Procurement Market Intelligence Report
IT Hosting Services
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IT Hosting Services Global Overview
Definition
Summary
IT hosting services are also referred to as cloud-computing services. These services can remotely provide the comprehensive functions of a traditional IT department, including hardware, software, maintenance, security, and other resources. These functions are delivered through the cloud and hosted on the vendor’s servers rather than on the buyer's hardware. Buyers maintain control over the operating systems, storage, and deployed applications but entrust all other hardware and software services to the supplier. Major buyers in this market include retailers, financial institutions, and manufacturers.
This Report Includes:
- Cloud-Computing Services
- IT Hosting Services
- Infrastructure as a Service
Not in this Report:
- Data Processing Services
- Web Hosting Services
Global IT Hosting Services Procurement Trends
Discover the top international trends affecting procurement in the global IT Hosting Services market.
Neutral
GSA memo asks agencies to review consulting contracts
- The General Services Administration (GSA) recently issued a memorandum asking government agencies to review their consulting contracts with the ten highest-paid firms. The ten firms are Accenture PLC (Accenture Federal Services), Booz Allen Hamilton Inc., CGI Group Inc. (CGI Federal), Deloitte Touche Tohmatsu (Deloitte Consulting), General Dynamics Corporation (General Dynamics IT), Guidehouse Inc., Huntington Ingalls Industries Inc. (HII Mission Technologies), International Business Machines Corporation (IBM), Leidos Holdings, Inc., and Science Applications International Corporation, Inc. (SAIC).
- The memo states that agencies are strongly encouraged to cut non-essential consulting contracts, providing a list of those intended to be terminated by March 7, 2025. By April 19, 2025, agencies must submit their reviews of non-GSA consulting service contracts.
- According to the GSA, the ten consulting firms identified are set to receive $65.0 billion in fees in 2025. The Department of Defense (DoD) has stated its intention to terminate or descope contracts non-essential to the DoD’s purposes; some of the largest market players with high-value DoD contracts include Booz Allen Hamilton, Deloitte, and Accenture.
- According to the Government Accountability Office, in the fiscal year 2023, government agencies spent $478.0 billion on services, with the DoD accounting for $230.0 billion and non-defense agencies accounting for the rest. The DoD spent $21.3 billion on support, professional, and engineering and technical services, while non-defense agencies spent $21.4 billion on professional services, which includes consulting, training, and support services.
- The Department of Veterans Affairs (VA) initially cancelled 875 contracts (amounting to around $2.0 billion) but has currently paused efforts. However, contract terminations across most agencies are expected to continue.
The EU finalizes the Cyber Resilience Act
- On September 15, 2022, the EU proposed the Cyber Resilience Act (CRA), which aims to increase the focus on cybersecurity throughout the development lifecycle of digital products, protecting consumers and businesses from increasingly dangerous cyber threats.
- Other objectives include creating a coherent cybersecurity framework for producers to comply with, creating an obligation to secure products for the entire lifecycle of the products, as well as increasing the visibility of security properties in digital products.
- The goal of the Act is to ultimately create hardware and software products that are more secure against cyberattacks. Fines can reach up to a maximum of €15 million or 2.5% of global turnover, whichever is the higher of the two.
- On November 30, 2023, The European Commission, Council, and Parliament came to an agreement on the text of the Cyber Resilience Act and formally adopted the act on March 12, 2024.
- The CRA will be rolled out through a phased transition plan during the second half of 2024. The majority of the provisions will be enforceable in 2027, three years after publication.
Positive Trends
The DOJ proposes Google breakup in latest tech antitrust action
- In August, Google was found guilty of operating as a monopoly and engaging in anti-competitive practices through the operation of its search engine business.
- In response to this ruling the Department of Justice (DOJ) has stated it will seek a breakup of Google’s business segments, among other similarly harsh penalties. While the actual penalty Google receives must be approved by the judge, the DOJ’s proposed penalties signal a zero-tolerance policy toward tech monopolies.
- During the last few years, the Federal government has significantly increased its enforcement actions against major technology companies in an effort to contest the high level of market share concentration in this sector.
- These actions include high-profile anti-trust lawsuits against Amazon, Apple, and Meta, in addition to the case against Google. Consequently, the results of these lawsuits could significantly affect the structure of a wide range of tech markets.
Global IT Hosting Services Market - Suppliers by Region
| Country/Region | Number of Suppliers |
|---|---|
| #1 Oceania & Southeast Asia | 30,895 |
| #2 India | 10,715 |
| #3 Europe | 9,600 |
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Geography Drilldown - US & Europe
Average Cost of IT Hosting Services
United States
2026 Market Pricing$15.00 to $XX,XXX.XX
per monthEurope
Average Price
Prices in the IT Hosting Services market range from $15.00 to $XX,XXX.XX, depending on Purpose, RAM and Memory Usage. For example, lower prices are associated with General purpose low-traffic websites ($15 to $650 per month), whereas higher prices are associated with Large database workloads ($250 to $20,000 per month).
Need the scoop on international price trends?
