How much exactly is spent on web hosting per year across the world? I mean, is this just a multi million or a billion dollar industry?

Are you kidding? This is a multi BILLION $$$ a year industry.

All those sites you see need to go somewhere.

Originally posted by NetXL
All those sites you see need to go somewhere.
Yep. It's a great place to be. :D

I came from the building industry that was shrinking and becoming too regulated by the government. It's a nice change of environment. :)

It's not just the hosting that is associated with this business. Remember, before you can buy a hosting plan, the company you choose must first buy the servers. Those should be accounted for in the same equation. It is definitely in the billions if not higher. I'd take a million and be happy. :rolleyes: Now what's the harm in that?

I was just curious of the industry really.

A variety of research groups have attempted to quantify the spending in the hosting market. I've analyzed most of this research from Ovum, IDC, Mainspring, and Forrester. Here are my year-by-year estimates. The prior years are pretty accurate since they're based on actual performance. However, I've also made guesses at some of the numbers in the event I couldn't find a specific source. Note: all figures are in billions of dollars. I've also cited the source of the data.

1999 - 1.8 (IDC)
2000 - 4.0 (IDC)
2001 - 10.3 (Ovum)
2002 - 14.6 (Extrapolated)
2003 - 18.9 (IDC)
2004 - 19.8 (Forrester)
2005 - 32.9 (Extrapolated)
2006 - 46.0 (Ovum)

As far as I'm concerned, 2005 and 2006 are weak guesses. Another key metric that you have to look at is the number of new domains registered. My estimates indicate that the growth in new domains is decreasing, so it's hard to say that the hosting market will boom to 46B in 2006. Still, you never know...

Hope this helps.

Within the next few years the economies of the world will collapse and anarchy will reign...
Invest in canned food and bullets...

Originally posted by aquick

As far as I'm concerned, 2005 and 2006 are weak guesses. Another key metric that you have to look at is the number of new domains registered. My estimates indicate that the growth in new domains is decreasing, so it's hard to say that the hosting market will boom to 46B in 2006. Still, you never know...

I wonder if they also took into account the price fall factor. In 2002, you can host 4 or 5 domains for what you paid for 1 in 1999. In terms of monetary size, I think the industry has probably peaked. At least until the market corrects the saturation issue.

I agree.

The question is: how will the saturation in the market slow down/end?

Originally posted by aquick
I agree.

The question is: how will the saturation in the market slow down/end?


The answer that I'm sure a lot of people will give you (even though I don't agree with it) is the end of Cogent.

Never heard that one before. Help me make the connection... I don't see it..

Cogent provides bandwidth alot cheaper than providers with real backbones. This allows companies like Rackshack to provide $99 servers, and other companies to provide very low-cost colocation.

When Cogent dies, it will force Cogent-only providers* to sign on with real backbone providers, which will raise the bandwidth costs of the data center providers. They will have to pass these additional costs to their hosting customers, who will have to pass it on to their customers...and prices will raise.


* Yea, yea, Rackshack has 20 million providers...yada yada

I agree that cognet may look a little bit unsteady now... BUT i highly doubt that they are going to be going out of buisness. I heard somewhere that they are trying to increase the quality of their services drastically, and by 2004 they should be making profits. I am sure that at least by 2003, early 2004 cognet will have made many changes that will increase the quality of their service, yet keep prices low. Especially after 2004 when they are actually making big profits, they will have the money to expand.

Just my 2 cents :D

Its great that they plan to turn a profit by 2004, its a shame they only have enough money to last through the middle of 2003.

Originally posted by bambenek
Within the next few years the economies of the world will collapse and anarchy will reign...Invest in canned food and bullets...
:eek: :eek2: :eek3: :rolleyes: :D :stickout

Spam can last 10 years in a can without going bad :blush:

Spam !

andy: hmmmmmmmmm good......

Jed: yeeeeeeeee doggies......


:cool:

Intel recently retreated from web hosting. Enough said.

Yep. And the day before Intel made that announcement, EDS announced they were buying LoudCloud's managed hosting business for $63M and LoudCloud is going back to developing automation software (Opsware, which is what LoudCloud is going to call themselves once the transaction is complete).

I'm amazed that IBM has fared so well in this market. They don't own an internet backbone yet they manage more data centers than anyone....

hehe, i always thought you were a builder :)

But your picture reminds me of crocodile dundee lol ;)

No offence, its meant to be a compliment.

