(August 20, 2002) - Over the next three years, Web services and small to mid-sized hosting providers will be the driving force behind explosive growth in the service provider industry, which is expected to reach over $18 billion in the U.S. by 2007, concludes a market analysis study conducted by SWsoft, Inc., a server technology company. In the 18-month study, SWsoft combined survey data, statistical analysis, and in-depth interviews of hundreds of service providers, customers and enterprises to analyze and forecast the Web hosting industry.

Excerpt from the report: "The study found that smaller HSPs have net profits of over 15% and an annual growth rate of 50%-100%. These companies are aggressively launching new hosting products, implementing technologies to automate different aspects of their business and need a way to keep operational costs low while driving profits up. The research report also found that SMBs and small to mid-sized HSPs use Linux because of increased efficiency and affordability."

SWsoft found that the largest growth sector was among smaller hosting businesses, a market segment that reporters, analysts and other influencers have traditionally ignored. In the U.S. alone, there are thousands of small HSPs, run by young entrepreneurs.