Zoho One adds AI, search, analytics, in pitch to midmarket

There's a growing realization in the business software world that customers are looking for integrated platforms that allow them to join up data and processes across their organization. Enterprise application vendors are rearchitecting to ensure they can deliver this end-to-end automation and intelligence, while many larger organizations are building up their own connected applications infrastructure. For midmarket and small businesses, the options are more limited, but this week Zoho demonstrated what can be done with a unified business platform, adding an intelligent assistant, smart search and cross-functional analytics across its Zoho One suite.

The new functionality is typical of what we're seeing larger vendors bringing to enterprise application suites as part of a converged platform strategy. They're recognizing the additional value they can deliver by layering intelligence, analytics and other capabilities across a harmonized data landscape. It's interesting to see Zoho doing the same in a midmarket and small business product, which it introduced a year ago by packaging up its portfolio of 35+ separate applications as Zoho One, priced at $1 per user per day on an annual subscription. Here are some details of the three new capabilities.

AI, search, analytics

Zia is an AI-powered assistant that was initially introduced two years ago as part of Zoho CRM. It's now being made available across every Zoho One application and has some sophisticated smarts underlying it which allows it to pull together data from different sources to answer user's questions.

For example, Zoho showed us a dialog in which a user asks, "How many visitors are on the pricing page of my website?" The answer not only reports the number of visitors but also breaks out how many are existing customers and which have subscriptions up for renewal. Other sample dialogs reported revenue per employee or which customers in the sales pipeline have open support tickets. Zia works with either chat or voice and Zoho provides a developer tool for creating Zia skills.

The new search tool also has intelligence built in, using a relationship graph to provide more relevant results. For example, a search for a person's name will surface the closest match based on the user's recent interactions and role. It also respects authorization and access rules, so won't show results that the user isn't allowed to view. Results are formatted appropriately for their content and with relevant actions embedded — for example, results can include charts, message threads or emails, and actions such as replying to an email can be performed from the results pane.

A new analytics tab completes the line-up of new features in Zoho One. This can access any of hundreds of pre-built reports and dashboards in the various Zoho applications, along with pre-built and custom reports and dashboards that blend data from multiple applications for cross-functional analytics. There are also pre-built integrations to third-party applications such as Salesforce and Quickbooks, allowing data to be imported for inclusion in the analysis.

Cross-functional capabilities

These new features add to existing cross-functional capabilities that have been in the package from the start, including low-code tools for building workflow automation and custom applications. Zoho is keen to encourage customers to connect up processes and data across applications. The vendor offers free assistance from a 'concierge' support team to help Zoho One customers find solutions to issues.

This easy adaptability to custom needs has long been part of Zoho's appeal in the volume business market, where applications often leave frustrating gaps in functionality. The Zoho One package builds on this foundation, and has proven an instant hit with Zoho's customer base, reaching 12,000 customers in its first year, ranging in size from solopreneurs to midmarket businesses with up to 20,000 users. The fixed price of $1 per day per employee is especially attractive in a microbusiness, while for larger businesses, some existing customers of its CRM Plus package have found they can pay less by switching to Zoho One.

Zoho says it doesn't discount Zoho One, whatever the size of business, which implies the larger contracts run well into seven figures. That brings Zoho into a competitive space where it hasn't previously been thought of as a contender. Chief Evangelist Raju Vegesna says Zoho sees itself competing with Microsoft as an integrated platform, while Salesforce has always been in its sights for CRM, and in financials it's NetSuite and similar vendors. But success depends on a platform strategy, he believes:

Across the board, Microsoft gets it and they're aggressively bundling various things.

Vendors offering individual applications really have to be consolidated. Who are the ones who can consolidate and have the broadest portfolio?

This week sees Zoho expanding its portfolio even further with the launch of Backstage, an event management application that complements the existing sales and marketing product set. A lot of the functionality repurposes existing Zoho capabilities, such as a multi-language website builder, agenda planner, an attendee mobile app, sponsor management and detailed analytics. It's an illustration of how Zoho is able to build on its prior investment, says Vegesna:

We have a lot of these pieces. Increasingly that is what is becoming the advantage of Zoho. All the investments we have made in the last decade or two are now coming to help us.

One area where Zoho is still in catch-up mode is mobile, but it has a mobile version of Zoho One coming soon, and is also introducing mobile management capabilities.

Midmarket expansion plans

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.

Zoho isn't interested in building up a big enterprise sales team — its founder and CEO Sridhar Vembu in the past has criticized Salesforce in particular for this approach. However one angle that may give Zoho an in is that its sister company, ManagedEngine, already has 180,000 customers and an established relationship with enterprise IT departments. Vegesna says that the company has started reaching out through that channel to strike up conversations about Zoho One.

Zoho also works well with its own partner channel, another important factor in reaching the midmarket. The final element in its outreach strategy is a roadshow that will be taking Zoho One out to 300 cities around the world. Building that offline community is as important as providing online help and education, says Vegesna.

My take

Zoho is unlike other cloud software vendors in that it's what Brian Sommer once described as a consummate bootstrapper. That means that, unless you've used the product, you're probably unaware of the company. And even if you have heard of Zoho, you may still think of it as a small business vendor rather than a potential midmarket heavyweight.

But this is a company that has been patiently building out its capabilities and has now reached quite a surprising level of maturity. I was particularly struck, as I've indicated above, by how its approach to adding intelligence and analytics is reminiscent of what the top-tier enterprise application vendors are doing, both in its scope and its sophistication.

We'll be keeping an eye and hope to get an opportunity to speak to one or two customers about their use of the product in future stories. Watch this space.