Industry concentration is rising as larger, publicly listed companies acquire smaller brands to grow subscriber numbers
New York, NY (PRWEB) September 05, 2014
The Internet Hosting Services industry has benefited from surging business demand for an online presence over the past five years as an increasing amount of commerce is being conducted online. The industry specializes in providing leased server space to individuals and organizations to make their websites accessible over the internet, but also provides a number of additional services like selling domain names, email hosting and search engine optimization. According to IBISWorld Industry Analyst Andy Brennan, “Increasing internet penetration and the proliferation of mobile devices has changed the way that consumers discover and transact with businesses, leading to greater demand for industry services from small and medium-sized businesses.” As a result, the industry has fared well over the period, with revenue estimated to grow at an annualized rate of 10.7% to $11.0 billion, including an anticipated 5.2% increase in 2014.
The industry is highly fragmented, with the top four companies controlling only 11.3% of the overall market. While industry competition is high, providing services is relatively straight-forward. Industry concentration is rising as larger, publicly listed companies acquire smaller brands to grow subscriber numbers. For example, in 2012, Endurance International Group purchased HostGator, which was one of the biggest web hosting companies in the United States at the time, for $299.8 million. Likewise, Web.com Group purchased Net Sol Parent LLC, owner of Network Solutions, a provider of domain names, web hosting and online marketing in 2011, as well as Register.com LP, another provider of domain names and web services.
The industry's growth is not expected to slow anytime soon. As technology required to process and host websites and perform additional industry services becomes more complex, the level of expertise needed to effectively manage large data centers will increase. “Small and medium-sized businesses will require more complex websites that serve both desktop, mobile and tablet interfaces, meaning they are likely to require value-added website design and management services from industry operators in addition to web hosting,” says Brennan. More enterprises are likely to enter the industry to cater to rising demand, with the number of enterprises anticipated to rise 4.2% per year on average to 21,465.
For more information, visit IBISWorld’s Internet Hosting Services in the US industry report page.
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IBISWorld industry Report Key Topics
The Internet Hosting Services industry provides internet hosting services to third parties. These services most commonly take the form of website hosting, where industry operators provide leased server space and internet connectivity to individuals and organizations to make their websites accessible over the internet. Operators also provide application-specific services, such as email application hosting and game hosting.
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