Web Hosting After Covid-19: Facts and Stats
To say that the global economy wasn’t prepared for the Covid-19 pandemic would be an understatement. For example, in the US, the unemployment rates shot up to 14.8% in April 2020 – the highest level ever since data collection started in 1948.
A single virus managed to put an end to many businesses across different sectors of the economy. Still, it’s fair to say the web hosting industry managed to get away relatively unscathed.
Let’s see if we can figure out why.
Web Hosting Industry Statistics
Before we take a look at how the web hosting business handled the coronavirus crisis, let’s take a few moments to delve into just how vital the industry is for the entire online world.
The World Wide Web is an unprecedented phenomenon that completely transformed the way we live. The number of people that rely on the internet for their livelihood is growing, and so is the amount of time we spend looking at our screens.
Here are a few figures that should put things into perspective:
- The number of active internet users sits at over 4.9 billion. In other words, about 60% of the global population is online.
- Pretty much everyone in the US, aged 18 to 29, actively uses the internet.
- There are more than 1.8 billion websites and over 50 billion indexed web pages.
In very simple terms, web hosting is at the bottom of making all these web pages available to billions of users. Quite a few people don’t spare as much as a thought about hosting providers, but when you look at the broader picture, you’ll see that they are a pretty integral part of the entire World Wide Web.
Web Hosting Growth Statistics
It shouldn’t be a surprise that the hosting business was drawing a steady upward curve before the pandemic hit the planet.
According to Statista, the shared hosting market size grew from just over $7.7 billion in 2010 to over $20 billion in 2019. Grand View Research says the entire industry was worth about $56.7 billion a year and a half ago, and at the time, everyone expected to see the growth continue.
Then, however, the coronavirus pandemic took over the world, and all predictions went out the window.
Web Hosting Covid-19 Impact
Many industries suffered badly during the pandemic. But it seemed like web hosting wasn’t one of them.
Companies closed their offices and put more focus on their online presence. Users went into lockdown and had a lot more time to surf the internet, meaning traffic levels for existing websites picked up, and a previously unseen demand for new online services emerged.
People were left with more time on their hands, and they could finally get around to starting the online projects they’d been thinking about for so long.
This was like the perfect storm for both big and small hosting providers, and we have some facts and figures to prove it.
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The CAGR for the web hosting industry now sits at around 18%
Given how diverse and dynamic the hosting industry is, it’s practically impossible to quantify exactly how big the Covid-19 impact was, but financial statements filed by publicly traded hosting providers show a definitive uptick in revenues.
As a result, many financial analysts have adjusted the industry’s Compound Annual Growth Rate (CAGR) from 15% to 18% for the next few years.
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The global hosting market is expected to reach over $204 billion by 2024
Experts from ResearchAndMarkets.com expect particularly explosive growth over the coming years. They predict the effect of the coronavirus crisis will be felt in the foreseeable future, and their estimate for the hosting industry’s market value for 2024 sits at over $200 billion.
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More and more small and medium-sized businesses need hosting services
As a result of the Covid-19 pandemic, businesses are turning their attention to their online presence. Quoting recent studies, Allied Market Research says that about 97% of global customers use Google to get more information on SMBs and the services they offer.
This section of the economy itself is going through a growth period, which is bound to fuel the increase in demand even further.
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Demand for managed hosting services is on the rise
The pandemic means that quite a few first-timers are trying their hands at administering a website. The prospect of managing an entire hosting account is a bit intimidating for them, and they need all the help they can get.
Managed VPS plans give them the chance to launch and run their projects while leaving the complex sysadmin tasks to the host’s experts. This fuels the growing demand for managed accounts, which is likely to continue for the next few years.
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Ecommerce is fueling a significant part of the hosting industry’s growth
The online shopping business was also positively affected by the Covid-19 pandemic.
In fact, according to the United Nations Conference on Trade and Development, at the end of 2020, ecommerce accounted for around 17% of the entire global retail trade – a 3% increase compared to 2019. It may not sound like much of a jump, but when you consider how massive the scale is, you’ll see how this is quite a shift.
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There were over 366 million domain name registrations at the end of 2020
Verisign’s quarterly Domain Name Industry Brief revealed that in Q4 of 2020, the number of domain name registrations across all top-level domains had grown by 4 million on a year-over-year basis. This is just another proof that many people have used the time in lockdown to start new online projects.
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The switch to a work-from-home model has boosted demand for cloud services
Social distancing rules introduced by the pandemic forced thousands of employees to start working from home. For many companies, this meant moving their entire IT infrastructure to the cloud.
Meanwhile, other enterprises had to find solutions to ensure an efficient and secure digital environment for the remote workers.
The result of all this was a rising demand for cloud services.
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Online gaming is skyrocketing
A lot of young (and not so young) people are stuck at home with little to do. It shouldn’t come as a surprise that many have turned to online gaming. Hosting providers are now adjusting their service portfolios to meet the newly developed demand for gaming servers.
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Hosting providers offer discounts to help businesses through the pandemic
Hosting companies in regions hit hard by the coronavirus pandemic introduced special discounts and even provided services for free to users and enterprises affected severely by the crisis. It may seem like a relatively small contribution to the community, but in times like these, every little bit helps.
