Virtual Private Server Market Size By Type (Managed, Unmanaged), By Operating System (Windows VPS, Linux VPS [Ubuntu, CentOS, Red Hat Enterprise Linux (RHEL), Debian]), By Organization Type (Large Enterprises, SMEs), By Application (IT & Telecom, BFSI, Healthcare, Government & Public Sector, Retail, Manufacturing), Industry Analysis Report, Regional Outlook (U.S., Canada, UK, Germany, France, Spain, Italy, Netherlands, Russia, China, India, Japan, Australia, South Korea, Southeast Asia, Brazil, Mexico, Argentina, Colombia, South Africa, Saudi Arabia, UAE, Qatar), Growth Potential, Competitive Market Share & Forecast, 2019 - 2025Virtual Private Server (VPS) Market is projected to surpass USD 2 billion by 2025. The market growth is attributed to factors such as enhanced control over web servers, reduced infrastructure maintenance costs, and improved operational efficiency. VPS hosting is becoming popular among enterprises who want to upgrade from shared hosting to have more control over their websites. The virtual server acts as a dedicated server for enterprises and provides them with full access to network resources as per their demands. Another factor spurring the adoption of virtual server hosting is the rising adoption of virtualization technology to reduce the cost incurred in the procurement and maintenance of physical servers.
The managed VPS segment is expected to exhibit a growth rate of over 15% from 2019 to 2025 as it offers a high degree of resource scalability. Customers can dynamically scale their usage of key server resources, such as bandwidth and memory, as per their requirements. By opting for managed server hosting, customers can invest more in in-house resources to focus on core competencies and generate profits. This type of hosting is gaining popularity among large as well as small enterprises as it proves extremely beneficial for those customers who have little or no knowledge of set up and configuration of virtual server and its applications.
The Windows VPS hosting segment is expected to hold a market share of over 35% by 2025 as it offers compelling advantages to enterprises, who run complicated applications and heavy traffic websites. For enterprises that operate in Windows-only environments, Windows-based hosting is a suitable and highly compatible option while choosing web hosting service providers. Also, a Windows server package includes technical support as well as regular system updates and security fixes, such as intrusion monitoring and firewalls, making it popular among corporate environments.
The large enterprises segment in the VPS market held a dominant share of over 60% in 2018 and is expected to maintain its dominant position over the forecast timeline. As the enterprises are expanding their businesses through online platforms, they are facing issues related to the proper provisioning of server resources. They are, thus, opting for VPS hosting, which delivers on-demand resource provisioning and provides them with additional capabilities, such as high security and scheduled backups. It enables large organizations to have better control over their virtual servers and enables them to customize their plans to suit their requirements.
The retail VPS market is expected to witness the fastest growth rate of over 20% over the forecast timespan due to the rising demand for web server hosting, enabling retailers to have better control over their web servers. Retailers are widely moving toward cloud-enabled VPS hosting, which enables them to scale their server resources and expand their business into multiple locations in a hassle-free manner. The proliferation of e-commerce platforms has also increased the demand for cloud server hosting services among enterprises, which provide them unlimited bandwidth to handle high traffic websites.
The North America VPS market is expected to hold a market share of over 40% in 2025. The growing demand for high-performance infrastructure has fueled the need for virtualized computing environments. The organizations are moving toward virtual web servers to manage their online platforms in a cost-effective way. Moreover, higher concentration of virtualization solution vendors is aiding the growth of the VPS market in this region. Many organizations have moved to cloud services to manage the vast amount of web data, which also opens huge growth opportunities for the market.
The companies present in the market are partnering with cloud service providers to enhance their virtualization capabilities and sustain in the market competition. Some companies are focusing on expanding their customer base by introducing innovative server hosting plans for their customers in the key regional markets. For instance, GoDaddy introduced a virtual private server for web professionals in India. The new VPS hosting enables small businesses and web professionals to streamline their setup process and increase the performance of their customer’s websites. In March 2017, the Canadian Web Hosting company introduced upgraded VPS plans with lower pricing. The company’s new VPS SAFE plans use Artificial Intelligence (AI) engine to understand customers data patterns and enable data protection to ensure guaranteed recovery of files and applications.
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