The market for managed web hosting services in Europe will be worth around $1bn (£628m) by 2005, according to market research group, Frost & Sullivan.
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Sales in the European managed web hosting market could top $4bn by 2008, according to a study published by the group.
Even though corporate spending on managed web hosting services has suffered under the current economic downturn, Frost & Sullivan sees the hosting market growing.
The growing shift of business processes to the internet and the rising adoption of IP VPNs (Internet Protocol virtual private networks), coupled with falling bandwidth prices, will be the primary growth drivers for managed web hosting services in the years ahead.
New technologies such as blade servers and automated infrastructure platforms will help minimise space and power as well as IT personnel costs per customers, therefore lowering overall operating costs.
The biggest inhibitor to the take-up of managed web hosting services remains the view of many enterprises that they must retain responsibility for core online operations in-house.