Covid-19 Hosting Aftermath
We’re not out of the pandemic woods just yet. The situation changes far too quickly, and it’s still too early to say when the crisis will be officially over. Nevertheless, based on what we’ve seen so far, we can make a few predictions as to what will happen when the virus does the decent thing and goes away.
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The growth forecasts will draw new entrants to the market
Analysts say the industry is set for explosive growth, and there will be no shortage of companies who will want to capitalize on it. The competition will be stiffer, and users will be presented with a greater choice in return.
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Shared hosting is likely to continue to be popular, though the demand for more powerful solutions will also be significant
The Covid-19 pandemic showed us there’s no shortage of site owners who are completely new to web hosting and are just getting started with their first projects. Shared hosting is a brilliant starting point for them.
That said, surveys suggest that about 90% of hosting providers’ revenues come from enterprise clients. What’s more, some companies have yet to move their IT systems to the cloud. Shared plans are nowhere near powerful enough to fit their needs, so the demand for VPS, cloud, and dedicated solutions is likely to remain high, as well.
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Customers will continue to prefer managed hosting solutions
Creating a website no longer requires a high level of technical skills. Meanwhile, enterprise customers are trying to optimize their expenditures amid the economic slowdown and can do away with paying premium fees for complex IT tasks.
Both groups of clients will likely prefer to get a managed hosting plan and leave the complicated sysadmin work to the host. That way, they can focus on their projects, safe in the knowledge the service they’re paying for is as reliable and secure as possible.
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The stiffer competition will hopefully lead to innovation and high-quality services
Price is no longer the only factor users and organizations consider when choosing a hosting provider. Hosts now try to attract customers with extra features and quicker, more competent technical support staff. Their push to please the customer will hopefully lead to clever innovations and all-around higher-quality hosting services.
Overall, the pandemic’s effect on the industry gives both hosts and customers some reasons to be optimistic about the future.
That being said, if there’s anything we’ve learned over the last year or so, it’s how easily the entire planet can plunge into chaos. It’s probably best to be a bit more careful going forward.
ScalaHosting’s VPS Offers
ScalaHosting has been in the hosting industry for well over a decade, and we don’t need a global pandemic to know what potential customers want.
Reliability, consistent performance, and uptime are key for most users. Online businesses that suffer frequent outages can quickly lose the trust of end users and are more likely to rank poorly in search engine results.
Reliability alone isn’t enough, though.
Building a website is no small feat, and there are quite a few things to consider. For many, asking them to run their project while setting up the perfect hosting environment is too much of a challenge.
That’s why users prefer to leave the server management work to the experts. At the same time, they want to retain complete control over their account and keep all related services in check, and they want to do it through an easy-to-use interface.
At ScalaHosting, we believe if you fit the description outlined above, our SPanel managed VPS solutions suit your needs perfectly.
You get an isolated cloud environment with guaranteed resources available for your account at all times. Crucially, if your project outgrows your account, you can add more CPU cores, RAM, and SSD storage and set the virtual server up to your exact specifications.
Although you have the virtual server to yourself, you don’t need to worry about things like installing and configuring the operating system, setting up a firewall, or controlling the services that make your website available for everyone.
With our managed VPS solutions, our team of experienced system administrators takes care of all these tasks for you. Along with our technical support specialists, they are available 24/7 to ensure everything works as it should, and you can contact them at any time in case you have questions.
However, you still need some tools to control your hosting account and all the services related to it. With Scala, they are all integrated into SPanel – an all-in-one management solution that helps you configure the entire account to your exact needs.
You’ll get all the features to install the website building application of your choice, configure email inboxes, user and FTP accounts, manage files and databases, etc.
Best of all, because we developed SPanel in-house with our VPS clients in mind, you’ll have SPanel integrated into your managed VPS package at no additional cost.
Conclusion
The Covid-19 pandemic has landed a massive blow to the global economy. The web hosting business didn’t suffer as badly as other sectors, but it showed everyone, including hosts and their customers, how badly things could turn even in a matter of days.
The pandemic took over the world so quickly that it wasn’t really possible to be prepared for the enormous economical impact. We probably still aren’t ready to deal with such a crisis.
Still, we have hopefully learned a few lessons that might just enable us to take adequate actions should we face another calamity of global proportions.
FAQ
Did Covid-19 affect the price of hosting?
In an attempt to help the communities hit the hardest by the pandemic, some hosting companies applied special discounts and even offered free accounts to help users and businesses go through the difficult period. Apart from that, the regular prices for hosting services have remained pretty much unchanged.
Was the web hosting industry affected by the Covid-19 pandemic?
Lockdown restrictions meant people started spending more time online, and the demand for hosting services actually grew. Analysts predict the surge will continue over the next few years, though the expected economic slowdown makes these forecasts a bit uncertain.
What was the most popular type of hosting during the Covid-19 pandemic?
Shared hosting’s affordability keeps it firmly in the lead when it comes to market share. However, an increasing number of site owners and organizations now require a more powerful, reliable, and easily scalable solution, which is why the popularity of managed VPS solutions has been growing over the last few years.
