August 29, 2001 - It's been a tough year for Web hosting companies. Even as markets continue to falter, competition continues to heat up. This has forced many Web hosting companies to seek out a new strategy, or at least try to re-invent themselves.
Companies seem to have been particularly careful recently to try and avoid promoting lower end Web hosting services like shared and simple dedicated accounts. Many companies have come to believe the shared hosting market is too saturated to yield significant results. Instead, many companies have started to take aim at businesses looking for high-end managed and enterprise Web hosting services services.
Affinity Internet (affinity.com), however, says it isn't about to jump ship. In fact, based on its recent successes, the company doubts it will changes its focus, which is geared almost entirely toward the SME (Small to Medium Enterprise) market, any time soon.
"We see the SME market as being a long-term, steady-growth business for us," says John Zdanowski, Affinity's Chief Operating Officer, adding that the SME sector is "an extremely lucrative and highly fast-growing business for us at this point."
If recent numbers from the company are any indication, Affinity is certainly squeezing the supposedly saturated shared market for all its worth. The company's last quarterly report boasted 18% revenue growth and 8,000 new customers - not a small feat, considering markets have done little to help most Web hosting companies. "Both quarters (this year) have exceeded our expectations overall," Zdanowski says. And because the hosting market is filled with companies gearing their services to SMEs, competing with other hosts isn't easy. "SME is a tough market," Zdanowski says. "You have to operate efficiently, you have to know the customer... you've got to communicate well."
Shared hosting currently drives almost half of Affinity's revenue, and the company is signing up new clients at a blazing pace. "We're adding 4,000-plus new shared customers a month," says Tiffani Bova, Affinity's Director of Sales and Channel Programs.
Of course, SMEs often require hosting services that go beyond shared accounts. Therefore, Affinity has made sure it customers can purchase scalable hosting solutions by offering a diverse spectrum of Web hosting services. With the company adding close to 100 dedicated servers per month to its roster of clients, high-end services have also become important to the company. Aside from basic shared and dedicated services, "We'll offer multi-server configurations for $20 thousand a month," Zdanowski says. "That's a broad range."
Zdanowski and Bova also credit a significant portion of the company's success to its reseller program, which now features 1,800 members actively recruiting new clients. Zdanowski says the company has been able to retain such a strong reseller base because "internally, we've done a lot of things to keep customers happy." By leveraging its user base, keeping its churn rate low and paying careful attention to the returns its marketing campaigns generate, Affinity has been able to place itself on solid financial footing with a rosy future outlook both from a revenue and customer perspective. "We're focusing on execution," Zdanowski says. "We're still focusing on building a strong, solid machine."
