Yankee Group Reveals Web Hosting Is Making a Dramatic Resurgence with SMB and Mid-Market Enterprises

Business Wire, June 6, 2005

BOSTON -- Major Developments in Online Sales and Marketing Efforts Drive SMBs to Seek Web-Hosting Strategy

Yankee Group today revealed the market strategies and forecast for the evolving SMB and mid-market enterprise web-hosting market. The web-hosting industry continues to expand rapidly--more than 60% of the SMB and mid-market enterprises with internet services have a direct web presence. This dynamic growth for web site adoption is attributed to the increasing expectation of SMB and mid-market enterprises' customers for web-hosting services that create a compelling, reliable and credible online experience.

Across market divisions, medium-sized businesses had the highest adoption rate of web-hosting services with almost 87% penetration rate, while organizations with 2 to 99 employees experienced a more than 10% increase in adoption. Very small businesses of 2 to 19 employees also increased their adoption of web-hosting services, but the growth of their adoption and management rate relied heavily on outsourcing to hosting companies.

Yankee Group finds the web-hosting market is poised for measurable growth, and as more small and mid-market companies seek hosting services for cost-effective generation of sales leads, pricing will remain as the number-one selection criterion for choosing a partner. To capitalize on this market and gain competitive leadership, Yankee Group recommends that web-hosting companies invest in branding their company as a cost-effective provider of premium services for the SMB market.

"Full adoption of web hosting among SMBs and mid-market enterprises is imminent as companies become more reliant on hosting services for strengthening business transactions and processes in sales and marketing," said Sanjeev Aggarwal, Yankee Group senior analyst. "Because the days of 'one size fits all' focus are over, the need for customized, high-value web-hosting services is the winning solution for SMBs seeking to maximize ROI and for vendors looking to obtain greater differentiation and market leadership."

NOTE TO EDITORS

For interviews contact:

--Sanjeev Aggarwal, Yankee Group, 617-880-0246, saggarwal@yankeegroup.com

--Thomas Ford, Racepoint Group, 781-487-4607, tford@racepointrgoup.com

YANKEE GROUP (www.yankeegroup.com)

At Yankee Group, we help our clients succeed by providing the knowledge, tools and support they need to make winning decisions when business opportunities intersect with technology solutions. In business more than 35 years, Yankee Group knows the importance of listening to and understanding the needs of our clients. We deliver value through authoritative, innovative and flexible research products and consulting services. Whether challenges are rooted in planning, executing or optimizing the use of technology, Yankee Group's world-renowned analysts transform market intelligence and practical, real-world experience into valuable decision support. Headquartered in Boston, Yankee Group research and sales staffs are located around the world, including North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific.