Hostway announces reseller program

Web hosting company Hostway has spelt out its first multi-tier reseller program for Australian partners.

Michael Farrell, GM for Hostway in Australia, said the US-based company opened its first Australian office in Sydney in April and hopes to swell reseller ranks from about a dozen to between 100 and 150 in the next 12 months. '[Our] organic growth will be driven 20 to 40 percent by our reseller program,' he said.

Farrell said the new three-level program differed from those offered by Australian competitors. Hostway had based it on partner programs that had proved popular in North America and Europe.

'Most of the reseller programs in Australia offer a discount to people. That's attractive to people who want to take the responsibility of communicating from the customer, because then they can take the difference and add that to their bank,' he said.

Farrell said the lowest tier - dubbed Affiliate - was more like a referral-based advertising campaign. Tier one  resellers would add a clickable Hostway logo to their websites. Browsers who clicked through would be referred to Hostway's products and services.

Affiliate resellers would be paid a commission for every customer who used Hostway for more than 45 days. Hostway would close the sale, bill and support customer.

Farrell said the middle Agent tier might prove attractive to the company's existing resellers in Australia, especially web developers. Resellers would pay a 'small' one-off fee to offer co-branded webhosting services. Hostway would pay resellers a percentage of the revenue earned. 'That's ongoing, so builds a recurring revenue stream,' he said.

Agent-level resellers would get technical and customer support, a reseller portal and access to service managers. Earnings would be based on revenue rather than the number of orders.

However, he said the top Private tier would offer a contra structure similar to that familiar to most Australian webhosting services resellers. Resellers would pay monthly fees, discounted by the amount of business completed but retain ownership of the customer.
Hostway would look after the facilities, network, equipment, architecture, deployment, software and billing.

'It's more like other webhosting reseller programs in Australia, discounting and offering services with their own branding and they have the responsibility for consulting, technical support and other issues,' Farrell said.

Hostway focuses on SMBs and claims 300,000 customers in six countries for its domain name registration, shared hosting, e-commerce hosting, dedicated server and fully managed hosting services.

Farrell said the seven-year-old company was one of the five largest pure-play webhosting companies in the world and was expanding rapidly. He said Hostway's closest competitors in Australia included pure-play webhosting and ASP-type companies such as WebCentral and OzHosting.

'Telstra is attempting to be successful in this market but how successful they are I don't know,' Farrell said.

He predicted further stratification and consolidation in the local webhosting industry. 'Most definitely,' he said.

Hostway recently bought GlobalHost's webhosting co-location customers and infrastructure for an undisclosed sum, hard on the heels of its purchase of Dedicated Hosting.