External web hosting grows in popularity with UK businesses

The Internet data centre market in the UK is set to nearly double in size by 2004 to approximately $400 million as more companies outsource their web management functions.

France and Germany will also see a sizeable increase, contributing to an overall European Internet data centre market worth nearly $1.8 billion by 2004, according to a new report from Total Romtec.

The Total Romtec European Internet Data Centre Report, which was sponsored by Computacenter and other major ICT vendors , pinpoints several reasons for the significant growth in external web hosting including a shortage of IT skills and the need for a cost-effective Internet infrastructure, round-the-clock support and bandwidth-intensive applications.

Internet data centres, which provide web hosting, server co-location and high-bandwidth Internet access in a secure environment, are proving most popular for hosting corporate information, often seen as the least mission critical element of a web site. Sixty per cent of European businesses have outsourced their corporate information web function to an external hosting company while forty-nine per cent of those that have a transactional website have outsourced this function.

The report, which surveyed nearly 500 IT directors across Europe, also revealed that UK and German companies are leading the way in developing a web presence. Ninety per cent of UK businesses now have a corporate information site - in France, only 55% have the same provision. UK companies, however, have been slower to deploy transactional facilities on the web. With only 18% of firms able to perform ecommerce transactions, the UK is lagging behind Germany and Italy where nearly 30% of companies can now do business over the web.

The survey respondents cite various benefits to using an Internet data centre. Seventy per cent believe external hosting enables them to take advantage of new technologies, improve scalability (66%) and service levels (67%). The lack of IT skills also features heavily as a deciding factor, with 60% of companies highlighting this as a reason for outsourcing their Internet functions, 46% also believe an Internet data centre lowers costs.

Tim Peacock, Enterprise specialist from Computacenter, is not surprised that Internet data centres are becoming more popular. "The increase in the number of people online and the growing complexity of Internet services is putting a huge amount of pressure on the IT department and IT infrastructures. Companies are now much more confident about outsourcing their web function and are discovering that this approach not only frees up in-house resources but also improves their Internet capabilities."

Although the popularity of Internet data centres will rise dramatically, businesses do believe there are some disadvantages to the model. Sixty-four per cent of companies cite loss of control as a concern and 53% have fears about data being held off-site.

Computacenter's Tim Peacock believes these concerns are only natural and will diminish as Internet data centres become more widely accepted. "Many companies are only just coming to terms with their web needs and infrastructure and the idea of handing some of this responsibility over to an external partner is bound to raise concerns. However our customers are showing a real shift in mindset and they are now much more confident to pursue hosting options with us."