Cyber attacks and security concerns will create future challenges for the industry.
Melbourne, Australia (PRWEB) February 22, 2014
Over the past five years, the Internet Hosting Services industry has struggled to achieve the same levels of growth as recorded in the years prior to 2008-09. The industry has had to contend with rising competition from foreign internet hosts, and has faced falling demand from users that are increasing tech savvy. According to IBISWorld analyst Ryan Lin, “over the five years through 2013-14, industry revenue is expected to grow at an annualised 1.9% to total $428.6 million”. This moderate growth has been aided by the growing online presence of businesses, with e-commerce taking the Australian economy by storm. “In 2013-14, industry revenue is forecast to grow by 2.1%, following successive years of stronger growth since 2011-12”, Lin said. Profit levels are also on the decline as costs increase while revenue generation slows.
The Internet Hosting Services industry exhibits moderate levels of market share concentration. The industry is highly competitive and fairly fragmented in nature. Major players include Telstra Corporation Limited, Melbourne IT Ltd, Macquarie Telecom Group Limited and IBM A/NZ Holdings Pty Limited. A large number of major technology and telecommunication firms have developed types of cloud services that are available in the market. The industry also includes a large number of small companies that traditionally offer small-scale hosting services. There is a trend of increasing market share concentration, as larger companies acquire specialist businesses particularly in the cloud space to further expand their services.
Over the coming five-year period, the Internet Hosting Services industry is anticipated to continue its struggle against foreign competition and falling demand. Downstream users are anticipated to bring website hosting in-house instead of outsourcing to an industry operator, due to the security concerns raised by a number of high profile cyber attacks. However, web security has also prompted foreign operators to set up shop in Australia to cater to Australian businesses that want to keep their data within Australian borders. Another silver lining for the industry comes from e-commerce and online retailers, with demand for the hosting of online shops continuing to grow at a strong pace.
For more information, visit IBISWorld’s Internet Hosting Services report in Australia industry page.
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IBISWorld Industry Report Key Topics
Companies in this industry run internet servers from data centres, which allow content to be stored and accessed via the internet. Hosting covers a wide range of online storage options, including web hosting, email hosting and DNS hosting.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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