TL; DR: HOSTAFRICA is one of South Africa’s pioneering cloud services providers. It offers affordable web hosting services for small businesses, including VPS, cloud servers, and dedicated servers. HOSTAFRICA’s additional services include managed WordPress hosting and site builder tools that give entrepreneurs the tools they need to build a web presence. The company also recently acquired Nigerian web host DomainKing — the latest in a series of strategic acquisitions — to continue growing its brand.
Affordable, high-grade web services are vital to value generation across commercial sectors and industries worldwide. According to Fortune Business Insights, the global market value of web hosting services stood at $75 billion in 2020. That figure is projected to reach $267 billion by 2028 — a compound annual growth rate of 18%. The African economy is poised to drive a sizable portion of that growth as digital communications infrastructure expands across the continent, making internet connectivity available to more businesses.
But the COVID-19 pandemic was a setback for those expectations, as a combination of lockdowns and economic contractions stalled many businesses as consumers stayed home. While the dire situation tested B2B partnerships, it also provided ways to add value to them.
That is particularly true of relationships between web services providers and their customers, as is the experience of South Africa-based HOSTAFRICA. HOSTAFRICA was founded in 2015 and focuses mainly on SMB needs. Its portfolio of products and services covers nearly everything a top web services provider offers — from managed hosting to dedicated servers and other value-added offerings.
When HostingAdvice.com first spoke to HOSTAFRICA in September 2020, the self-funded company was preparing to introduce more managed services, including WordPress, ecommerce tools, and container management services Docker and Kubernetes.
Since then, the company has enhanced its reputation for exceptional customer service by offering extra support to help businesses survive the economic hardship caused by the pandemic.
“Our customers have been hit really hard — and we have tried to find ways to support them rather than seeing them feel compelled to cancel their contracts with us,” said Ethan McPherson, Business Development Manager at HOSTAFRICA. “It has been the inspiration of some creative thinking when it comes to pricing and billing.”
Shifting Pricing Models to Support Crisis-Hit Customers
HOSTAFRICA faced challenges in allowing customers to maintain their contracts even though their business operations were interrupted during the pandemic.
“Because of the economic decline due to COVID-19, we had to stretch our pricing models to remain as competitive as possible,” Ethan said. “We had a lot of customers that wanted to cancel their contracts because they were not able to operate commercially due to the restrictions. Many of them who didn’t want to cancel would request a payment holiday or a discount, so we had to respond to that.”
The HOSTAFRICA team remained steadfast in its commitment to customers and resolved to help them through the situation. HOSTAFRICA quickly rejected providing service-level downgrades at reduced prices as an option, Ethan said.
“We had to be extremely creative with our billing and not compromise on service or our infrastructure, while we continued to provide the consistent quality at a reduced price,” said Ethan.
That serious situation allowed HOSTAFRICA to demonstrate its commitment to customers, help them innovate, and come out of the pandemic with a growth mindset.
“We recognized early on that certain verticals were in immediate trouble. Customers in the tourism and restaurant sectors, for instance, took a massive knock. So we supplied them with heavily discounted services, or free services where we could — to help them to get through the crisis,” Ethan said.
Understanding Priorities With Solutions That Scale to Fit Needs
The pandemic affected many of HOSTAFICA’s customers, who were in hard-hit sectors and were overwhelmingly SMBs. That was a market segment where HOSTAFRICA has found opportunities for customer acquisition and organic growth.
“Some 90% of our revenue derives from SMBs. They range from a plumbing firm that wants what we call a ‘business card website’ to web hosting reseller, all the way up to a customer we have that specializes in medical software that has between 50 and 60 virtual servers,” Ethan said. “So I would say that we can cope with whatever scale our customers require. Across the scale we also have customers who have 15 high-performance dedicated servers.”
The company has, traditionally, not targeted large businesses. However, it works with a few enterprise clients that found HOSTAFRICA as a perfect partner for their requirements.
Ethan said he believes that more opportunities will come from enterprises looking to move away from the enterprise-scale hosting companies and cloud services providers.
