We just finished a study on the Dutch hosting sector commissioned by the Dutch Hosting Provider Association (DHPA) and the Dutch Internet Service Provider Association (ISPConnect). Important findings from the study include the following:
- Half of the surveyed hosters have more than 10 employees
- The percentage of hosters that hire additional staff is expected to increase from 60% in 2014 to 74% in 2015
- 60% of the surveyed hosters will add an average of 2 FTE next year
- Half of the surveyed hosters have revenues exceeding € 1 million
- The percentage of hosters that enjoy revenue growth is expected to increase from 73% in 2013 to 89% in 2014
- 49% of the surveyed hosters expect revenues to grow with more than 10% in 2014
- More than two third of the surveyed hosters have been active 10 years or more
- 40% have acquired other hosters within the last five years
Hot growth products and services for 2015 include managed hosting and security services. Hosted VoiP is only mentioned by 7% (see Figure below).
Not everything is rosy within the sector. 53% of respondents say the lack of qualified talent inhibits their growth perspectives. 89% of respondents would participate if a reliable certification and qualification label for the hosting sector would be available. And while 84% say fellow hosters are their main competitors, 40% fear increased competition from the big global cloud players (think Amazon, Google, Microsoft).
What should the hosting sector do to remain relevant?
- Support and launch initiatives that preempt the expected growth in staff and the current problematic acquisition of qualified talent
- Fulfill the aspiration of establishing more transparency and a reliable certification label
- Ask the government to support and stimulate the above and to establish clarity in security levels based on their own supplier requirements
- Support initiatives that entice the market to increase investments in security levels and services
What should hosters do?
- Make a clear choice for the future: get big, get vertical or get specialised
- Hosters that want to grow big should have an active merger and acquisition strategy. Recent examples of M&A include the merger of Bitbrains and ASP4all, the acquisition of WideXS by IS Group and the acquisition of Argeweb by KPN
- Hosters that want to get vertical or specialised should consider targeting the public sector or software vendors that are looking for an IaaS partner for their SaaS solution
- While most hosters are still relying on direct sales as the most important channel (87%) they should consider investing more in an effective partnering strategy and the online channel. The revenues of the most important global competitor (Amazon) depend heavily on online.
- Hosters should invest more in automation. Only 39% of the top 250 Dutch cloud providers in our most recent cloudscape offer online ordering and onboarding. Again, Amazon provides the industry standard in this respect.
The full study can be downloaded here (Dutch).
