A new dawn for European hosting providers

By: Jelle Frank van der Zwet

Times continue to change for European hosting providers. With more enterprises drawn to cloud-based infrastructure (IaaS) by the promise of cost reductions and increased scalability, traditional hosting and integration revenues are coming under pressure.

As a pan-European data centre provider, we have seen the industry change in many ways, but few developments have had an impact like cloud since the dot-com bust. Last year, we asked over 400 decision-makers at cloud and hosting providers across Europe how they felt cloud would impact their business. We ran the survey again this year to see if perceptions had changed and what the future of cloud adoption looks like from a provider perspective.

One of the key trends is a major shift in demand from traditional hosting (including managed, dedicated and web hosting) to cloud-based services (IaaS and SaaS). Last year, despite the widely acknowledged growth of cloud services, enterprise demand for traditional hosting still exceeded that for cloud services. Respondents did however anticipate a rise in the demand for cloud services over the next few years.

This year, we are seeing this predicted rise actually happening, with almost half (43 percent) of respondents indicating they now see stronger customer demand for IaaS. And with only 23 percent of respondents still seeing the strongest demand for traditional hosting services in comparison to the 56 percent last year, the future of the traditional hosting looks set to be overshadowed by the ever-more prominent cloud.

These figures paint a picture of an industry that is very much in flux. Adoption is picking up and enterprises are engaging with local and international service providers to migrate to the cloud. This is putting service providers in a prime position to capitalise on the cloud opportunity to boost their revenue streams.