Application Hosting Market Report 2025

The application hosting market size has grown strongly in recent years. It will grow from $95.06 billion in 2024 to $102.5 billion in 2025 at a compound annual growth rate (CAGR) of 7.8%. The growth in the historic period can be attributed to increasing demand for scalability, cost efficiency, globalization of businesses, security concerns, the rise of e-commerce, and integration of DevOps practices.

The application hosting market size is expected to see rapid growth in the next few years. It will grow to $181.15 billion in 2029 at a compound annual growth rate (CAGR) of 15.3%. The growth in the forecast period can be attributed to edge computing adoption, hybrid cloud solutions, remote workforce trends, cybersecurity emphasis, and industry-specific solutions. Major trends in the forecast period include cloud-native technologies adoption, edge computing integration, hybrid and multi-cloud strategies, security and compliance focus, and serverless computing growth.

The increasing demand for physical security is expected to drive the growth of the application hosting market in the near future. Physical security involves the protection of personnel, hardware, programs, networks, and data from physical situations and events that could result in significant losses or damage to an enterprise, agency, or organization. Application security controls are strategies aimed at enhancing the security of an application at the coding level, making it less vulnerable to hackers. For example, in November 2023, The International Trade Administration (ITA), a US-based agency, reported that the UK physical security market was valued at $14 billion in 2022 and is expected to remain stable in the coming years, with growth fueled by increasing digitization. Therefore, the rising need for physical security is propelling the application hosting market.

The increasing adoption of cloud computing is anticipated to drive the growth of the application hosting market in the future. Cloud computing refers to the on-demand availability of IT resources over the internet, offering access to a wide range of computing services, including servers, storage, databases, networking, and software. It allows application hosting services to provide on-demand access to these computing resources via the internet. For example, in September 2022, a report published by Google Cloud, a US-based cloud computing service, indicated that the use of multiple public clouds rose by 26% in 2022, up from 21% in 2021. Additionally, hybrid cloud utilization also increased significantly, from 25% in 2021 to 42.5% in 2022. Therefore, the growing adoption of cloud computing is driving the expansion of the application hosting market.

Product innovations emerge as the prominent trends gaining momentum in the application hosting market. Significant players within this market are dedicated to developing innovative products to fortify their market position. For instance, in November 2022, Kinsta, a US-based Applications Hosting provider, introduced a reliable and comprehensive Platform-as-a-Service (PaaS) offering both Application Hosting and Database Hosting. This platform operates on a per-usage billing system, charging based on runtime and database size, providing customers with a streamlined billing experience.

Leading companies in the application hosting market are focused on introducing next-generation, sophisticated solutions to gain a competitive advantage. Advanced application hosting services denote computing platforms that facilitate software delivery over the internet, serving as operational platforms for a wide array of software applications. For example, in September 2023, InMotion Hosting, a US-based website hosting firm, unveiled Platform InMotion, its novel cloud WordPress hosting plans, and server management platform. Users can design, manage, and launch websites on a high-performance VPS optimized for WordPress - all through a unified dashboard. Platform InMotion optimizes WordPress websites through its unique UltraStack configuration, Redis, server-side caching profiles, and high-performance cloud servers. This results in faster, more responsive websites, coupled with the assurance that the company's adept Technical Support and System Administration teams oversee the hosting infrastructure management.

In November 2022, Summit Hosting, a United States-based company specializing in virtual servers and cloud-based application hosting, completed the acquisition of Handy Networks for an undisclosed sum. This strategic acquisition was aimed at obtaining businesses associated with Server Hosting, Application Hosting, Colocation, HIPAA compliance hosting, as well as backup and disaster recovery services. The primary objective behind this acquisition was to further broaden the range of services offered to their clientele. Handy Networks LLC, the acquired entity, is recognized as a US-based provider offering global hosting and cloud solutions.

Major companies operating in the application hosting market include International Business Machines Corporation, Amazon.com Inc., Rackspace Hosting Inc., Microsoft Corporation, Alphabet Inc., Sungard Availability Services Inc., Liquid Web LLC, DXC Technology Company, Navisite Inc., Apprenda Inc., Charter Communications Inc., Oracle Corporation, Red Hat Inc., TIBCO Software Inc., The Apache Software Foundation, Fujitsu Limited, DigitalOcean Inc., Salesforce Inc., VMware Inc., Endurance International Group Inc., HostGator.com LLC, A2 Hosting Inc., Linode LLC, Joyent Inc., Pantheon Systems Inc., Media Temple Inc., SiteGround Hosting Ltd., DreamHost LLC, NeXcess LLC, Vultr Holdings LLC, Contegix Inc., Atlantic.Net Inc., Arvixe LLC, InMotion Hosting Inc., UKFast.net Limited, iWeb Technologies Inc.

North America was the largest region in the application hosting market in 2024. Asia-Pacific is expected to be the fastest-growing region in the global application hosting market report during the forecast period. The regions covered in the application hosting market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the application hosting market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Application hosting, a Software-as-a-Service (SaaS) solution, enables users to operate and oversee software applications through cloud-based platforms. This solution provides users with computing systems that facilitate the distribution of software over the Internet. Accessible from anywhere globally via the Internet, it operates on distant cloud architecture.

The primary types of application hosting include managed hosting, cloud hosting, and colocation hosting. Managed hosting involves a third-party provider taking responsibility for the administration, troubleshooting, and maintenance of an organization's hardware or cloud computing resources. The suite of services includes application monitoring, application programming interface (API) management, infrastructure services, database administration, backup and recovery, and application security. These services cater to organizations of various sizes, ranging from small and medium-sized enterprises (SMEs) to large enterprises.

The application hosting market research report is one of a series of new reports that provides application hosting market statistics, including application hosting industry global market size, regional shares, competitors with an application hosting market share, detailed application hosting market segments, market trends and opportunities, and any further data you may need to thrive in the application hosting industry. This application hosting market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The application hosting market includes revenues earned by entities by providing hosting platforms, managing hosting, and cloud hosting. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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