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Zoholics - the last stop, but plenty of announcements

Brian Sommer Profile picture for user brianssommer May 15, 2023
Summary:
Zoho had a ton of product direction announcements that spoke to bringing all products up to the same level of business complexity, adding a solo entrepreneur set of modules, and, of course, a number of thoughts on AI. Here are the highlights.

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SMB ERP player Zoho (most famous for its CRM functionality) held a number of regional Zoholics user conferences recently - diginomica’s Jon Reed caught one of these shows and wrote extensively on Zoho’s AI ambitions in this piece. The last Zoholics, in Austin, Texas, came with a number of announcements. 

Here’s a recap of the newsworthy bits:

Upmarket moves

Analysts got a directional update concerning Zoho’s applications. The company is now readying all of its applications to have a more robust, detailed level of maturity and functionality so that they can serve larger and more complex organizations. 

Specifically, the upgraded modules will serve firms with a large number of employees. Essentially, this means the software will support companies with 500+ employees. Currently, one Zoho customer has over 20,000 employees. The company is not targeting Fortune 500 enterprises but is aiming for buyers who have a measure of business complexity. Those customers just don’t want to deal with the hassles and expense of using one of the big ERP vendor solutions. Zoho executives indicated that a third of their business is coming from this type of customer today. 

Zoho discussed how their market recognition and awareness with this target market is still not where they’d like it to be; however, their sales are still soaring even with this. 

The initial offerings for this upmarket solution will include Zoho’s Creator, CRM, Customer Support and Analytics products.

Other details (e.g., product roadmaps) about this were not provided. No price increase for this added capability was indicated. 

Solo business support 

On the other end of the target market spectrum, analysts did get more details about a number of new business startup capabilities that Zoho is developing. These are being branded under the Solo name. According to Zoho “Solo is a recipe created with ingredients from the Zoho platform”. 

Zoho is adding essential capabilities for new entrepreneurs. These kickstarter applications will help solopreneurs (or “Zohopreneurs”) get incorporated (via Zoho Start), create a website (via Zoho Domains), have telephone capabilities (via Zoho Voice), put the company on various sites, manage reviews, analyze web traffic and more. Zoho Publish and Tables functionality also figures into these solopreneur solutions. Future capabilities may include credit card processing, merchant accounts, social media presence, commercial bank accounts and more. 

These ‘starter’ apps may get used once (e.g., to register the company with the local government) or repeatedly (e.g., to pay suppliers).  Zoho believes that there are approximately 1.6 billion solopreneurs globally (and about 70 million of these are in the U.S.). 

Zoho sees these apps at the intersection of where a freelancer becomes a small business. 

I suspect Zoho will need to add more to the product roadmap of these solopreneur solutions as I didn’t see anything for payroll, retirement savings, insurance and other very small business necessities. Certainly, some of Zoho’s partners can handle these for now. 

I do see the merit in these down-market apps. These solutions ‘bring order to chaos’ for budding entrepreneurs and should be low-cost offerings. They’ll also help firms as they grow by helping them upgrade to Zoho’s main offerings as they add employees, locations, etc.

ULAA

Zoho has built an internet browser: ULAA. ULAA utilizes some open source code (and add-ins) one might find in the Chrome browser except this browser doesn’t track where its users have been or sell that information to advertisers. This is consistent with past directives from Zoho that make customer security and privacy a top priority. 

Several analysts quizzed Zoho leaders about this development. Of particular concern was the thought that getting people to change Internet browsers may not be an insignificant effort. I believe there’s merit to this point especially if a customer is reliant on a lot web-based demand generation. This will undoubtedly take some persuasion on Zoho’s part to drive adoption of a new browser. 

I was also conflicted on this decision. I wondered how many investors or board members would support a similar capital expenditure for their software company? I suspect many would not invest in a browser and would let customers deal with the privacy complications on their own. Well, props to Zoho for making the tough call. 

Customers

Zoho fielded a customer panel. While these customers seemed to indicate that they were able to go live quickly, they did note that getting Sales personnel to use/adopt the CRM applications or getting users to reimagine and improve processes were indeed challenges. In fact, it sounded like getting any user to give up their spreadsheets was the toughest challenge of all. It’s interesting to see that change management challenges exist even in smaller firms!

Executive Q&A

 When we got to question Zoho’s executives we learned that they are noting a modest slowdown in growth globally (but one needs to understand how rapidly/aggressively Zoho has been growing in recent years to put this comment into perspective). 

While Zoho, the company, has a great ESG record of its own (e.g., rural school initiatives, programs to help the needy, etc.) there was no indication that Zoho is/will be developing any ESG applications in the short-term. 

Revenue Recognition, aka ASC606, functional support is being planned. That should get a big positive response from Zoho customers who sell combinations of products, services and/or warranties. 

AI 

Jon’s piece covered Zoho’s AI ambitions in detail. It is worth pointing out that Zoho, via its Zia technology, has been providing a number of ML enabled capabilities for some time. Zia is now available in English and Spanish. 

Zoho’s AI capabilities currently include:

  • Handwriting recognition 
  • Translation
  • Grammar correction
  • Trend detection
  • Anomalous behavior detection 
  • Phishing recognition
  • Malicious URL detection
  • Sentiment analysis
  • Seasonality detection 
  • Log analysis
  • Parsing
  • Forecasting
  • Data cleansing
  • Keyword extraction
  • Outage prediction
  • Face recognition
  • Product recommendation
  • Root cause analysis
  • OCR
  • And more

More AI capabilities are coming. (see slide below)

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We also saw some ways AI might get used today. These included:

  • Having Zia jumpstart the writing of content
  • Using Zia to improve the content you already created
  • Getting Zia to create drop-down/pick lists
  • Analyze data from public data sources
  • Assist users in creating complex SQL queries
  • Using AI to clean up/prep data

My take

AI, especially the newer Generative AI and LLM (Large Language Model) tools, are making every apps vendor question their products and future. Zoho, because of their considerable privacy concerns, will have more questions than most vendors. They’ll have a lot to ponder in the coming months and years.

Zoho’s up-market and down-market efforts may work. The down-market capabilities include a number of net-new apps/capabilities while the up-market functionality will likely get incorporated into the current Zoho apps. Zoho’s brand may get diluted if it gets known for being too much up- or down-market. How the company successfully deals with its branding and messaging will be interesting to watch.   

The Zoholics events were likely scheduled a long time ago and certainly before anyone knew how dramatically things would change re: ChatGPT, et.al. As a result, I’m sure Zoho executives would have liked more time to fully flesh out their response to this rapidly evolving technology space. So, if the information above wasn’t all a reader would want right now, I’m confident more information will be forthcoming. 

Until then…..

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