Web hosting is rapidly converging with cloud system infrastructure services. For the last several years, the market has been evolving toward on-demand infrastructure provisioned on a flexible, pay-as-you-go basis, but the introduction of cloud computing offerings has radically accelerated innovation in this market. The economic downturn has accelerated adoption of these offerings, thanks to the cost-savings that can be achieved by the move from physical to virtual services, and from purchasing for peak capacity to obtaining what you need only when you need it. The majority of hosting customers now obtain at least some of their infrastructure on-demand, and most new hosting contracts include on-demand services. This evolution has quickly changed the vendor landscape, bringing many new entrants to rapid prominence, as well as decreasing the relevance of hosters who have failed to make this shift.
The Web hosting market is in the midst of business and technological transformation. Over the next five years, the cloud trait of elasticity will come to dominate this market. Although customers are, over the long term, still likely to sign multi-year commitments for managed services, the infrastructure itself will be obtained on-demand.
This is a time of both great opportunities and great risks for Web hosters. New entrants are altering the landscape, and established hosters that previously lagged the market have been able to make bold investments in an attempt to catch, or even overtake, more established competitors. Hosters must execute the change to the business and technology model without disruption to their existing customer base. Many established providers are investing aggressively in technology innovation and exploitation, and we expect that some will engage in mergers and acquisitions in order to decrease their time to market and obtain engineering expertise with new technologies.
Some customers choose a fully managed service, in which the Web hosting provider manages everything except the application code. Others prefer to choose from a menu of a la carte management services; for instance, some need just database administration services, while others want junior-level systems administration tasks like patch management handled for them but want to do all the complex work themselves. Also, the number of customers who want to self-manage is increasing rapidly; these IT managers want to take advantage of the cost efficiencies of a provider’s scale and automation tools, but do not want to relinquish control. Your choice should depend upon your needs and IT capabilities.
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