Welcome to Zoho

Today we introduce Zoho as a new diginomica partner. This is a company we've been tracking for some time, and it now joins our partner line-up as part of its growing outreach to midmarket and larger companies. Zoho's partner posts, the first of which is published today, will reflect its distinctive take on the business software industry — this is a company that's proud to challenge the conventional wisdom of the software establishment.

Zoho is best known for its cloud-based productivity and CRM software, which is popular among SMBs both in the US market and elsewhere. Its portfolio of products, all built on a single platform, has gradually expanded to more than 40 individual applications covering everything from accounting and inventory management to events management, and became available last year as a single bundle called Zoho One. As we observed a few months ago, the breadth of functionality available within a single platform means that Zoho now believes it can target larger prospects:

Zoho is now pondering how to expand its presence in the midmarket and enterprise sectors. The company is emboldened by its ability to sign up customers such as the 20,000-user IIFL, an Indian financial services company, or 15,000-user The Warehouse Group, New Zealand’s largest retail group. There’s a significant footprint in North America too, which accounts for 40% of Zoho One customers, including resin manufacturer Purolite and solar power installer Apex Solar. But it’s a different type of sale from the small business market, admits Vegesna:

"For something like Zoho One, the midmarket is a great market, so we’re focusing on that.

"For small business, it’s a no-brainer.

"For enterprises, selling Zoho One directly is tough. But we see it as a phased sale. Larger customers start with one or two apps — we’re seeing Zoho One as an upgrade play for larger enterprises."

This may sound ambitious, but Zoho has never lacked ambition, and has often positioned itself as a competitive threat to CRM giant Salesforce. One characteristic that it sees as a huge strength against better-known rivals is that it has built its business organically, through word-of-mouth and carefully targeted advertising, rather than expensive branding and sales teams.

While the privately-held company doesn't disclose its revenues, it has grown to more than 35 million users and a global workforce of more than 5,000 employees. That's quite a performance without having taken any outside capital, apart from funding provided by the founders' two earlier successful software businesses. As software industry analyst and diginomica contributor Brian Sommer once put it, Zoho is the consummate bootstrapper.

This background perhaps means that Zoho's management has more in common with the leaders of typical midmarket businesses than the average software industry executive. When I met with a cross-section of customers recently, one element that stood out from their stories was a shared need for agility and speed, which they all felt Zoho provides.

Certainly, Zoho has a refreshing take on many issues, such as talent — it prefers to train its own talent, including recruits straght out of high school — software pricing, growth finance, and indeed the subject of its first post, how risk impacts business software value. We look forward to hearing more of its views — and more from customers too — over the coming year.