Summary

The Virtual Private Server Market is expected to grow at a CAGR of 17.1% over the forecast period 2021 - 2026. Major growth drivers for the market include several advantages of VPS, such as 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.

Key Highlights
A significant rise in the number of cyber-attacks and a surge in demand for cloud-based security solutions is expected to boost the virtual private servers market over the forecast period, as according to US-based Ixia, 90% of IT professionals are concerned about their data and application security in the cloud.
Virtual private servers are the best solution to increase mobility for small to mid-size businesses which are embracing both private and public cloud services to transform their business processes, as 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.
There is a growth of the VPS market due to the emergence of trends, such as BYOD. VPS Hosting, the concept of BYOD, and cloud computing combined becomes more useful means of conducting business, as 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. Apperian, Inc. says 53% of enterprises indicate mobility improves business processes and productivity. According to Syntonic Inc., 87% of companies are dependent to some extent on their employee’s ability to access mobile business apps from their smartphones.
The Linux segment is expected to be the major revenue contributor throughout the forecast period, owing to an increase in demand for secure operating systems by a majority of enterprises. Besides, VPS hosting on Linux costs less maintenance and service than Windows VPS hosting, which is also the primary reason most organizations are opting for Linux-based VPS solutions.
The virtual private server market's significant challenges are the availability of shared hosting, dedicated hosting, and cloud servers, along with limited physical resource and bandwidth availability, apart from that Integration of Machine Learning, Artificial Intelligence with VPS along with the adoption of cloud-based services among global organizations to provide growth opportunities for VPS providers.
With several nations in lockdown due to COVID-19 and so many people working (and learning) from home, online usage has grown significantly, but so far, the internet is catching up well. Akamai has witnessed a 20% rise in daily DDoS attacks between February and March, and Nokia measured a 40% rise.
Verizon saw a 20% boost in web traffic in a week as U.S. users began staying home in March and it’s still 27% greater than usual; VPN and VPS usage are higher 49% with employees working from home, video is up by 36% and online gaming by 115%.


Key Market Trends

Small and Medium-sized enterprises (SMEs) to Show Enhanced Association towards VPS Offerings


The VPS market has been segmented by company size into SMEs and large enterprises. The market share of the large enterprise segment is expected to be higher; however, the SMEs' market size is expected to grow at a higher CAGR in the coming years.
Mobility solution benefits for SMEs include faster analytic reporting, more significant social media presence, better client presentations, SMS marketing response rates are much higher than direct mail, and access to mobile banking.
Alone, VPS Hosting, and the concept of BYOD offer some real advantages. But when combined, cloud computing and the establishment of BYOD becomes 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 is a positive move for SMEs.
The growing awareness of VPS's benefits and the business expansions by global vendors in the SME segment is expected to be driving factors for the growth of the VPS market.
With progressing virtualization, Small and Medium Enterprises (SMEs) are adopting both 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 for assisting additional essential business purposes.


APAC is Expected to Hold Significant Market Share


APAC is anticipated to offer vital growth possibilities for VPS vendors during the forecast period, as SMEs across industry verticals are now using VPS services owing to its 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, presence of robust demand due to its service, and I.T. 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 consider cybersecurity strategies before set off a digital transformation project, and approximately 67% of companies surveyed say that they have or are considering implementing an AI-based approach to strengthen their cybersecurity skills.
According to ZNet Technologies Pvt. Ltd., one single cyberattack can cost major APAC ports upwards of 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 the appropriation of affordable VPS.
The rising number of cyber-attacks on businesses across several business verticals are 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 virtual private server market across APAC is anticipated to drive the market. China, India, and Japan have the notable potential for the global VPS vendors, because of the availability of 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.


Competitive Landscape

The Virtual Private Server Market is moderately competitive and has many large players present. There are many mergers and partnerships in this market, thereby helping to propel the growth of the market. The market is witnessing 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 product portfolio, expanding their client base, and promoting new applications area.


April 2020 - GoDaddy Inc. announced it is acquiring Neustar Inc's Registry business. Financial details of the transaction were not disclosed. The new service will be called GoDaddy Registry. The Neustar Registry business includes an extensive portfolio of top-level domains, including .biz, .co, .in, .nyc, and .us, and supports more than 215 TLDs and approximately 12 million domains. This includes its Managed Registry Services business that provides end-to-end registry management for over 130 brand TLDs and 70 generic TLDs.
Feb 2020 - Liquid Web, LLC, announced the launch of Acronis Cyber Backups for Dedicated Hosting, giving customers added customization and capabilities. By partnering with Acronis, Liquid Web will be able to provide its customers with reliable and easy-to-use backup solutions designed to improve recovery time, while creating more efficient uptime.


Additional Benefits:

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

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