New York, New York – (The Hosting News) – September 12, 2007 – A new quarterly report by Tier 1 Research, details noteworthy changes in market share, along with current trends, challenges and opportunities in the shared, virtualized service and standardized dedicated server segments of the mass-market web hosting sector.

Driving these changes are the continued proliferation of broadband access and web-enabled devices, along with the growing comfort with taking daily personal and business life online. This has led to emerging interest in collaboration tools, which is driving demand for web-based application services. Against this backdrop of change, shared hosting continues to be under attack from all directions, virtualized infrastructure is threatening to change the way hosting services are delivered, and open computing platforms are slowly beginning to challenge hosting market share.

The findings are contained in a report released by New York-based Tier1 Research (T1R), an independent research firm that analyzes the financial and industry implications of developments affecting public and private companies within the hosting, IT, communications and Internet sectors. This is the second report in the 2007 T1R Mass-Market Quarterly Series – a series designed to provide timely analysis and perspective on key technology trends and marketplace developments in mass-market hosting.

The 47-page report, titled ‘Mass-Market Hosting Quarterly, Fall 2007,’ recaps the key events of the quarter and assesses their impact. It provides analysis of changes in market share and offers detailed discussion and analysis of important trends and developments that were driving the mass-market hosting sector, as well as insight into where this market is going.

Philbert Shih, Senior Analyst at T1R and lead author of the report explained, ”Private equity is back in the sector, and some of the larger players are consolidating in the face of intense competition. Meanwhile, the Internet giants continue to make inroads, and web service firms and application developers not normally thought of as hosters are making their presence felt. All of these noteworthy changes are telling in terms of possible future directions for this marketplace.”

The trends covered in this report include:

• M and A Activity Heats Up Further: A busy Q107 was followed by an even busier Q207.
• Partnerships Provide Path to Success: Partnerships are the ‘holy grail’ for diversified product and service portfolios for hosters.
• The Hosting Market’s Evolution: The web presence and application worlds will eventually collide.
• The Social Networking Threat: Social networks continue to flourish, and the threat to hosters intensifies.
• More Moves From Google: Google took more steps to challenge the hosting sector, but it hasn’t put the pieces of the puzzle together yet.

Key Companies Covered Include:

Over 20 key public and private companies in the mass-market hosting sector, including: 1 and 1, Apptix, BlueFreeway, Endurance International, eNom (Demand Media), Facebook, Go Daddy, Google, Hostopia, Hostway, Mamut, MelbourneIT, Microsoft, Group NBT, Peer1 Network, Pipex, Rackspace, Register.com, Salesforce.com, The Planet, Tucows, Verio, Web.com, Website Pros, Yahoo!, Zoho.

The findings are contained in a report released today by New York-based Tier1 Research (T1R), an independent research firm that analyzes the financial and industry implications of developments affecting public and private companies within the hosting, IT, communications and Internet sectors. This is the fourth report from the T1R Mass-Market Quarterly Series a series of reports designed to provide timely analysis and perspective on key technology trends and marketplace developments in mass-market hosting.

Philbert Shih, Senior Analyst at T1R and lead author of the report explained, ”Web service firms not normally thought of as hosters have now successfully entered the sector. At the same time, the Internet giants continue to encroach on this sector as well. Ad-supporting hosting services remain young, but they are driving Google and Microsoft while also serving as an alternative revenue source for companies that take the necessary steps to reinvent the way they do business. All are important developments for a fragmented industry that is entering this critical period of transformation.”

The 45-page report, titled ‘A Review of the Mass-Market Hosting Sector – M and A is the DNA of change, but transformation continues to take hold,’ recaps the key events of the quarter and assesses their impact. It provides analysis of changes in market share and offers detailed discussion and analysis of important trends and developments that are driving the mass-market hosting sector in Q1 2007, as well as insight into where this market is going.

The trends covered in the report include:

• M and A activity on the rise again: After a slow Q4 2006, M and A activity gathered momentum with several smaller deals and a major transaction in the shared hosting space with Hostway’s acquisition of Affinity Internet.
• The changing competitive landscape: The competitive landscape continues to evolve as Web hosting increasingly becomes commodified and grouped within larger web service suites.
• Clustered hosting emerges: Clustered and grid hosting technologies are emerging and threaten to revolutionize traditional delivery models based on physical infrastructure.
• Google continues inroads: In Q1 2007, Google took steps toward becoming a factor in the mass-market hosting sector.

The report covers more than 20 key public and private companies in the mass-market hosting sector, including: Affinity Internet, Amazon, Apptix, BlueFreeway, Catalyst Investors, eBay, Go Daddy, Google, Group NBT, Hostway, Mamut, MelbourneIT, Microsoft, Network Solutions, Peer1 Network, Pipex, Rackspace, Register.com, The Planet, Verio, Web.com, Website Pros, Yahoo, 1 and 1 and 3Tera.

Hostway’s Affinity Internet, provides over 200,000 web professionals and small businesses the tools to develop, maintain, market and support their web presence. Affinity’s brands include: ValueWeb, for web design, eCommerce hosting and online marketing solutions and Gate.com, the cutting-edge UNIX and Windows web hosting service. Affinity’s co-brand and private-label partner programs are designed to enable service providers and Internet brands to extend value proposition to include web site, ecommerce and online marketing services and applications. Affinity’s services are supported by its customer service ”success guides,”- designed by knowledgeable consultants for small businesses growth and success.

Tier1 Research (T1R), a division of The 451 Group, analyzes the financial and industry implications of developments affecting public and private companies within the IT, communications and Internet sectors. Tier1 blends traditional Wall Street investment research with industry analysis to deliver dynamic market and financial intelligence. Clients include institutional investors and technology vendors, along with end users and venture capitalists. Clients leverage Tier1 Research’s analytical insight for idea generation, trend identification, due diligence and grounded opinions, as well as metrics and forecasts on companies and industries covered. Since its founding in August 2000, Tier1 Research’s coverage has spanned the largest publicly held technology companies as well as smaller, pioneering public and privately held companies.

To learn more, please visit: www.tier1research.com.

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