Web Hosting Market Expanding For SMBs
2005-06-08 09:32:00
According to a new report from the Yankee Group, the Web hosting market continues to expand rapidly, driven by the increasing numbers of small and mid-size (SMB) companies offering online services.
Currently, 60 percent of SMB and mid-market enterprises have a direct Web presence, and the growth of the Web hosting market is being driven by their customers' desire for an online experience that is "compelling, reliable, and credible," according to the study.
Medium-sized businesses have the highest adoption of Web hosting services, with an 87 percent penetration rate. Companies with 2 to 99 employees saw a 10 percent increase in adoption of Web hosting services. Although businesses with 2 to 19 employees also experienced an increase in adoption rate, the growth of Web hosting services among these very small companies relied heavily on outsourcing to hosting companies, according to the study.
The Yankee Group believes the market is positioned for additional growth, especially as SMBs use hosting services for cost-effective generation of sales leads. Pricing is expected to be the top criteria for choosing a Web hosting vendor.
"Full adoption of web hosting among SMBs and mid-market enterprises is imminent as companies become more reliant on hosting services for strengthening business transactions and processes in sales and marketing," said Sanjeev Aggarwal, Yankee Group senior analyst, in a statement. "Because the days of 'one size fits all' focus are over, the need for customized, high-value web-hosting services is the winning solution for SMBs seeking to maximize ROI and for vendors looking to obtain greater differentiation and market leadership."
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