Zoho – what are you really?


Zoho has been getting a lot of attention lately – from the first reports of its CEO Sridhar Vembu turning down a buyout offer from Salesforce.com to being briefly mentioned in Business week magazine article on Inside Microsoft’s war against Google. In a recent interview with Fox Business, its CEO said that Microsoft is the one that has the most to lose because of Zoho. OK, but how?

Zoho has an impressive array of online applications such as Docs, spreadsheets, Mail, Zoho Creator (a database app), CRM, Wiki, Blogs, HR apps etc. The apps are very easy and user friendly with a very nice looking UI. There are many features that have been copied from other apps – for example, Zoho Notes has a lot of features that look and act like the same features in MS’s OneNote. They give it all of it for free to consumers and say that they are making more than a million per month from business customers. They are hiring mostly in India. They have some good things going for them, but then a lot of companies had this for them before they fizzled out.

But after looking at what they offer and trying some of their products, as a business customer, I have been grappling with what exactly Zoho’s focus is. It is one thing to come up with a wide array of cool looking apps, but it is another thing when it comes to focusing on one thing and getting it done right. Is Zoho a MS Office killer? Is it a Salesforce killer? Is it going after SQL/Oracle? Or after Inuit’s Quickbooks or Quickbase? Or is it just another cool looking Google Apps?

I don’t know. Startups during the early days typically tend to execute one thing like hell and when they become successful, they tend to diversify into related areas that leverage their core business. But what exactly is Zoho’s core business? What happens when push comes to shove – what will be left standing? Which apps will get the axe and which ones will be left standing? As a business user I want to know, before I jump into the bandwagon.

Zoho is owned by AdventNet which has its own share of developer and database products which adds even more to the product line.

It appears to me that they are using carpet bombing hoping that something sticks as opposed to using a laser like focus in getting 1-2 of these offerings become kick ass apps with a large base of paid users. You name it – Microsoft, Google, Salesforce.com, FaceBook, SolidWorks all did it this way in their startup days. Pick one thing and execute like hell as if your life depended on it.

I could be missing something completely and would love to be educated. Please let me know.

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6 Responses to Zoho – what are you really?

  1. Gopal,
    Thanks for your post. The way I ask the question is “Can each of our products individually hold their own against their best of breed competition?” Compare Zoho CRM to Salesforce. Compare Zoho Writer/Sheet/Show to Google Apps. Compare Zoho Meeting to WebEx. Compare Zoho Creator to Quickbase/Force.com. In each area, our products hold their own, and we win our fair share of bake-offs against each of these competitors, even in cases where we are a brand new kid on the block.

    Here are some facts that might help explain us better in business terms. AdventNet has been in business 12 years, has over 700 people now and has been profitable all along. So we are not really a start-up, and haven’t been for quite some years. We are smaller than (the surviving) companies of our vintage, but that is because we chose to grow organically.

    On the Zoho suite, we have believed from the beginning that a lot of the value of collaborative productivity is integration across the products. Traditionally database oriented offerings (such as CRM) and document-centric offerings (the office suite) have existed in their separate silos. We believe the key to next generation productivity is integration across these silos.

    Salesforce seems to agree, because they have partnered with Google for the Office suite part. Before that partnership, they tried to acquire us, which tells you what they would have liked to do, but we politely said no because we didn’t believe there was a cultural fit. They even tried to get us to drop our Zoho CRM, in return for a “deal” to integrate our office productivity apps with their CRM suite. It is our diversified business & product mix that allowed us the freedom to resist such unfair demands.

    On the future of Zoho, explained in terms of our history. AdventNet, apart from the Zoho suite, has 40+ products, mostly focused on various aspects of systems & network management. We have tens of thousands of organizations, small & large, as customers. So Zoho will be around!

    Thanks,
    Sridhar

  2. gopalshenoy says:

    Hi Sridhar,

    Thanks for the response. But on one hand you are saying that you are winning your fair share of bake offs against MS, Salesforce.com within a given silo and on the other hand you are saying that your differentiation is the integration across the product suites and this will be the next wave.

    But, you cannot expect me as a business customer to drop all of my current applications and switch to Zoho even if Zoho has great integration across its products, correct? I have very good integration across the products in MS Office (yes, they don’t have an online version and that will be their Achilles heel), I am very happy with Salesforce.com – so isn’t it better for you to integrate say your office suite with Salesforce.com and ride on their coat tails to their 40,000+ customer base or integrate your online CRM with Google apps or MS for that matter?

    Why would you not want to integrate any of your apps with Intuit’s Quicken or Quickbase since they are the market leaders when it comes to small business financial/database packages? Why would you want to go on your own and take all these behemoths head on by declaring war against all of them all at the same time – fighting one goliath is tough enough for the new kid on the block.

    I am not arguing that your business model may be wrong, but I as a potential prospect don’t get it. What I cannot figure out is the beach head you are trying to establish?

    Gopal

  3. Raj says:

    Hi Sridhar, Gopal:

    Very interesting discussion!

    I agree with Gopal’s take on focus, in general. Your examples of Microsoft, Google, et al is very well taken.

    That said, in the excellent book “Built to Last” – the authors give example of very successful companies that did a lot of things when they were starting out. I think some examples are HP, Sony, …

    So I think there is a case to be made for Sridhar and Zoho as well. 🙂 I wish the very best to them.

    Cheers,
    Raj
    Accompa – Affordable Requirements Management Tool for Product Managers

  4. Pingback: Zoho’s end game « Business Savvy Software

  5. Gopal,
    We actually integrate with Google well (single sign-on integration, for example), and will do a lot more of it in future. We provide Outlook integration in Zoho CRM. It is not our choice not to integrate with Salesforce. It is their closed system and closed philosophy, intended to maintain their inflated prices. As a Salesforce customer, you should know that it is their choice, not ours, not to allow you to use Zoho apps with Salesforce.

    I see no contradiction between best-of-breed competition, and integration. Just as you pointed out, no one is going to switch wholesale to Zoho. Our goal is to offer each customer *something* of value in Zoho, a beachhead from which we will grow. You are a happy Salseforce customer, but perhaps you may want to check out our Zoho Projects or Zoho Meeting – as an example.

    Sridhar

  6. Mandar says:

    I am with Sridhar. When I was kid I was taught that you should never put all your eggs in a single basket. We all agree that it is a wise old proverb. I think Zoho is doing the same. We have all but you can pick and select what you like. That’s their strategy. This has an another advantage. If they build something interesting for underlying stacks, then the same thing can be leveraged to improve all products at once.

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