What is driving web hosting services' growth?

Business is booming – but why is the web continuing to grow so fast?

The web just keeps getting bigger and bigger. We built a staggering 1.12 billion websites by early 2025, with two new websites being added roughly every second. The main drivers are competition for clicks and a market that Statista says is nearly $160 billion, growing at a rate of around 17% every year.

Two forces are doing most of the heavy lifting. Small businesses are still stampeding online and trying to capture the world of e-commerce, bolstered by cheap shared hosting plans bundled with site‑builders from GoDaddy, IONOS, or Wix. It allows cash‑strapped cafés in Bogotá or bridal shops in Bangkok to open their digital doors overnight.

At the same time, governments have sweetened the migration: SME‑digital‑voucher schemes allowing them to spend on things like web hosting, feed a constant stream of first‑time site owners into the funnel. Providers report demand spikes whenever such grants go live, making the number of small businesses set up a major correlating factor with hosting revenues.

The infrastructure race

We’re also seeing enterprises in a full‑blown cloud infrastructure race, powered by AI. Gartner calculates that companies will spend $723 billion on public‑cloud services this year, up from $595.7 billion in 2024.

Cloud titans are pouring concrete to keep up: AWS, Microsoft, and Google Cloud have collectively spent over $200 billion in capex to scale infrastructure for AI workloads.

That spending is remarkably concentrated among the major players. Critics warn that such dominance leaves the internet’s backbone in the hands of a few companies. Those concerns are no longer academic: when Google Cloud suffered an outage earlier this month, the ripple effects were significant.

Yet the boom has blind spots. Surveys suggest a significant majority of CIOs intend to repatriate at least some workloads from public cloud this year, up from 2020, citing runaway bills and compliance worries.

Environmental overhang

Another issue causing a check on growth is the energy demand for cloud hosting. The IEA projects global data centres could reach just under 3% of global electricity consumption by 2030.

In the US, data centre energy use was 4.4% of total electricity in 2023, with projections as high as 12% by 2028 if current trends persist. Carbon‑neutral marketing claims abound, but reporting on actual progress is patchy and scattered across ESG filings, leaving watchdogs to guess whether green‑power purchase agreements are keeping pace with demand.

Most analysts still expect healthy growth through 2030, but the shape of that growth is shifting. For one thing, hybrid is fashionable again.

Even firms born in the cloud now talk about “right‑sizing” expensive workloads and moving steady‑state databases back on‑premises or to regional colocation. Emerging markets are also a new frontier. IDC projects Latin‑American cloud spend to jump at double-digit rates, with some segments over 15% a year, through to 2028 as broadband and fintech races heat up.

Sustainability is becoming central to hyperscaler strategies, and demand for green hosting is rising, with third-party audits and certifications gaining traction.

It all adds up to a continually growing sector. Every coffee cart that signs up for an e‑commerce plug‑in and every bank that trains a fraud‑detection model needs somewhere to live online, and most of them want to do so without the hassle of self-hosting.

But as costs and competition bite, 2025 may mark the year the hosting boom’s uncomplicated growth story starts to slow.