Few sectors in the IT and communications industry have ever undergone such a "rapid and cataclysmic change in such a short period" as the beleaguered web hosting market did in 2001, according to James Eibisch, research director at IDC. But in the wake of the collapse of market-leading Exodus Communications of the US and the hasty retreat of several other service providers, Eibisch still believes that demand for co-location and managed hosting services "remains solid overall" and may even see strong growth to 2005.
According to IDC, western European companies will spend $6.8 billion (€7.6bn) on hosting services in 2005, up from $1.8 billion (€2bn) in 2001.
Eibisch believes that most of the numerous facilities that were built by ambitious service providers will survive, though many will undergo a change in ownership. Hosting services providers, as well as telecommunications network operators, data network service providers, IT services providers and ebusiness companies, will all be on the acquisition trail, as underlined by Cable & Wireless' recent purchase of most of Exodus' assets.
European and privately-held companies are expected to make a higher proportion of acquisitions in 2002 and 2003.
Public or US-based companies will be busy placing all their emphasis on maintaining their core businesses and reaching profitability before they look to make further acquisitions, he believes.
