Toba Obaniyi is CEO of Whogohost, a Lagos-based company that provides managed web services and domain name registration for Nigerian users. Obaniyi joined Whogohost in 2010 as head of customer support, managing delicate relationships with Nigerian business customers who were only just embracing the internet and cloud services.
What is your most enduring lesson as a tech leader so far?
The biggest lesson for me is moving quickly with ideas and new opportunities. We probably lost some earlier opportunities to build critical services celebrated in Nigeria today. The average Nigerian business doesn’t just want a website; they want solutions to specific problems. For example, social commerce is growing because businesses are looking for other ways to access customers digitally without creating a website. People want tools to improve productivity and collaboration, so if you’re going to benefit from that market, you have to build around customer pain points. We saw the trends, but we could have taken advantage of them quicker than we’re doing now. That’s an enduring lesson, and we’re addressing it.
What are the pain points of operating a cloud and web hosting business in West Africa?
One of our biggest challenges is that even though we operate in Nigeria, we are yet to host all our data in the country successfully. That means most of our costs are in dollars, exposing us to devaluation risks and other macroeconomic shocks over the last decade. As a business in a price-sensitive market, our costs continue to grow, but it’s difficult to pass on the costs to customers.
Keeping talent in this market is also challenging, as more workers find better opportunities globally. And sometimes, regulatory uncertainty can be tough to keep up with.
How will the arrival of Amazon Web Services change the landscape for Whogohost in Nigeria?
I know AWS has seen the opportunities in Nigeria for some time. We don’t have the brand power to compete against these guys, but we provide managed web services for businesses on top of AWS and other cloud providers. We’re not just a firm that sells our branded solution. We also help companies build and get familiar with existing cloud platforms with minimal difficulty, especially regarding payment issues, which is a significant concern for local businesses.
What is driving the flurry of investment into Africa’s cloud sector?
For the first time in a long time, we’re not just consumers but creators in Africa. So you’ll see SaaS (software-as-a-service), fintech and other products coming out of Nigeria with a pan-African or global focus. And with various government policies focused on the digital economy, there’s a growing understanding that, in the short term, businesses might be required to store data locally. Perhaps investors and operators have seen the possibilities if this becomes true. Most data center investments in Nigeria anticipate future demand and are trying to get in early. And for some of these operators, it makes sense to house data closer to where they are needed, especially as more Nigerians use the internet.
How do you manage pricing for web services in Nigeria?
Regarding pricing, our hands are a bit tied because there’s a lot of competition locally and globally. So you can’t overprice relative to competitors because you’ll lose customers. One advantage we have in the local market is that we have a known brand. Hence people tend to choose us relative to alternatives even though we’re not the cheapest. While setting our price, we consider our margin; we have triggers and a band for the Nigerian exchange rate value and our limit for how low it goes before we act. We don’t review prices all at once. We consider products suffering the most impact and those with the lower margins. We bear the losses for a few months until we’re sure of the exchange rate situation. In the past, managing our pricing was relatively easy because devaluations happened slower. But, in recent years, we’ve made adjustments much quicker and frequently as the local currency waned.
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