Managed hosting has evolved significantly since its initial focus on managed Web storefronts, to a more general-purpose delivery mechanism, including a form of IT outsourcing ideally suited for the midmarket. While it still pales in comparison to the IT outsourcing industry in size, this multibillion dollar segment is growing at a healthy rate for its diverse group of constituent suppliers, who represent a broad mixture of supplier types. Since the eBusiness era began, managed hosting has been a principal alternative to colocation for customers without a "do-it-yourself" bias and appears likely to grow in popularity based on expressed buyers' preference. Emerging virtual solutions including cloud-based services will likely reinforce this. Sourcing and vendor management professionals should view hosting as a useful alternative to IT outsourcing and colocation in sourcing opportunities including applications management and in smaller opportunities where a building-block-oriented approach works well.