The dot-com bubble has burst, corporate spending is in a holding pattern and enterprises are deferring e-business infrastructure technology and services purchasing. As a result, revenue growth in the U.S. Web hosting market has definitely slowed. The market which had approached $4 billion in 2000, representing a 100 percent growth over 1999, grew only 25.5 percent from 2000 to 2001, says IDC. Revenue in the Web hosting services market will begin to accelerate in 2002 eventually reaching $20.8 billion by 2006.

“Enterprises are streamlining their internal business processes and opening new channels for customer service and product/service delivery, distribution and procurement by leveraging application servers to Web enable their core business applications and using the Internet as a transactional and connectivity medium for intra- and intercompany exchanges,” says Melanie Posey, IDC program director, Web hosting. “In other words, the market is evolving away from the dot-com era model of “Internet-as-the-business” to the post-bubble notion of “business on the Internet.”

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