Wednesday, January 28, 2009

Overview of Indian Web Hosting Companies

The Indian Internet space has seen a virtual explosion. If we are to look at the Indian Internet market in terms of number of users, the figure has exploded from 5,000,000 in 2000 to 42,000,000 in June 2007, reflecting a growth rate of a staggering 740% even though the overall Internet penetration rate in the country is still a meager 3.7%. The opening up of the Indian telecommunications market has been one of the factors behind this resounding growth, along with the resonating success of the Indian outsourcing sector which has been almost entirely dependent upon the Internet for its functioning.

A direct resultant of the growth of the Internet in India has been augmentation witnessed in the number and kinds of web hosting companies. As the number of Internet users grew in India, more and more businesses realized the importance of having a web presence. Demand for ‘.in’ domains was at an all-time high with registrations touching the 150,000 mark within a year of its launch. All of these newer domains along with the websites made for them required a place to park themselves. That is where the web hosting companies smelt a significant opportunity for themselves and subsequently grew by leaps and bounds.

From among the major Indian web hosting companies, established player Net4India has the largest share – 12.5% as per data released by WebHosting.Info at The reason for this is primarily the first mover advantage phenomenon, i.e. it was one of the first players on this scene in the country. Quickly, the company managed to garner a reputable name for itself, thus bagging a significant number of blue chip clients in the process. Even today, a large number of Indian corporate, including some major global conglomerates such as the Tatas are clients of Net4India.

Other major players on the Indian web hosting scenario include Rediff, Indialinks, Manashosting and Nettigritty who come in at No. 2, No. 3, No. 4, and No. 5 on the Top 10 list of Indian web hosting companies, with a market share of 5.0%, 4.8%, 2.4% and 1.3% respectively. As would be apparent, al the Top 5 players together do not command a major share of the Indian web hosting market. This is essentially because the market is highly fragmented with a very large number of players. Also, many Indian businesses as well as individuals host their websites with foreign hosting companies, bypassing the Indian entities.

With the emergence of more and more reliable web hosting companies within the country, this trend is likely to be reversed though. Infrastructure within the country is also improving drastically, encouraging newer players to come onto the forefront. Infrastructure is key to this sector as web hosting companies require practically uninterrupted power supply to maintain their uplink/downlink connectivity.

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