“If they need a simple solution, like a VPS, it can be very complicated with the big cloud services players. Have you ever seen an invoice from one of those big cloud players? It’s like having to go through a spreadsheet — you need a degree in finance just to understand it,” Ethan said. “We understand that customers often just want something basic like a VPS or dedicated server that works — they do not want providers trying to upsell them. That’s where our solutions win out, I’d argue.”
South African Datacenters Ensure Low Latency for Local Customers
HOSTAFRICA’s server solutions are the backbone of its product portfolio and value proposition. The company was founded by German cloud computing pioneer and HOSTAFRICA CEO Michael Osterloh.
“HOSTAFRICA’s Web Hosting packages are hosted on SSD servers in South Africa to ensure low latency,” said Ethan. “Our web hosting runs on the cPanel control panel. We provide vulnerability detection and patching, unlimited web traffic — and state 99.9% uptime.”
The company’s packages also include a free .co.za domain, disk storage up to 200 GB, a free SSL certificate, and daily automatic incremental backups of customer data, among many other specifications aimed at SMBs.
HOSTAFRICA’s Linux VPS plans are hosted on physical servers that support all major Linux distributions, according to the company. In addition, container VPS Hosting options are powered by Virtuozzo 7 and SSDs. Servers are also hosted in a datacenter located in South Africa to ensure the same low latency.
“HOSTAFRICA offers cloud server hosting in South Africa, the U.S., the UK, and Germany,” Ethan said. “We also offer the choice between Linux Cloud Server hosting and Microsoft Windows Cloud Server hosting. We only offer VPS hosting in South Africa, so if a customer’s looking for a server hosted in the U.S., UK or Germany, our cloud server solutions may be better suited to their needs.”
Offering Personal, Efficient, and Timely Customer Support
Customer support is a long-standing point of pride for HOSTAFRICA, and the company describes itself as “fiercely committed to providing outstanding service.”
“We uphold this standard of excellence because hospitals, medical companies, ecommerce businesses, financial institutions, and other essential businesses depend on us to operate uninterrupted at all times,” said Ethan. “I would say that perhaps our biggest differentiating strength is customer service. It’s a responsibility we take very much to heart.”
In South Africa, HOSTAFRICA replies rapidly to tickets or phone customers directly. If a customer encounters a problem, the company digs in to help them. Ethan said he believes that offering premium support at affordable prices is a significant value driver.
HOSTAFRICA also has set a time frame in which it aims to respond to client tickets. The company strives to address all incoming customer concerns within an hour.
“The scope of support we offer varies throughout the many different services we sell, but as a principle, we strive to always provide outstanding support that is personal, efficient, relevant, and timely,” Ethan said.
He also pointed out that customer support is not just about responding quickly. The quality it provides throughout the experience is also vital.
“We always follow up until we are sure that a customer that has raised a ticket is fully satisfied that their issue has been resolved,” said Ethan.
HOSTAFRICA: Expansion Driven by Organic Growth and Acquisitions
HOSTAFRICA’s growth has been driven by organic customer retention and acquisition. The company started on that path in 2017 with the acquisition of VPS Networks, one of South Africa’s oldest virtual server providers.
In March 2020, it also acquired two web hosting companies — Gweb Hosting and Hob Host. By the end of that year, HOSTAFRICA had added managed ICT services provider Clickworks Internet to its fold.
HOSTAFRICA’S latest acquisition — made in September 2021 — is its first outside South Africa. Domainking is one of Nigeria’s largest shared web hosting companies, with more than 6,000 websites hosted on its servers.
In addition to its focus on affordable website hosting, the brand offers a website builder and domain name registrations. Domainking pays particular attention to offering the Nigerian .ng domain extension and has a reported domain market share of more than 0.6%.
“Even though HOSTAFRICA has seen steady organic growth in recent years, we believe that there are always advantages to bringing in an established business — especially one that’s established in unfamiliar geographical territory,” Ethan said.
The move accelerates the company’s plans to expand into more markets in Africa.
“Nigeria is a country that has a population that’s almost four times the size of South Africa’s, so the opportunities for further growth and consolidation are evident. Bringing Domainking onboard will be another start point to establish quality hosting and web services within key economic hubs of Africa.”