Hoiio’s Ong Kok Choong: Can SaaS be profitable at $1 a month?

Now that we have identified ~70 businesses on the Maps of SaaS startups in the Philippines, Malaysia and Singapore, it’s time to get to know them, one by one.

We met Ong Kok Choong over a ramen dinner (under our chopsticks, no question went un-answered).

 The Hoiio team at Demo Asia

The Hoiio team at Demo Asia

Ong is one of the 4 co-founders of Hoiio, a company which develops communications technologies, such as fax, phone and SMS marketing platforms, so these can be managed from desktops and mobile, with workflows as good as those of Fortune 500 companies.

Chatting with him about SaaS, churn rates and Asia (oh surprise!), we understand more about the uniqueness of the SaaS model in the region and the challenges it faces.

Similar to mobile carriers such as Bharti Airtel in India which found a way to be profitable with ARPU below $10 a month, while western operators are used to $40+, Ong has a vision of a SaaS world with $1 per month ARPU. Those who will make this work will be kings (as a Service of course)!

What is SaaS for you?

SaaS are software which use a single code base, engineered on a multi-tenanted model and often operates on a recurring subscription business model. There are many different SaaS: CaaS, HRaaS...

What are the challenges of SaaS in Asia?

Low ARPU (Average Revenue per User). In Hoiio, we believe that software in Asia and emerging markets need to be delivered at a much lower price point. The winners will be the ones able to deliver software at a price point never seen before. Imagine a company with employees earning about US$100 a month. For them even US$20 a month for a software is way too high relative to the staff cost. At Hoiio, we are aiming to eventually deliver SaaS at US$1 per user per month ARPU!

Another aspect is piracy.

Piracy?? How does someone pirate a cloud software?

I was surprised too when some customers were telling me that our solutions were too expensive compared to Microsoft and other vendors’ software. But the truth is that piracy is still widespread in countries like Vietnam. And a free (pirated) software is obviously cheaper than any price above 0.

What do you love about SaaS?

The cumulative aspect of the revenue. It just recurs.

Which channels are your customers coming from?

Most are organic customers. The more customers we have, the more organic growth we get. Partnerships have been successful for us too, now bringing around 40% of our new customers.