Salesforce/Google Deal Won't Hit Suite Spot, Doesn't Worry Rivals Like Zoho

Ann All

Nothing like a little vendor smack talk to liven up what would otherwise be a somewhat routine product announcement.


There are plenty of features in Zoho's new CRM Enterprise Edition that will likely interest mid-sized and larger companies, especially the role-based security that will allow administrators to quickly manage user access. In the example offered in this NewsFactor Network story, an admin might want to allow a sales manager to access data from all of a company's sales representatives, while reps wouldn't be able to access each other's data.


The CRM update is the latest in a series of back-end applications that Zoho has rolled out over the past few months, including Web conferencing, product management, database management and HR services, leading InfoWorld blogger Ephraim Schwartz to comment that "cloud computing is finally moving to a more integrated approach." As I blogged last month, Schwartz and other industry observers have been impressed by Zoho's apparent long-term vision of offering a complete set of pre-integrated online applications.


This strategy differs dramatically from the platform-as-a-service approach advocated by, essentially creating a development ecosystem and then opening it up and allowing third parties to do all of the development heavy lifting. Lots of companies appear to be rushing into that space, as I blogged earlier this week. Dennis Howlett writes on ZDNet:

[Zoho] has a "we build it all" mentality rather than the platform thinking that Salesforce. com espouses. This has meant that its 200+ developers are beavering away on different parts of the overall suite of applications rather than being focused on any particular module. This has allowed Zoho to come into the market with a steady stream offerings and not be dependent on partners to provide functionality. This should mean clean integrations between CRM and other applications.

While the platform-as-a-service approach promises to offer companies a nearly limitless choice of applications from which to pick and choose, I suspect that many companies may be intimidated rather than thrilled by the bounty.


Make no mistake, Zoho is gunning for Salesforce, which earlier this week announced that it was integrating Google Apps into its CRM applications, heating up the rumors of a Google acquisition of Salesforce. Yet the two companies appear to culturally have little in common, if the aforementioned trash talk is to be believed.


As detailed in an eWEEK interview with (pretentious job title alert) Zoho Evangelist Raju Vegesna, Salesforce tried to buy Zoho. But Zoho declined because it had issues with the SaaS darling's corporate culture. As Vegesna describes it, Salesforce sounds a lot like one of the traditional software companies upon which CEO Marc Benioff likes to heap his scorn. For instance, it allegedly spends eight times more on marketing than it does on R&D.


So it now looks as if Salesforce is staking out an uncomfortable middle ground -- right between software giants, like Microsoft, that can afford to wait for the market to shake out as they develop their still-fuzzy software-as-a-service/cloud computing strategies, and scrappy contenders, like Zoho and InfoStreet, which offer more-or-less complete suites of online apps at prices far lower than Salesforce.

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