When Nigerian edtech startup, Flexisaf, decided to cut costs earlier this year, it realized it needed to reduce its spending on technology. <\/p>\n
One of the companys biggest costs was the money it paid Google to use its Workspace a collection of Google products including Gmail, Drive, Calendar, Meet, and Docs. Flexisaf had used Google Workspace since 2010, but with 100 employees now, it was becoming too expensive for the small business. <\/p>\n
In March, Flexisaf found a solution to its problem in Zoho, an Indian company that offered similar products as Google, but at a fraction of the price. Flexisaf has started the process of migrating to Zoho once that is completed, it will save the company around 8,000,000 naira ($6,960) a year, Saad Shehu, Flexisafs people and talent manager, told Rest of World. <\/p>\n
The approach weve taken is to introduce the mail and meeting tools first, and drive adoption of the other features within the coming months, Shehu said. <\/p>\n
Zoho, a lesser-known rival of Google and Microsoft in the enterprise software space, has been stepping up in Africa as an affordable alternative to the global giants. The company has hired local staff, introduced payment options in local currencies, and even sponsored a cricket tournament to dig its heels into the market. But even as it has seen some early success, African tech experts say Zoho needs to strengthen its branding and engage with the local tech community to give serious competition to its larger rivals in the future. <\/p>\n
There is a tremendous opportunity for digital transformation in African countries, Praval Singh, vice president of marketing and customer experience at Zoho, told Rest of World. A lot of companies are adopting digital, either for the first time or theyre on that path of making their businesses more efficient using technology, he said. Rest of World spoke to seven startups in Nigeria, Kenya, and South Africa that have ditched Google and switched to Zohos products over the past year or so. <\/p>\n
While Zoho launched in India in 1996, it was only in 2019 that it started on-the-ground operations in Africa, with one salesperson each in South Africa and Nigeria. Now, it has about 60 employees across the continent, Zohos regional manager for Africa, Andrew Bourne, told Rest of World. Besides work management tools like the equivalent of Gmail or Google Drive, Zoho sells software for customer relationship management, human resource management, and accounting, among other products. <\/p>\n
Globally, Zoho has over 100 million users. Its clients include e-commerce major Amazon, leading carmaker Mercedes-Benz Group AG, Indian airline SpiceJet, and food delivery platform Zomato. Zohos advantage over its bigger rivals is that it does not run ads or sell customers data to third parties, Singh said. <\/p>\n
In 2023, Zohos user base in Nigeria grew by 50% year-on-year, while its revenue from South Africa rose by 73%, Bourne said. The company refused to disclose how many users it had in Africa or how much revenue it had made from the continent. A Zoho spokesperson told Rest of World its clients include Kenyan lifestyle app Pesapal, South African fintech Payfast, and events ticketing portal Quicket. The companys combined annual revenue has crossed $1 billion. <\/p>\n
But despite its initial success, Zoho doesnt have the same support for the local developer ecosystem as Google does in Africa, according to Prosper Otemuyiwa, a Nigerian software engineer and co-founder of ForLoop, an African nonprofit developer community. They dont have enough goodwill yet, Otemuyiwa said. [Google] has built an ecosystem of tools and support, [and] users are likely going to hesitate before clocking out of [it], just as people would rather pay for an Apple product just to remain within that ecosystem of tools. <\/p>\n
In 2021, Zoho started allowing African companies to pay for its software in local currencies. This decision has been a major reason for Zohos success in Africa as it allowed customers and potential clients to avoid regulatory hurdles around dollar spending, Kehinde Ogundare, country director for Nigeria, told Rest of World. We saw the rise in adoption of Zoho technology in Nigeria when we started pricing in local currency and building a local support team. <\/p>\n
In comparison, African companies can pay for Google Workspace only in dollars and euros, as verified by Rest of World. <\/p>\n
As long as theres a naira equivalent for anything thats coming in dollars, Zoho will win, Adewale Yusuf, co-founder and CEO of edtech startup AltSchool Africa, told Rest of World. They have great products and pricing whats left is to build trust and engage in strong marketing activities to completely shake out the big guys. Yusuf, who has co-founded three startups, said all his companies now use at least one Zoho product. <\/p>\n
Google and Microsoft did not respond to Rest of Worlds queries about offering localized solutions in Africa, including adding payment options in local currencies. <\/p>\n
Zoho has also been aggressive with its pricing in Africa. Zoho One, a bundle of more than 45 products, sells for just $6.70 per user in Nigeria, compared to $30 in the rest of the world. <\/p>\n
Cost is the biggest driver for me, Neto Ikpeme, founder and CEO of Nigerian health-tech startup Wellahealth, told Rest of World. Ikpeme had opted for Zoho over Google when he launched his company in 2016. We know that its difficult enough to access dollars, and if you can, you might want to reserve it for other services that you cant pay for locally, he said. But the low pricing may not be enough for Zoho to dethrone its larger rivals. Users told Rest of World the companys products lack sophistication. <\/p>\n
Zoho hasnt done a design upgrade in a while and it is starting to get a little bit stale. They also need to have better mobile apps, said Vijay Anand, an Indian angel investor and founder whose startups use Zoho. When he tested Zohos new Slack-like service, Cliq, Anand was disappointed by the lack of emojis and GIFs. Its the one happy thing the teams have, he said. <\/p>\n
ForLoops Otemuyi said Zoho lacks a developer community that can support its products in Africa. Theres no strong community to leverage when you run into a problem, he said. Google has that in abundance and across the continent in terms of developers, startups, and IT professionals generally. <\/p>\n
Zoho is partnering with local business communities, incubators, accelerators, and venture capital firms to tackle that challenge, Veerakumar Natarajan, the companys regional manager for East Africa, told Rest of World. In Kenya and South Africa, for instance, it has partnered with startup incubator hubs like J-Hub Africa and Silulo Foundation, respectively, Natarajan said. <\/p>\n
Google is a lot bigger than we are in terms of size, Singh said. But our portfolio, with a spread of 55-plus apps, is the most prolific in the industry, owing to our bullish focus on [research and development]. He said some customers might use only Zoho, while others might use it along with Googles products to meet different needs. It takes each of a kind to make a village, said Singh. <\/p>\n
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Zoho is the Google Workspace alternative African tech companies are choosing - Rest of World<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" When Nigerian edtech startup, Flexisaf, decided to cut costs earlier this year, it realized it needed to reduce its spending on technology. One of the companys biggest costs was the money it paid Google to use its Workspace a collection of Google products including Gmail, Drive, Calendar, Meet, and Docs. Flexisaf had used Google Workspace since 2010, but with 100 employees now, it was becoming too expensive for the small business. Continue reading