Cloud computing start-up turns to pricing to keep foreign companies at bay

Local start-up Angani is betting on pricing to have more Kenya-based firms store and access their data on its servers and keep multinational firms at bay.

Angani, backed by a multi-million shilling capital injection, has announced plans to triple its server capacity offering it room to bring down its cloud computing charges further.

Cloud computing means storing and accessing data and programmes over the Internet mainly through third parties, eliminating the need for businesses to invest in costly hardware, software and networking equipment as well as labour.

Angani, which was locked in a boardroom spat last year, plans to cut its prices by up to 20 per cent after a 35 per cent drop in November.

This comes amid increased competition in the cloud computing business, especially now that multinationals like New York Stock Exchange listed Salesforce, Microsoft and IBM are seeking a piece of the business as more local firms look to outsource non-core functions.

Angani CEO Riyaz Bachani says the local start-up does not charge access fees unlike the foreign cloud firms and it bills its clients based on use rather than fixed monthly charges.

Besides Safaricom, Angani is the other firm that has cloud computing infrastructure or servers locally and hence does not incur submarine cable charges-- which ultimately affects pricing of products.

“When you localise content, you are saving the ISPs the cost of going to Europe or US to access this content,” says Mr Bachani.

To host a company’s services on Angani costs from Sh500 per month.

A small company with about 10 employees and running regular applications like mail services and accounting pays between Sh2, 000 and Sh5, 000.

The firm also charges on hourly bases with rates going as low as Sh0.50 per hour. Mr Bachani says the fees are nearly 30 per cent less compared to what foreign cloud companies charge.

Currently, most Kenyan applications and web content are hosted remotely in the US and Europe resulting in high access fees and increased operational costs. 

Angani was last year rocked by boardroom wrangles that led to the exit of its former CEO, Phares Kariuki, and disruption of its services.
The firm says it lost about 12 per cent of its sales following the disruption of services.

“No data was lost. We put up a backup service to ensure that such a disruption won’t occur in the future,” Angani said.

The company is looking to expand to other East African countries in the next three years.