Sweden Develops Potential as Strong Hosting Market Adam Eisner, theWHIR.com
January 14, 2003 – When the Europe’s Web hosting market began to take shape several years ago, a great deal of focus was placed on the United Kingdom’s relationship to the rest of the continent. The UK was widely viewed as the “gateway” to Europe, particularly in North America; this was because the first stop for many transatlantic fiber gateways was the UK, and because many firms first established UK offices when attempting to establish a footprint in Europe.
As the industry began to grow, however, it quickly became apparent that the UK was not the only area in Europe that was experiencing an increase in demand for Web hosting services. Other western and central European nations, such as France, Italy and Germany also saw their hosting sectors expand significantly.
But despite all of the growth Europe’s Web hosting industry has experienced, there are still sizable chunks of the continent that have seen their hosting sectors remain largely underdeveloped. One such market that now appears to have a great deal of potential in the near future is Sweden.
The fact that Sweden is has not been traditionally viewed as a “hot spot” for Web hosting companies in Europe is hardly surprising, as the Scandinavian region is widely heralded for its innovation in the wireless sector as opposed to Web hosting. However, there are now several indicators that there may be some golden opportunities for service providers in the area in the near future. A wired, tech-savvy population, increasingly important geographic location and a strong nationwide network infrastructure are now creating opportunities for high-tech firms like Web hosting and other outsourcing operations.
One very positive development is that Sweden is now widely regarded as one of the “most connected” Internet nations in Scandinavia, with close to 70 percent of the country’s population having access to the Internet. The country is also highly ranked in terms of availability of computers in each household, with approximately 75 percent of Sweden’s population now having a computer at home (in the late 1990s, the Swedish government led a subsidy initiative to help households purchase PCs). This is a positive sign for hosting companies hoping to land Swedish customers, as wired homes eventually lead to wired businesses and lucrative profits from both individual and commercial accounts.
Sweden may soon also end up playing a larger role in Europe’s Web hosting market because of its proximity to the Baltic States. Much like the United Kingdom acts as a gateway to Europe for many North American tech firms, Sweden may soon assume a similar role because of recent expansion by the European Union. Expansion of the EU, which will bring in several new member nations, will place Sweden in a key position in northern Europe and should greatly strengthen relations with Baltic States like Estonia and Latvia.
Many higher-end tech firms have already leveraged the country’s potential, and Sweden is now home to the offices of several notable companies. Compaq, EDS, Hewlett-Packard, IBM, Intel, Microsoft, Nortel Networks, Oracle and Sun Microsystems are among many of the giants that have already established a presence in the country according to the Invest in Sweden Agency (ISA), which aims to promote business development in both Sweden and northern Europe. The organization also recently announced that three more North American firms had decided to open regional offices in Sweden: Altiris, a provider of systems management solutions, Citrix, a developer of virtual workplace software and services and FileNET, a content management firm, all recently set up shop in Sweden. Given the belt-tightening of most firms and the state of the high-tech market in general, this is no easy feat.
Of course, penetrating a hosting market like Sweden’s is not without its challenges. The country’s cultural and language barriers would be challenging to overcome; as a result, hosting firms that are planning on expanding in to the area would be well served to conduct a great deal of research prior to making any significant moves, or to even consider a local acquisition. Establishing a data center presence in a largely untouched market does not guarantee success, as ill-fated Scandinavian adventures like Worldport’s should remind us.
