Virtual Private Server Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The virtual private server market is expected to register a CAGR of 17.1% over the forecast period.

Key Highlights

• Major growth drivers for the market include several advantages associated with the virtual private server (VPS), such as the availability of the cost-effective virtual private server, growing insecurity concerns among enterprises, enhanced customization, scalability, and downtime, and more control with virtual servers than shared hosting.
• A significant rise in cyber-attacks and a surge in demand for cloud-based security solutions are expected to boost the virtual private servers market over the forecast period. Moreover, integrating machine learning (ML) and artificial intelligence (AI) with VPS and adopting cloud-based services among global organizations is expected to provide growth opportunities for VPS providers.
• According to US-based Ixia, 90% of IT professionals are concerned about their data and application security in the cloud. VPSs are the best solution to increase mobility for small to mid-size businesses embracing private and public cloud services to transform their business processes. According to Acronis International GmbH, 67% of small business proprietors and 81% of medium business proprietors assume that technology solutions assist them in running their businesses better or that technology solutions help them significantly improve business outcomes.
• Also, the VPS market has a significant growth opportunity due to emerging trends such as bring your own device (BYOD). VPS hosting, the concept of BYOD, and cloud computing combined have become more useful means of conducting business. According to a survey conducted by IBM Corporation, 82% of respondents expect smartphones to play a “critical role in business productivity in the next two years, and 36% of those surveyed deemed laptops vital to overall productivity. Moreover, according to Cisco, 95% of organizations allow personal devices in some way in the workplace, and the other 5% are probably high-security oriented.
• However, limited availability and efficiency compared to shared hosting, dedicated hosting, and cloud servers, along with limited physical resource and bandwidth availability, could be major factors that could significantly restrain the overall market’s growth.
• With several nations in lockdown due to COVID-19, and people working (and learning) from home, online usage grew significantly. Akamai witnessed a 20% rise in daily distributed denial of service (DDoS) attacks between February and March, and Nokia measured a 40% rise. Hence, the market is expected to rise exponentially during the forecast period.

Virtual Private Server Market Trends

Surge in the count of Small and Medium-sized enterprises (SMEs) and rise in the trend of BYOD is expected to drive the market.

• The growing awareness of virtual private server (VPS) benefits and the business expansions by global vendors in the small and medium enterprise (SME) segment are expected to be driving factors for the growth of the VPS market. Mobility solution benefits for SMEs include faster analytic reporting, more significant social media presence, better client presentations, SMS marketing response rates that are much higher than direct mail, and access to mobile banking.
• With progressing virtualization, SMEs are adopting private and public cloud services to change their business methods. The selection of cloud services has, in turn, pushed the demand for a virtual private server market for hosting and assisting additional essential business purposes.
• Millions of consumers have bought high-end mobile devices for personal use due to technological improvements and the widespread use of smartphones. As a result, most of the world's workforce uses these devices at work and incorporates them into daily tasks. Additionally, organizations are more ready to adopt the bring your own device (BYOD) culture due to the rise in SMEs due to the expanding startup culture in developed and emerging countries. Also, it motivates the IT industry to prioritize employee productivity while maintaining security and boosting company mobility. According to a report by Cisco, 89% of IT teams allow BYOD in some capacity.
• Moreover, VPS Hosting and the concept of BYOD)offer some real advantages. But when combined, cloud computing and the establishment of BYOD become an even more useful means of conducting business in SMEs.According to Ingram Micro, 69% of IT decision-makers in the US believe BYOD is good. This figure rises to 88% in some countries. IT decision-makers consider BYOD to be a positive move for SMEs.
• As per European Commission, there were about 23.1 million SMEs in the European Union in 2022. Most of these were micro-sized businesses that only employed fewer than nine people. Whereas in the previous year, the count was around 22.6 million. This rise in the overall count of SMEs would bring ample growth opportunities for the market to grow and excel throughout the forecast period.

APAC is Expected to Hold Significant Market Share

• Asia-Pacific (APAC) is anticipated to offer vital growth possibilities for VPS vendors during the forecast period. SMEs across industry verticals are now using VPS services owing to their multiple advantages over conventional and physical servers. The APAC region is anticipated to hold a critical market share for this market, fed by the expanding rate of cybercrime, robust demand due to its service, and IT-led industry pattern and demand for high-end services and privacy.
• According to a survey commissioned by Microsoft Corporation, 26% of manufacturing firms in the APAC region are giving priority to considering cybersecurity strategies before setting off a digital transformation project, and approximately 67% of companies surveyed say that they have or are considering implementing an artificial intelligence (AI)-based approach to strengthen their cybersecurity skills.
• According to ZNet Technologies Pvt. Ltd., one cyberattack can cost major APAC ports USD 110 billion in damages. This mainly warns ports across APAC countries, including Singapore, China, South Korea, Japan, and Malaysia. The APAC region has forever been careful about investment plans in terms of funding, and therefore the companies in the area are turning toward appropriating affordable VPS services.
• The rising number of cyber-attacks on businesses across several business verticals is accountable for this market's growth. This encourages organizations to implement VPS solutions to shield their company resources from unsanctioned access. There is a huge demand for VPS due to the increasing rate of cybercrime, which propels the market growth.
• The development of many startups within the VPS market across APAC is anticipated to drive the market. China, India, and Japan have significant potential for global VPS vendors because of the availability of a substantial proportion of end-user verticals, favorable economic conditions by extending services to these regions, multifold increase in the adoption rate of virtualization environment-based applications, and absence of intense competition for market entrants.

Virtual Private Server Industry Overview

The virtual private server market is moderately competitive and has many major players. There are many mergers and partnerships in this market, helping propel the market's growth. The market is seeing an increase in the level of competition from both the start-ups as well as the leading global VSP providers. Furthermore, the principal firms in the market studied are expanding their addressable markets by growing their product portfolio, expanding their client base, and promoting new applications.

In January 2023, Monovm.com launched new virtual private server (VPS) and virtual private network (VPN) services. These new services would give customers greater control and security for their various online activities. In addition, the new VPS services with over 20 data center locations would allow customers to choose from multiple plans, including shared and dedicated options.

Moreover, in June 2022, one of the global providers of VPNs, ExpressVPN, declared that it would continue providing service to the country's users via virtual servers. The move comes in response to recent Indian government directives requiring VPN providers to log customer data for five years or longer. ExpressVPN also stated that India-based users could use its app and software.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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