Between our Europe and Canada collections, we provide price data for 350 markets so you can instantly compare prices across borders. Or, use our custom research services for intel on prices in any region across the globe.
IT Hosting Services Category Price Trends
Pricing trends are indicated by the compound annual growth rate (CAGR) during a set period of time. For the IT Hosting Services market, prices in the US have grown 2.2% from 2022 to 2025. Meanwhile, the recent three-year CAGR for Europe is +3.1%.
United States (2022-2025)
Europe (2022-2025)
Compound Annual Growth Rate
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Price trend forecasts are available to subscribers, along with price driver projections and forward-looking cost structure data.
Cost Analysis - Total Cost of Ownership for IT Hosting Services
Total cost of ownership is Medium in the IT Hosting Services market. The average cost of ownership differs depending on the contract but generally includes costs negotiated before the contract begins, costs billed during the contract period and unforeseen costs. For example, unforeseen costs in the form of Downtime may raise the total cost of ownership unexpectedly.
Negotiated Before
Pre-evaluation
Set Up Fees
Billed During
License fees
Compliance
Unforeseen
Downtime
Buyer Power in Procurement Negotiations
In 2026, buyer power amounts to -1.3 in the United States. Buyer power is most positively impacted by Market Share Concentration. It is most negatively impacted by Recent Developments. Subscribers can access details on eight other factors that impact buyer power. Learn more
United States
Europe
Buyer power forecasts: your glimpse into the future
Develop strategies for the upcoming year and identify unforeseen opportunities for buying now
- Actionable "Buy Now" and "Buy Later" insights
- Near-real-time updates to current and forecast Buyer Power Scores
- Methodology and weightings for Buyer Power Score Components
Supply Chain Risk
The average level of supply chain risk is assessed as Medium, which has a negative impact on buyer power. The level of supply chain risk is affected by industry volatility, barriers to entry, competition, import penetration, regulation and industry financial risk. Buyers in this market can mitigate procurement and supply chain management risks by monitoring risk levels for individual first and second tier suppliers:
1st
Tier Suppliers
- Computer Manufacturers
- Software Publishers
- Internet Service Providers
- Data Centers
2nd
Tier Suppliers
- Semiconductor & Circuit Manufacturers
- Intellectual Property Licensing Firms
- Telecom Networking Equipment Manufacturers
Biggest IT Hosting Services Suppliers in the US by Revenue
The largest IT Hosting Services vendors by revenue in the US are Dxc Technology Co, Lumen Technologies, Inc. and Nutanix Inc. Subscribers can sort and filter by market share concentration, profit level and other factors. Learn more
| Supplier | Operational Size | Headquarters | Number of Employees | Market Share (%) | Market Share Performance (3yr trend) | Total Revenue ($ million) | Profit Level (%) | Risk Level |
|---|---|---|---|---|---|---|---|---|
| Microsoft Corporation | Global | REDMOND, US | >10,000 | 15-20 | ||||
| Amazon.Com, Inc. | Global | Seattle | >10,000 | 25+ | ||||
| Alphabet Inc. | Global | MOUNTAIN VIEW | >10,000 | 5-10 | ||||
| International Business Machines Corporation | Global | ARMONK | >10,000 | 5-10 | ||||
| Hewlett Packard Enterprise Co | Global | SPRING | >10,000 | 5-10 | ||||
| Rackspace Technology Inc. | Global | SAN ANTONIO, US | 1,001-10,000 | 5-10 | ||||
| Dell Technologies Inc. | Global | ROUND ROCK | >10,000 | < 5 | ||||
| Oracle Corporation | Global | AUSTIN, CA | >10,000 | < 5 | ||||
| Lumen Technologies, Inc. | Global | MONROE | >10,000 | < 5 | ||||
Looking for a list of suppliers by country?
Subscribers can access vendor information on Canadian and European suppliers, too. We also offer custom research services to help with vendor sourcing anywhere in the world.
Profit Analysis
The average profit margin across vendors in the IT Hosting Services market is 8.5% and steady. Profit levels shift depending on suppliers' spend on wages, purchases and overhead. The highest cost component for vendors is Overhead. The cost trend for this component is stagnating, when considering movement between 2025 and 2026. To understand cost forecasts for 2027 and uncover the implications on profit, start your subscription. Learn more
Vendor & Supply Chain Analysis
The average vendor risk for IT hosting services is moderate due to moderate competition from substitutes and a moderate level of supply chain risk.
Supply chain risk is moderate due to the industry risk and volatility associated with the manufacturing of computer and telecom networking equipment.
Market concentration in the IT hosting service market is high due to the dominance of players including Amazon, Google, and Microsoft. ProcurementIQ estimates that there are over 2,140 IT hosting service providers in the United States, and collectively the top four firms account for more than 50.0% of total market revenue.
The United States is a net importer of network equipment, which indicates a high level of competition in the market from foreign vendors. However, the increased reliance on overseas vendors heightens the risk of supply chain disruptions.
Supplier Information
Microsoft Corporation
Microsoft Corporation is a technology company offering digital technology and artificial intelligence (AI) to businesses and individuals worldwide. It develops cloud-based solutions that deliver customers with software, services, platforms, and content and provides solution support and consulting services.... Subscribe to learn more
Amazon.Com, Inc.
