How Zoho Intends to Upend

Michael Vizard

Although Zoho doesn't get as much attention as Google or Microsoft when it comes to applications in the cloud, the company has been steadily building a following among small to midsize businesses.

Most of that effort has been focused on productivity applications that compete with Microsoft Office, but the company has extended its portfolio of business applications. Most recently, the company added a customer relationship management (CRM) offering aimed squarely at

According to Zoho evangelist Raju Vegesna, the Zoho strategy is pretty straightforward. charges customers a significant premium to use its applications. Zoho has free editions for up to three users, a professional edition that costs $12 a month, and an enterprise version that costs $25 a month.



Vegesna contends that most customers are SMBs, companies can't really afford's rates. That means SMBs pay for an expensive sales team that spends most of its time trying to woo enterprise customers, he said.

Zoho, meanwhile, can charge so little for its applications because it has no sales force to support. Zoho, says Vegesna, then passes those savings on to customers that tend to "virally" discover it.

Zoho's business-applications ambitions don't stop with CRM. The company has e-mail, project management, human resources and other collaboration applications alongside a full suite of productivity applications all sold under a low-cost software-as-a-service (SaaS) model. One of things that differentiates Zoho from Microsoft and Google, says Vegesna, is that customers can find all the business applications they need from a single service.

Obviously, Microsoft, Google and intend to outspend Zoho on marketing. But Vegesna says Zoho is confident that with more than 3 million worldwide users, Zoho will be a major force in the cloud.

Add Comment      Leave a comment on this blog post
Sep 23, 2010 5:17 AM Ryk Ryk  says: had dedicated teams for the SMB market and separate teams for the enterprise. I would be surprised if businesses of any size would chose  an application that doesn't even have a team supporting them.

Sep 24, 2010 10:25 AM Sridhar Vembu Sridhar Vembu  says: in response to Ryk

Yes, we do have a really good supporting team. I have explained before that Salesforce spends 7x on sales and marketing as on R&D. That was exactly what Raju was saying here - we tend to spend less on marketing to customers, and more on actually serving them.


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