The global virtual private server market size is expected to grow from USD 2.4 billion in 2018 to USD 5.0 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 15.3% during the forecast period. The market growth is attributed to the cost-effectiveness of the VPS services as compared to dedicated hosting that uses physical servers along with high scalability and customization capabilities. Rising adoption of virtualization and continous spending by enterprises of all sizes on secured web hosting are expected to drive the demand in the global VPS market

Organizations use VPS for their Windows and Linux applications. Linux VPS is one of the best options if a user wants more control over the things that have been installed on the server where the website has been hosted. Linux VPS provides with a multi-tenancy feature, which means allocation of resources, such as email accounts or disk space can be done easily. Linux VPS is easy to install and viable to deploy tools and add-ons as per user’s requirement. Thus, the Linux segment is expected to register higher growth in adoption.

The virtual private server market has been segmented by organization size into large enterprises and SMEs. Currently, the market share of the large enterprises segment is estimated to be higher; however, the market size of the SMEs is expected to increase at a higher CAGR in the coming years. The growing awareness of the benefits of VPS and the business expansions by global vendors in the SMEs segment are expected to be driving factors for the growth of VPS market.

Major vendors in the global market include AWS (US), United Internet (UK), GoDaddy (US), Endurance International Group (US), OVH (France), DigitalOcean (US), Plesk (Switzerland), Rackspace (US), A2 Hosting (US), Liquid Web (US), Linode (US), Vultr (US), DreamHost (US), InMotion Hosting (US), and TekTonic (US).

Major growth drivers for the market include several advantages of VPS such as availability of cost-effective virtual private server, provide greater customizations, and scalability and more control with virtual servers than shared hosting. VPS enables organizations avail dedicated servers in the virtual environment. The approach provides enhanced control over servers, agile deployment of virtualized workloads, reduced infrastructure cost, and improved operational efficiency. The adoption of cloud services has, in turn, spurred the demand for virtual private server market for hosting and for supporting other critical business functions.

Lack of technical knowledge and need of preventive IT maintenance challenges the adoption of VPS services. The other challenge which can be faced is the need of infrastructure. Rising demand for the cloud infrastructure reduces the operational cost but can affect the productivity and efficiency if the servers are down.