Market overview

The right platform

It is imperative for businesses today to maintain an effective and responsive IT infrastructure. To achieve these goals they are increasingly outsourcing IT services to third party hosting providers, and it is estimated that within five years¹ companies will have outsourced up to 70% of their IT infrastructure.

The hosting market splits as follows:

  • Mass hosting: includes standardised domain and webhosting services;
  • Managed hosting: A customer rents a physical or virtual server managed by the hosting company, while complex software solutions are specifically built for the customer. Services include: server hosting, virtual datacentres, and cloud servicing.

Hosting solutions are increasingly being offered through cloud platforms. Demand appears to have reached something of a tipping point with forecasts that cloud hosting, especially as part of the hybrid cloud, could achieve annual growth rates of up to 40% in coming years².


As infrastructure platforms become increasingly global, the privacy and security-related legal restraints around data become ever more significant.

Legislation governing the protection of data and intellectual property has become a huge issue for governments and is driving strict compliance and robust security measures in the hosting services market. For instance, in spring 2016 the EU adopted new regulations aimed at unifying Europe's rules on data protection to make it simpler for companies to manage their data.

In today’s 24/7 world companies are heavily dependent on IT infrastructure without disruption, and data processed in connection with hosting is often extremely important and confidential. As such, demand for increased security is one of the key drivers in the development of new and more complex hosting solutions.

Quality of service

This remains the key differentiator in the hosting industry with surveys consistently showing that price is not as important a purchasing factor as quality and trust. That means players need to show an overriding commitment to maintaining proper data security in an era when cyber threats are all too common.

M&A environment

Given these dynamics we have seen significant consolidation among hosting providers across Europe, driven by both Private Equity and trade players, with strong multiples also proving a major incentive for vendors.

¹ CenturyLink: Global IT trends

² Frost & Sullivan

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