the advantages of advanced web hosting services.
Due to public cloud hosting benefits such as scalability, flexible pricing, extreme reliability, and high performance, the public cloud segment exhibited the highest growth in the web hosting services market in 2019 and is expected to maintain its dominance in the coming years. The aforementioned benefits drive the increased adoption of this type of deployment model by small and medium-sized businesses. However, due to the advantages that hybrid cloud provides over private and public cloud, the hybrid segment is expected to grow the fastest. For example, when compared to public cloud, these deployment models provide a higher level of security and uptime.
Insights into Type
In terms of revenue, the shared hosting segment dominated the market in 2019, accounting for 37.64 percent of the total. This high share can be attributed to the widespread use of shared hosting servers, particularly among small and medium-sized businesses. Because of the low website traffic, most small and medium-sized businesses prefer this type of hosting. Furthermore, these SMEs are prevalent in every region and account for more than 90 percent of all businesses. Despite the fact that shared hosting is less expensive than other types of hosting, a large number of SMEs and individuals prefer it. As a result, this segment has the largest market share.
As businesses expand and web traffic increases, they may opt to transition from shared hosting to other types of hosting services such as VPS, dedicated, or cloud hosting, among others. Large organisations typically use dedicated hosting because they require a high volume of web traffic. Another reason for choosing dedicated hosting is the availability of funds, as the costs associated with it are quite high. Due to budget constraints, small and medium-sized businesses find it difficult to select dedicated servers for their business needs. However, the high levels of security and uptime provided by dedicated hosting are expected to contribute to the segment’s healthy growth rate.
The Effect of COVID-19
The COVID-19 pandemic outbreak has caused unprecedented disruptions in physical business infrastructures, as governments around the world have been forced to impose lockdowns and social distancing measures to halt the virus’s spread. For example, the National Bureau of Economic Research (NBER) found that 43 percent of respondents expected a temporary or permanent shutdown of business in the United States in 2020 as a result of the pandemic. Similarly, a private survey in India revealed that the pandemic is expected to affect 74% of the country’s startups. As a result of this dire situation, the market is expected to grow at a slower CAGR of 11.9 percent and reach a value of 83.99 billion by 2021.
Examining each segment
The web hosting services market is divided into types, deployment models, applications, end users, and regions. Website builders, shared hosting, dedicated hosting, collocated hosting, and others are the various types. According to the deployment model, it is divided into three types: private cloud, public cloud, and hybrid cloud. It is classified into four types based on the application: public website, intranet site, mobile application, and web application. It is divided into two categories based on the end user: enterprise and individual. It is divided into four regions: North America, Europe, Asia-Pacific, and Latin America and the Caribbean.
The Impact of the COVID-19 Pandemic on the Market for Web Hosting Services (Pre and Post Analysis):
The current estimate for 2027 is higher than the pre-COVID-19 estimates. The COVID-19 outbreak has had little impact on the growth of the web hosting services market, as adoption of web hosting services has increased in the face of unprecedented circumstances. Because most business owners have begun to sell their products and services online, the pandemic has significantly increased demand for web hosting services. By providing an online virtual space, web hosting providers have enabled businesses to showcase their products and services on their websites.
Furthermore, several market participants provided free hosting services for a few months to assist businesses during COVID-19 and to lift them during the pandemic. Mailchimp announced in July 2020 that it would assist small businesses during the COVID-19 crisis by providing free custom domains for up to 5 years, as well as a free website builder, until June 30, 2020.
Top influencing factors
The rise in the number of SMEs around the world and their efforts to have an online presence; the proliferation of mobile marketing platforms; the rise in demand for managed web hosting services; and the availability of web hosting services with excellent server performance and features at the lowest prices are driving the growth of the global web hosting services market. Furthermore, the rise in demand for best hosting services during the COVID-19 pandemic is expected to propel the web hosting services market forward. However, the challenges of providing scalability and maintaining uptime may limit market growth to some extent. Artificial intelligence (AI) in web hosting, on the other hand, and the increased adoption of cloud-based gaming solutions are expected to provide lucrative opportunities for market growth during the forecast period.
Increase in the number of SMEs around the world and their efforts to establish an online presence
Regardless of the industry vertical in which they operate, it has become critical for businesses to have an online presence. According to recent Google studies, 97 percent of customers worldwide use the web to search for local businesses and the services that they provide. As a result, there is an increase in demand for startups and SMEs to use web hosting services in order to reach their target audience and make their business more viable and genuine to them.