The cloud hosting industry is entering a golden age

Sometimes it’s easy to miss progress that is slow but steady. One of the more prominent examples of this is the field of technology. We get used to advancements so quickly. Just think about it; we already take for granted that we’re walking around with tiny, highly capable computers in our pockets, connected to a worldwide network of information and services that we can access from anywhere, at any time. Science fiction has turned into science fact.

The hosting industry is obviously tied directly to the success and evolution of the Internet and its user base. We are, however, entering an inflection point of what kind of cloud services are viable to provide. The limits are disappearing.

Let’s start with one area especially relevant to the hosting industry that has improved massively over the past 20 years: our internet connection speed.

A 6,900x speed boost to our homes

In 1995, a 14.4 or 28.8 kbps dial-up connection was the norm for most people, if they had an internet connection at all. Today, in 2016, it’s not unusual for homes to be equipped with 100 Mbps broadband connections. That’s 6,944 times the bandwidth of a 14.4 kbps modem, and significantly lower latency makes the difference even more pronounced.

Or to put it differently:

  • In 1995, over a 14.4 kbps modem, it would take at least 15.4 hours to download a 100 MB file. And a mere 7.7 hours over 28.8 kbps.
  • In 2016, over 100 Mbps broadband, it takes 8 seconds.

Compared to the early days of the Web, the quality of internet connectivity today is so much better that it boggles the mind. There’s a reason Netflix streaming wasn’t a thing until quite recently. Or imagine using Dropbox over a 14.4k modem! Even a regular modern web page would kill you. For example, the TechCrunch main page, which we just clocked in at 2.6 MB, would take 24 minutes to load over 14.4 kbps.

Progress isn’t in any way stopping. There is no end of the line in technology. The chart below shows how average connection speeds have changed since 2010 as measured by the CDN provider Akamai, taken from their State of the Internet reports.

Average connection speed over time

As you can see, not all countries are created equal, but the point here is that the trend is going in the right direction — up — for all of them.

Mobile internet is actually good now

Even people who rely strictly on mobile connections have seen their connection speed and coverage jump through the roof compared to just a few years ago. Mobile internet is no longer a slouch, and much more broadly available. OpenSignal, in their report on mobile networks from August 2016, state:

Of the 95 countries on our list, all but two had 3G-or-better signal availability more than half the time in our measurements. In fact, the vast majority of those countries scored an availability metric of 75% or greater, while 23 countries were able to provide a 3G or better signal more than 90% of the time.

Add to this that 4G/LTE is now widely available in a lot of countries. Soon, 5G will show up, boosting performance even more.

The market for hosting services keeps growing

The internet population has gone from a few million to almost half of the global population in 20 years.

Internet users over time

Couple this growing internet population with massive improvements in computer technology and internet capacity, and it doesn’t take a genius to figure out that this is fantastic news for cloud services, and for basically anything that relies on being hosted on the internet.

The golden age is here and it’s not going away

The rise of the World Wide Web in the ’90s gave birth to the hosting industry; an industry that has never stopped growing because the Internet, and people doing business on the Internet, isn’t exactly slowing down. It’s a good place to be. We could have gone on and shown you even more numbers and statistics of how the technology landscape keeps evolving in favor of hosting providers, but we think you get the gist of it. In summary:

  • The reachable audience for cloud-based services (and therefore cloud hosting in general), continues to grow.
  • Another important thing we didn’t even mention yet is that the purchasing power of this growing audience is also increasing.
  • More bandwidth gives more possibilities for what kind of services are possible.
  • More capable devices on the end-user side opens up room for more advanced Javascript and internet-connected apps.

When you boil it down, it really is quite simple: Cloud services need hosting. Data center providers, hosting providers, ISPs, they all stand to benefit from this. Their markets are growing in size and capabilities, and the brave and bold will reap the rewards.

Yes, we are a bit biased since we make hosting software, but facts are facts. 🙂


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