Hosting Revenues to Escalate in 2002 , IDC Predicts

• By theWHIR.com , February 12, 2002

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February 12, 2002 -- (WEB HOST INDUSTRY REVIEW) -- The dot-com bubble has burst, corporate spending is in aholding pattern and enterprises are deferring e-business infrastructuretechnology and services purchasing. As a result, revenue growth in the U.S.Web hosting market has definitely slowed. The market which had approached $4billion in 2000, representing a 100% growth over 1999, grew only 25.5% from2000 to 2001. IDC research still shows revenue in the Web hostingservices market will begin to accelerate in 2002 eventually reaching $20.8billion by 2006.

"Enterprises are streamlining their internal business processes and openingnew channels for customer service and product/service delivery,distribution, and procurement by leveraging application servers toWeb-enable their core business applications and using the Internet as atransactional and connectivity medium for intra- and inter-companyexchanges," said Melanie Posey, program director, Web hosting. "In otherwords, the market is evolving away from the dot-com era model of'Internet-as-the-business' to the post-bubble notion of 'business on theInternet.'"

The primary factor behind the Web hosting slowdown is the state of theeconomy, IDC said. In 2000 there were many components helping to drivegrowth in Web hosting including a robust U.S. economy, a vigorous ITindustry and the Internet. All of that changed in 2001 but nevertheless,enterprises are only just beginning to leverage the full potential of Webhosting based opportunities and the market will continue to grow.

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