Parallels recently conducted a survey of its certified Partners and I wanted to share one of the most interesting findings. Of the 85 Hosters that participated in the study, 74% indicated they expect VPS hosting revenues to increase over the next 12 months with only 4% predicting a decrease. This compares 69% expecting an increase in Dedicated hosting with 13% expecting a decrease. For Shared hosting, 57% expect an increase and 12% expect a decrease.
In short, VPS hosting is expected to be the primary revenue driver among traditional hosting plans over the next year.
The results are even more revealing when the survey respondents are grouped by the total number of servers under management. For those Hosters managing less than 500 servers (which was 75% of the sample), 88% expect an increase in VPS revenues over the next 12 months compared to 65% and 63% for Dedicated and Shared, respectively. Conversely, for the 25% of the respondents that manage over 500 servers, 86% indicated Dedicated hosting would increase over the next 12 months compared to 43% and 48% for Shared and VPS, respectively.
Two conclusions jump out of these numbers.
First, for those Hosters that have a smaller data center footprint, VPS hosting is overwhelmingly seen as the growth engine over the next year. This makes a lot of sense given the “economies of density” achievable with VPS hosting especially when trying to maximize the efficiency of data center space. Second, those Hosters that manage a larger footprint presumably have a core business of Dedicated hosting already, and this group of Hosters expects its core business to continue to thrive.
About Joshua Beil
Joshua Beil (@joshbeil) is the Director of Market Strategy and Research for Parallels, the leading provider of automation and virtualization software to the web hosting community. Previously, Josh was the Director of Social Media & Technology at a Level 3 Communications [Nasdaq: LVLT] where he provided strategic and tactical sales support. Before that, Josh was CEO and cofounder of Skywave Broadband, Inc, the largest commercial WiFi service provider in Hawaii. He was named one of Pacific Business News' Forty Under 40 for 2006, and in 2005, he was named a High Tech Leader by the Pacific Technology Foundation. Before co-founding Skywave, Mr. Beil was VP of Research and Development for the market research boutique, Tier 1 Research, where he covered the Internet infrastructure sector as an analyst, and negotiated and sold subscriptions to Tier 1's research services. Josh has also previously served as the Senior Analyst for Exodus Communications as well as the internationally known market research firm, IDC. He holds a Certificate in E-Business from UCSC Extension, and he graduated with honors from the University of California at Santa Cruz with a major in Psychology.
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