January 4, 2002 — (WEB HOST INDUSTRY REVIEW) — Research firm the Yankee Group (yankeegroup.com) has released
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its popular annual “Prediction Edition” for 2002. Each of the Group’s
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research teams have considered last year’s predictions, assessed their
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accuracy, and forecasted trends for the next year.
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Among the predictions made:
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“Managed network services will not sell themselves.” Yankee Group
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says enterprises will approach increasingly-hyped managed services with
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caution, until they can see real economic or service value from them. Only
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13.5% of large businesses are currently outsourcing / out-tasking network
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operations, and only 12.3% are considering the option.
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“Hosting vendors’ sales and marketing efforts will markedly shift
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from customer acquisition in 2001 to client up-selling and retention in
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2002.” As customer acquisition is becoming less popular, the focus of
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vendors’ hosting strategies next year will be to retain their existing
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client base while drilling deeper into those accounts. Service offerings
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will revolve around practical needs like site marketing tools, and less
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glitzy applications like video streaming. Web hosts will also concentrate on
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improving services to become more user-friendly, such as e-commerce, Web
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analytics, and better customer support overall.
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“In-house remote access VPNs will lose ground to managed solutions,
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which will narrow the gap by 50% in 2002.” Although in-house remote access
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VPNs outnumber managed services by 2:1 in 2001, the ratio will close to 3:2
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by the end of 2002, the Yankee Group predicts. More service providers will
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be bundling remote access with Internet access, and in some cases
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collaborating with hardware vendors, a service that will be adopted by
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smaller, less technically sophisticated SMBs. Inhibiting managed services
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will be still be preferred among larger SMBs, to control their own network
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services and lower long-distance phone rates.
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“In 2002, 21% of medium businesses currently using DSL to access the
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Internet will abandon DSL in favor of more reliable broadband alternatives,
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namely dedicated T-1 access.” Companies that used DSL as a means of cheap
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entry to test the value of a broadband connection will be convinced of the
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value of the Internet, but frustrated by the lack of reliability and
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consistency of DSL. However, the overall market penetration of DSL will
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increase in the SMB market, especially among very small business.
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“Application service providers will reinvent themselves by becoming
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vertical service providers (VSPs) or providers of pre-integrated application
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solutions, or will go out of business.” ASPs will be able to gain footing in
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the market by developing solutions for specific vertical markets, such as
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health care. Successful companies will be to offer a new solution to big
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problems.
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“Dedicated hosting explodes in Europe as more sophisticated new
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enterprise users emerge.” The Yankee Group has forecasted 2002 to be the
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year of the more sophisticated Web hosting customer. Shared hosting will
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officially become a low-end commodity, with fewer enterprise users opting
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for it. Web hosting service providers will be focusing on providing
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quick-start dedicated hosting packages to support smarter, more ambitious
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new customers.
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The full Prediction Edition is available online at
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http://www.yankeegroup.com/ygrn1-1-2002.html.
About theWHIR.com
Since 2000, The Web Host Industry Review has made a name for itself as the foremost authority of the Web hosting industry providing reliable, insightful and comprehensive news, interviews and resources to the hosting community. TheWHIR is an iNET Interactive property. For more information on iNET Interactive, visit http://www.inetinteractive.com
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