Amazon.com, Inc. is a global e-commerce company that offers a range of consumer products and services through online and physical stores. It resells merchandise and content and offers products from third-party sellers. It also manufactures and sells electronic devices and develops and distributes media content.... Subscribe to learn more
Alphabet Inc.
Alphabet Inc. is an Internet technology company offering various products, services, and solutions spanning computing, search, cloud, and online advertising technologies. It organizes its business into three segments: the Google Services Segment, which includes ads, Android, Chrome, hardware (including Fitbit,... Subscribe to learn more
Hewlett Packard Enterprise Co
Hewlett Packard Enterprise Co. is a global technology company developing intelligent solutions for business and public sector enterprises. It organizes its business into six reportable business segments: the Compute segment, which consists of general purpose servers for multi-workload computing and workload-optimized... Subscribe to learn more
International Business Machines Corporation
International Business Machines Corporation (IBM) is a global integrated computer technology, hardware, software, and services provider. It organizes its business into four segments: Software segment, which provides software solutions for a hybrid cloud platform, data and artificial intelligence, automation,... Subscribe to learn more
Rackspace Technology Inc.
Rackspace Technology Inc. is a public company operating globally in the information and professional, scientific and technical services sectors. The company's offerings include load balancing software, data center services, disaster recovery services, it hosting services and web hosting services. Founded Subscribe to learn more
Dell Technologies Inc.
Dell Technologies Inc. is a global provider of comprehensive information technology solutions, products, and services. It organizes its business into two segments: the Infrastructure Solutions Group, which offers multi-cloud and big data solutions to simplify, streamline, and automate cloud operations, and... Subscribe to learn more
Dxc Technology Co
Dxc Technology Co is a public company operating globally in the information and professional, scientific and technical services sectors. The company's offerings include it consulting services, it systems integration services, it support services, software testing services, it hosting services. Founded in Subscribe to learn more
Lumen Technologies, Inc.
Lumen Technologies, Inc. is a technology and communications company serving domestic and global business customers. It operates under three brands: Lumen, its flagship brand for the enterprise and wholesale markets, Quantum Fiber, which provides fiber-based services to residential and small business customers;... Subscribe to learn more
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Procurement Management KPIs for the IT Hosting Services Market
Managing vendor performance throughout the contract period is easier when tracking specific key performance indicators (KPIs). For example, buyers should monitor Average Resolution Time and Customer Retention Rate. Buyers may experience better performance throughout their contracts if they establish service level agreements (SLAs) based on Availability and other factors.
| KPI | Level of Importance (1-5) | Measurements | Key Considerations |
|---|---|---|---|
| Average Resolution Time |
|
Total resolution time Number of resolved tickets |
The average resolution time represents the average amount of time it takes to resolve a support ticket. The average resolution time can be used to determine a company’s support responsiveness. Ideally, buyers should seek suppliers offering 24-hour support, particularly when sourcing overseas vendors whose normal business hours do not coincide with the buyer’s hours. |
| Customer Retention Rate |
|
Number of customers at start of period Number of customers at end of period Number of customers added within a period |
The customer retention rate represents the number of customers a company is able to retain over a set time frame. The customer retention rate can be used to determine the extent to which a company’s customer base fluctuates over time. As IT hosting services are critical business services and are procured on a monthly basis, a strong customer retention rate may indicate service reliability. The customer retention rate should be cross-referenced with customer reviews to ensure that buyers are simply not switching due to the high switching costs associated with this market. |
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Questions to Ask During Procurement Negotiations
How can I gain leverage during negotiations?
Quality Control
What SLAs do you offer, if any? How negotiable are the terms of any SLAs you offer?
What response time can you guarantee in the event of a network malfunction?
Price
What is the reasoning behind the pricing model you apply to your service?
Would you consider applying any other pricing models to your service?
Security
What measures do you take to secure your clients' networks?
Can you describe the last time the security of your network was compromised? What measures did you take to resolve this breach?
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IT Hosting Services RFP Guidelines
What should my RFP include?
Organizational Overview
Buyers should describe their business background and the purpose of the proposal.
Buyers should include a point of contact and appropriate contact information.
Statement Of Need
Buyers should describe their current IT infrastructure, which should include how many servers they operate, data storage capacity, operating platforms, and any streaming services they use.
Buyers should state what IT hosting features they desire, such as virtual platforms, web-based administration, the number of hosted user accounts, and migration assistance.
Project Budget
Buyers should include budgetary constraints for services.
Buyers should define payment schedules.
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We display average pricing information, trends and market data.
Our Reports include:
- Opportunity assessment
- Market dynamics
- Recent developments
- Positive and warning trends
- Buyer power levers
- Price environment and market pricing
- Geographic wage rates
- Global market updates
- Total cost of ownership
- Cost structure benchmarks and analysis
- Supply chain and vendors
- Global supplier breakdown
- Market share concentration
- Regulation and business requirements
- Vendor management and KPIs
- Sourcing strategy guidance
