Big Local Data Center Could Help Grow Local IT Services

Africa is one of the unexplored territories for business in general and shared hosting business in particular, that waits for being uncovered. In our attempt to understand the digitalization and potential for shared hosting businesses of the continents better, this time, we traveled to Tanzania. There, we met with Evans Makundi, the managing director of evmak.com, a company operating in the fields of hosting and ICT consultation, and talked about everything shared hosting.

Understanding the Tanzanian Market

Tanzania is a country of 60 million people. The country has an estimated internet penetration rate of around 50%, which is higher than the African average. The number of local domains registered in the country is approximately 20,000, but the number is bound to grow because of the new regulations we’ll take a closer look below. The main domain .tz, but there are many other domains with that extension, such as .info.tz, co.tz, etc. Currently, people mostly use the Internet for social media, but the understanding of websites and the Internet outside of social media is growing, opening up new opportunities.

Doing Shared Hosting Business in Tanzania

Currently, because of new laws introduced by the government, every company that’s registered in the country needs to have a .tz domain. This signals potential growth for the usage of the local domain, as well as an increase in the number of domains used per client. Evans mentions that before, each hosting client had only one domain, but now, they have at least two: .com and .co.tz. “These types of laws are good for developing countries, as they are boosting the digital development of the country.”

In Tanzania, as in many countries, there is a law requiring companies to host the data in the country. However, the law cannot be reinforced, because of the lack of affordable data centers. Once there are more data centers in the country, the rule will start to work.

Big Name Companies in Tanzania

Companies like Wix, GoDaddy, and Weebly have an active presence in Tanzania. They advertise a lot, mainly using social media, and have a big share of the market of individual users. “Individuals host their websites abroad, but businesses choose local hosting, and they eventually come to us.”
Building a good data center in the country, according to Evans, is one of the ways to reduce the number of people hosting their websites abroad. Currently, there are 3 data centers in the country, managed by the local mobile network providers, and they are quite costly. Many people can’t afford them, so go with larger international brands, often compromising the quality.

Local Is Better

For many people, hosting their website abroad is a result of a lack of choice, mentions Evans. With local companies, they have the chance to get local support, pay in local currency, and get local receipts, to name a few benefits. Local support is especially important since only 20-30% of the country's population is proficient enough in English to conduct business. The rest of the people prefer Swahili and expect companies to provide 24/7 support in Swahili.

Quality vs Price

Whether people go for quality or price largely depends on the clients. The ratio, according to Evans, is around 50/50. Some are ready to go for the cheap option at the expense of the quality, and some are ready to pay however much it’s needed. The payments are annual, at around $100/year per company. The average domain price is $12/domain.

For payment gateways, people use cards or local gateways, but the most preferred option is mobile money. PayPal is not a very popular option in the country: people can use it to pay, but not receive money, so it puts some limitations. Evmak has its own payment gateways that it offers to the clients, such as M-Pesa, Tigopesa Wallet, Airtle Money, to ensure a smooth experience.

Website Builders as Tools of Choice

Website builders are starting to gain popularity in the country, but there is still a long way to go since the idea of people about the Internet is still developing. “Most people who require our services don’t really understand website builders, so they often need help. I think it’s the right time we push the market out there. People don’t really know how to use the Internet, so they are challenged. Something needs to be done to educate people.”

Wrapping Up

Looking at the newly-emerging market of Tanzania, where people start to move beyond social media and perceive the Internet as something larger, was beyond interesting. Because of its size, and growing digitalization, it’s a market with a lot of potential that need to be considered. We can’t wait to see what’s in store for this beautiful country and will keep our eyes on the developments.