Starting up at the Bandwidth Barn

30 April 2003

The UUNET Bandwidth Barn in Cape Town, an incubator for information and communications technology start-ups in the Western Cape, is home to a growing number of international companies, with tenants from countries as far afield as the US, UK, Australia, Scandinavia and the Netherlands.

The Barn was set up 18 months ago by the Cape Information Technology Initiative (CITI), a not-for-profit agency focused on developing the information and communications technology (ICT) sector in the Western Cape. The Barn’s tenants have grown from 12 to 48 in that time, prompting a move to larger premises in the city.

CITI marketing manager Judith Middleton said the Barn’s drive to raise South Africa’s international profile as a first-class tourist and business destination was starting to pay off.

“It is encouraging to see a large number of flagship IT companies either using South Africa as a launchpad into markets in the US, Europe and Africa, or as a test site for locally produced products destined for global markets.”

Among the international tenants located in the Barn is US company Pangea Solutions, which creates cost-saving solutions for labour-intensive, data-driven businesses.

Pangea founder Jesse Heitler said South Africa has several competitive advantages in the global, Internet-driven market. “South Africa is one of the few countries with modern telecommunications infrastructure, sub-sea cable connectivity to the Internet and low-cost labour”, Heitler said.

“Pangea has benefited particularly from setting up shop in the UUNET Bandwidth Barn, where minimal outlay was required and strong infrastructure supported a quick entry into the market. The low cost of labour in South Africa has also given the company considerable advantage over its competitors in the United States and Europe.”

Another company showing confidence in South Africa is NBI New Business South Africa, which set up office in the country in 2002 as the sister company to Netherlands-based New Business Europe.

The company focuses on assisting European companies looking to partner with South African companies and vice-versa.

“One of the biggest obstacles to business investment in South Africa is the lack of knowledge of the country and the fear of moving into unknown territory”, said NBI founder Pieter Smits van Waesberghe.

“We are able to provide an important service through supporting the development of foreign business in South Africa. We essentially act as the middleman, supplying both parties with the necessary information, preparing documents for European standards and demands, engineering and representing foreign projects being rolled out in South Africa.

“The idea of forging stronger business linkages between South Africa and Europe is immensely exciting and will bring enormous economic benefit to the country”, said Van Waesberghe.

Many of the local tenants in the Barn make similar use of the technology and networking opportunities available to take their business offerings to international markets.

Software development house Application Junction, a black economic empowerment company, has doubled its staff since starting up in 2002 and recently landed two corporate clients in the UK, while marketing consultancy Ikineo has made big inroads into the consumer brands-driven Asian market, and is now eyeing China and the UK.

Taking advantage of the Western Cape’s attractiveness as a tourist and business convention destination, entrepreneur Desiree Smits has started a company, CAPE.MOTION, which aims to attract more international meetings, conferences and exhibitions to South Africa.

“Probably the biggest advantage we gain from being located in the Barn and in Cape Town are the marketing and networking opportunities”, said Smits.

The Bandwidth Barn offers entry-level and small IT businesses reduced Internet connectivity costs, affordable office rental, shared office facilities, and membership of an entrepreneurial IT community where experiences, expertise and resources are openly shared.

For more information, visit the Bandwidth Barn website. Also see the list of South African ICT company success stories on the Cape IT Initiative website.

SouthAfrica.info reporter