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Australian hosting provider Dreamscape Networks is merging with Singapore’s Vodien Internet Solutions in a A$29.7m (US$22.8m) deal as part of ongoing efforts to expand its footprint in Southeast Asia.
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The merger, being financed through Dreamscape’s existing cash reserves, will combine the infrastructure and operations of the two hosting companies, as well as their trading entities and parent businesses.
“The leadership team at Vodien has substantial knowledge of the local industry, with a strong track record of growth, and will be a great addition to our senior executive team,” said Dreamscape’s managing director and CEO Mark Evans. “The culture they have developed and led is a perfect fit for us.”
“By joining forces with this robust Asian hosting brand, we can leverage its current market position and strong customer awareness to immediately increase our footprint in the Southeast Asia region, without the need to establish our own Singapore hub infrastructure,” he said.
In an interview with Computer Weekly, Evans said the merger will enable the company to meet the needs of small and medium-sized enterprises (SMEs) in Southeast Asia that are going online via their smartphones for the first time.
“We will be educating them on getting their domain names and a professional e-mail address, so every time they send an email on their smartphones, they’re branding themselves as a credible business,” he said.
On the synergies that can be expected from the merger, Evans said there will be opportunities to cross-sell and up-sell products and services.
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Customer support teams will also be consolidated across the region, while local language support will be available after Dreamscape has successfully penetrated the region’s English-speaking markets including Malaysia and the Philippines, said Evans.
Although the hosting space is being commoditised, Evans said there is still room for growth in Southeast Asia.
For instance, he noted that domain name hosting markets in emerging countries such as Indonesia and Malaysia have been growing by 18% to 20% over the past year. “This is a lot higher than in mature markets where we’re seeing 3% to 5% growth,” he said.
To stand out from other hosting providers, Dreamscape is offering a slew of tools – from web design to digital marketing and search engine optimisation – built by a key development team in Ukraine.
Vodien’s CEO Alvin Poh said the decision to invest in in-house tools – rather than offer similar ones from independent software vendors (ISVs) – was driven by the need to provide better user experience and support for customers.
“We’ve had experiences with ISVs that were not responsive and could not provide us as well our customers proper support and resolution of issues,” he said.
In December 2016, Dreamscape, known in Australia for its Crazy Domains domain name registration service, debuted on the Australian Securities Exchange following a successful initial public offering (IPO) that raised A$25m.
At that time, the company also announced its intent of growing the company through international and domestic expansion via acquisitions, new product development and entry into new markets.