Originally posted by Aussie Bob

Yep. It's a great place to be. :D

I came from the building industry that was shrinking and becoming too regulated by the government. It's a nice change of environment. :)

Originally posted by edude
hehe, i always thought you were a builder :)

But your picture reminds me of crocodile dundee lol ;)

No offence, its meant to be a compliment.


hehe. Watch it. I have a big.......























......knife :D

:D

I don't think cogent's success or failure will do much to the saturation issue. Remember the old days when we paid $400+ for servers and get about 50-60 gigs of transfer. Now you get 500+ gigs for less than $200 per month. So even if cogent is gone, those datacenters are still having their price wars and will still offer cheaper servers -- although with probably less bandwidth than they do now.

I personally think that the end of the saturation will come gradually when more and more people stop believing that leasing a server will make them millionairs overnight.

Originally posted by bambenek
Within the next few years the economies of the world will collapse and anarchy will reign...
Invest in canned food and bullets...

Or invest in developing the SSTP (Smoke Signal Trnasmission Protocol). When those times come, we will connect our servers using smoke signals from the top of mountains :D

the internet will go to 1 bit a second...... i can see it now:

server 1: "send up 010100111101001001110010101011"
(smoke puffs go up)
server 2: (watching with binoculars)
"hmm... thats, uh, 010100.. damnit, missed that last one. bah, missed the next one too. aaahhhhhhh, i'm too far behind. tell them to start over"
:D

That's why we have parity :D

This would also increase redundancy...just start two fires :).

Originally posted by Wazeh
I don't think cogent's success or failure will do much to the saturation issue. Remember the old days when we paid $400+ for servers and get about 50-60 gigs of transfer. Now you get 500+ gigs for less than $200 per month. So even if cogent is gone, those datacenters are still having their price wars and will still offer cheaper servers -- although with probably less bandwidth than they do now.


Originally posted by uuallan

Cogent provides bandwidth alot cheaper than providers with real backbones. This allows companies like Rackshack to provide $99 servers, and other companies to provide very low-cost colocation.

When Cogent dies, it will force Cogent-only providers* to sign on with real backbone providers, which will raise the bandwidth costs of the data center providers. They will have to pass these additional costs to their hosting customers, who will have to pass it on to their customers...and prices will raise.

Originally posted by uuallan
This would also increase redundancy...just start two fires :).
:laugh: and have your own cluster with 10 fires going :laugh: :D

So the Arizona fires was a Class A network?

Originally posted by timechange
So the Arizona fires was a Class A network?
:rolleyes: :D

Im going to start investing in some Fire Wood and fire starters!

Have about 20 Arcenist working for me and we will become a backbone!

:D

Regards

Zippo & BP stock will rise :D

Originally posted by timechange
So the Arizona fires was a Class A network?

Actually that would be a DoS attack :D

I personally think that the end of the saturation will come gradually when more and more people stop believing that leasing a server will make them millionairs overnight.

That makes sense. But its going to take a long time. People are starting hosting businesses at very young ages (nothing wrong with that, just an observation), so how/when do you think the belief (of being an overnight millionaire) goes away if every year, a new group of high school students start new hosting co's. It would seem that as failed hosting companies close shop, new ones will be started regardless.

It's an interesting trend to follow. And just to over-state my point, I'm not knocking the fact that young web hosting business owners exist. Purely an observation.

Originally posted by aquick


That makes sense. But its going to take a long time. People are starting hosting businesses at very young ages (nothing wrong with that, just an observation), so how/when do you think the belief (of being an overnight millionaire) goes away if every year, a new group of high school students start new hosting co's. It would seem that as failed hosting companies close shop, new ones will be started regardless.

It's an interesting trend to follow. And just to over-state my point, I'm not knocking the fact that young web hosting business owners exist. Purely an observation.

The reason why these youngsters are starting new hosting companies is the stories they hear from friends who have succeeded, or stories they see on tv news etc... In the upcoming months, we seem to be on the verge of some serious economic trouble (in the US at least if not world wide) and then all the news will be gloomy. By then nobody will start a new host and we will probably start to see some consalidation with plenty of the current hosts merging or simply going out of business.

Taking a look at the advertisement forums shows that we are very close to the peak. Hosts are operating on GP that's less than that of supermarkets.

Agreed.

Given the headroom in the grocery biz is around 2-3%, consolidation is imminent.

Originally posted by NetXL
All those sites you see need to go somewhere. Couldn't be put better.