Tier1 Research: Noteworthy Changes in Market Share in the Mass-Market Web Hosting Sector Present Significant Challenges and Opportunities

Business Wire, Sept 6, 2007

New Quarterly Report Provides Update on Mass-Market Web Hosting Sector and Identifies Recent Trends and Future Directions for This Marketplace

NEW YORK -- A new report by Tier1 Research finds that noteworthy changes in market share along with current trends are presenting significant challenges and opportunities in the mass-market Web hosting sector - defined as the shared, virtualized service and standardized dedicated server segments of the market. 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.

These 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 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.

"Private equity is back in the sector, and some of the larger players are consolidating in the face of intense competition," said Philbert Shih, Senior Analyst at T1R and lead author of the report. "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."

This 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.

The trends covered in this report include:

* M&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

The report covers more than 20 key public and private companies in the mass-market hosting sector, including: 1&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.

Report Orders

To learn more about this report, visit www.t1r.com or contact Dan Ephraim, Vice President, Business Development with Tier1 Research, at 212-505-3030 x 122 or at dan.ephraim@tier1research.com.

About Tier1 Research

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 - with a particular focus on hosting, Internet infrastructure and IT services. Clients include institutional investors and technology vendors, along with end users and venture capitalists. These clients leverage T1R's analytical insight for idea generation, trend identification, due diligence and grounded opinions, as well as metrics and forecasts on companies and industries covered.

Tier1 Research is headquartered in New York. For additional information on its research coverage and services, visit www.t1r.com.