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Singapore Web Hosting Industry Outlook for Year 2008
An Analysis into the Singapore Web Hosting Industry for 2008
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January 4, 2008 (FPRC) -- The Singapore Web Hosting industry is basically bouyant and is growing at a reasonable pace. For 2008, our predictions for Singapore Web Hosting industry is that there are will be continued growth but uncertainty in the web hosting industry.
Growth will continue as Singapore economy is growing strongly, despite dark clouds on the horizon due to the sub prime crisis, the high oil prices which may cause the USA economy to splutter, unless there is a recession in USA, we expect Singapore economy to continue growing. Hence this will be beneficial to the web hosting industry in general.
We see more and more Asia Pacific countries as well as European countries setting up racks and servers in Singapore to serve their Asia Pacific offices as Singapore is one of the main Internet hub in Asia besides Hong Kong, this will further add on to the growth of the web hosting industry in Singapore.
However, growth maybe offset by the increasing number of web hosting companies who had priced themselves far too low to survive. They may lower the fees even further or oversell even more to have the necessary cash flow to pay their debts. This in turn will have negative impact on the industry depressing the web hosting prices and causing problems for proper and honest web hosting companies. However, as Singapore Internet community matures, it is expected that they will see through the overselling screen and be cautious when selecting web hosting companies. This year I see quite a few overselling web hosting companies folded and disappear but more appear, though I doubt that they will last for long.
Challenges ahead is the continued high oil prices which converts into higher electricity prices for the datacentres. Such high electrical costs is already being passed on to web hosting companies. Server racks take up a lot of electricity and hence the profits of web hosting companies will be eroded. The oversellers will face far serious issues as their profits if any are already razor thin. This will affect normal hosting companies as well and it will be a continued challenge to cut costs without cutting services.
Bandwidth costs in Singapore is expected to be high through 2008, I do not foresee any respite from that. The costs of repairing for the Taiwan earthquake is largely passed on to ISPs which in turn pass on to web hosting companies. Demand for bandwidth is expected to be high and with demand high and supply not being able to be increased that easily (you cannot build a submarine cable in 24 hours) prices are expected to remain high if not higher.
Labour costs in Singapore is expected to be higher as wages increase due to better economy. Wages is the second highest component for a web hosting company besides datacentre costs and will affect the profit margins.
Therefore despite the continued growth in the web hosting industry in Singapore, it is predicted that 2008 will be a challenging year for the industry. Only the fittest, leanest and meanest will survive.
Send an email to Lim Boon Chuan of 8 to Infinity Pte Ltd
+656-742-9698
Keywords:
singapore web hosting, web hosting
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