The application hosting market appears to be demonstrating some trends, as captured in this recent eChannel Line report. Infrastructure outsourcing is booming, which will provide significant opportunities for those players in the application hosting space. Certain trends, however, should be observed so these players can properly align their strategies with actual opportunities.

It is becoming the norm to outsourcing the infrastructure. Businesses want operating expenses, not capital expenses. As businesses throughout the marketplace have had to re-evaluate IT spending, changes have been seen in moving to hosted platforms. The same is true for application hosting as companies don’t want to invest any more money in servers or data centers.

In terms of cloud computing, it seems that supercomputing will embrace the hosting industry over the course of the next year. At the same time, the perception of cloud hosting will also shift. There will be an increased focus on the flexibility this platform offers. Companies can leverage application hosting solutions to gain greater flexibility while they still enjoy the capabilities they need from the solution.

Leaders in the application hosting space should also expect to see vertical adoption to be a trend that will emerge in 2011. This is especially true in the gaming and entertainment industry. Application hosting will be the preferred platform simply because technology changes so rapidly, companies in this vertical can’t afford to maintain the data centers or servers necessary to always stay on the cutting edge. Hosting solutions enable this up-to-date mentality, without breaking the budget.

Data centers have certainly changed over the last decade. The number of companies operating their own data centers is declining. The companies that are thriving are those who provide data center space for hosted solutions. Data centers are streamlining the way they operate, becoming more "Green" and appealing to the environmental friendly challenges of today. Application hosting providers will benefit from the resurgence of the data center.

The virtualization space will see a raging battle between Xen and KVM as the virtualization platform for Linux. Vendors are likely to dictate the outcome and unless users speak up, they may not have as much access to the platform they need. The fact that there is a battle raging at all is good news for Linux users who desire virtualization.

The move to more hosting solutions is inevitable and those players who can remain on the forefront of innovation will dominate. As the demand for application hosting continues to grow, this will also open up new opportunities for market entrants and those seeking to claim the lion’s share.