Something interesting has been happening in the web server market over the past two years. Back in Nov 2011, the market share of Apache was 65%. This was a terrific rebound from the 2007-2009 period, when Apache had lost significant market share to Microsoft’s IIS. However, since then, Apache has been steadily losing ground. According to NetCraft, the market share of this popular open source web server is now down well below 50% – In November 2013, the number stood at 44%.
A lot of this drop could be due to one customer – GoDaddy. According to NetCraft, the popular domain registrar and web hosting company recently moved as many as 25 million sites on its servers from Apache to IIS. However this alone does not explain the drop that Apache has been facing since May 2012. To make things more intriguing, we are comparing the drop in share of a popular free open source application against a Microsoft product that does not come cheap.
One popular theory is that Microsoft could be aggressively pushing its web server market share by paying registrars attractive money to switch to IIS for their parked domains. This is a win-win for Microsoft and registrars like GoDaddy since it creates additional revenue opportunities for the registrars while helping Microsoft’s marketing team build a positive web server growth story. This theory does not seem completely false when you look at the market share of Apache versus IIS among active websites. Here, Apache’s market share has fell only marginally from 58% to 52% between November 2011 and November 2013. In comparison, Microsoft IIS’ share has in fact fallen from 12% to 11% during the same period.
If true, this PR stunt from Microsoft may not cause a lot of impact apart from a few articles like this one discussing the Apache share drop. Apache’s market share in the active sites list is dropping – but the gainer has been nginx; another open source provider of web servers whose share in the two year period has risen 3 percentage points from 12% to 15%. The writing on the wall is clear – a majority of the web hosting community continue to prefer open source servers which are no different from the priced alternatives in performance or reliability.
This in no way implies that Microsoft does not have a market that it can cater to. IIS holds significant market share in the enterprise market – big businesses that host proprietary cloud based services, VPNs and running their own business internet connections. These are the enterprises that host their own servers for content delivery and are likely to engage with a trusted partner like Microsoft for their web server requirements. Adopting such an enterprises-first strategy might keep IIS’ market share low on the overall scale, but could help Microsoft focus on the high ROI customer who matter.
However, there is a possible reason why Microsoft does not want to adopt such a strategy and is looking at the larger pie – Google. The Mountain View based Internet Search company has a small share of the web server market (hovering at 3%). But this small share is primarily because the Google Web Server is hitherto unavailable outside Google. The 3% market share is solely through the deployment of the Google platform that runs on the thousands of servers handling services like Google search, Blogger, YouTube, Google+ and Picasa. Although Google has so far stayed away from entering the public web server market, it is only a matter of time before it does. And this could mean a competition between Microsoft’s expensive IIS servers and Google’s potentially free alternative. This is a game that both these companies have played out multiple times on other platforms including the business productivity segment (Microsoft Office vs. Google Apps) which Redmond must be well aware of.
Even if Google does not make GWS public, there is a possibility of Google, or another equally large tech behemoth like Amazon acquiring Apache or nginx in the near future. This could help one of these open source server alternatives gain greater legitimacy in the enterprise segment which Microsoft has traditionally dominated. Having seen how Blackberry has lost ground in the enterprise mobile phone segment after the entry of the iPhone and Android phones, Microsoft will know that it should not be relying solely on enterprises to stay relevant in an open-source dominated market.
The future definitely looks exciting. It will be interesting to see how the market share game pans out in the future as Microsoft realizes that its inorganic market share expansion plans does not impact its usage among the active sites. What do you think?