LONDON--(EON: Enhanced Online News)--According to the latest procurement intelligence report from Technavio, the market for global hosting services is expected to grow at a CAGR of 13.18% over the next five years due to increased web presence of SMBs and growth of the MMO gaming market.
“The US is the primary contributor to the global hosting services market, driven by the demand for Internet of Things hosting in the region”
The research report titled ‘Global Hosting Services – Procurement Market Intelligence Report 2016-2020’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The US is the primary contributor to the global hosting services market, driven by the demand for Internet of Things hosting in the region,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “Meanwhile, the fastest growing region is expected to be APAC. It will grow at a CAGR of over 26% due to the boom in the number of start-ups in the e-commerce sector,” adds Angad.
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Cost saving opportunities in the global hosting services market
The adoption of various cost-optimization levers helps buyers of hosting services realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the global hosting services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology
Technologies such as Apache CloudStack, secure servers, 40-100 GbE fiber channels, and modular data centers can save up to 25% of the total category spend for hosting service suppliers.
The high-speed fiber channels offer better bandwidth to satisfy the steadily increasing bandwidth requirements. This also decreases network latencies, to enable a seamless flow of data.
Competition among suppliers
Suppliers compete based on discounts and negotiations on value-added services. Buyers prefer to engage with suppliers who can provide dedicated support services to maintain uptimes close to a 100%.
Data recovery capabilities is another key value addition that buyers look for from suppliers. Suppliers equipped to handle with data loss due to server malfunction or manual errors are clearly preferred.
Bundling of services
Services such as web-building, content management, web designing, and server maintenance are bundled together by suppliers to save up to 8% of the total category spend. This provides enhanced security and protection to the data stored in the system.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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