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Where to next for Zoho?

Following the launch of Zoho People, Larry Dignan speculates that Google should buy the company. Huh?
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Written by Dennis Howlett, Contributor on

Following the launch of Zoho People, Larry Dignan speculates that Google should buy the company. Huh? Not much chance of that while Google is busy launching applications of its own - even if they are incomplete. And if I was in Zoho's shoes there's no way I'd sell until I'd ironed out a couple more things. So what next for Zoho?

The current Zoho suite has three glaring omissions: accounting, integration and workflow. Zoho has attacked the 'office' suite issue in an unusual manner by coming at it from the office productivity perspective and then adding in business applications. In theory it's a compelling proposition because in Zoho, we have the first company that's really got a grip on business productivity across multiple disciplines. But that is not enough to persuade potential customers to move everything to Zoho. The fact it is pitching People at 50-200 person businesses is telling. This is directly in line with the space that Workday and SAP have identified as poorly served. This is also the segment that needs solid accounting, something with which advisor Zoli Erdos agrees. Without this component, Zoho won't get a sniff. But it has to do more.

While the entire package looks compelling, there are holes left and right. There is very limited integration between the suite of applications and again, that needs addressing if they are to truly grab a decent slice of the corporate action. SAP and Microsoft has been selling Duet, where activities inside the SAP suite are surfaced, usually via the Outlook interface. Tying together actions between CRM, People and accounting is not just logical but desirable. The same goes for ties between CRM, People and Zoho Wiki.

Vinnie Mirchandani talks about Zoho as a LEAP provider. He is right to the extent they have fast tracked development of a smorgasbord of applications in less than a couple of years and shown that you don't need billions of dollars in development resource to create credible applications with just enough functionality to at least tempt the market. But as I am increasingly seeing, companies of the kind Zoho is curretnly targeting are looking for more than applications delivered in a fresh manner at a compelling price. Integration will provide that extra touch.

Others will say that Microsoft has done precious little in this regard and therefore why should Zoho bust a gut against the 95% market leader? Disruptive entrants can only make an impact when they do something that's fundamentally different to the incumbent players and sufficiently attractive to entice people away. Workflow - however simple - would be seriously compelling because then business could think in terms of modest customization to suit their needs. Workflow and 'proper' integration fulfill that need and with 20 apps now in various stages of 'beta' that becomes an ever more pressing requirement.

Zoli also notes that in upping its business apps game, Zoho requires a different sales approach, one that adds 'fat' to the final price. In truth, none of us has any idea whether that's true or not. The perceived wisdom and 30 years of selling into the enterprise says that's the case but it doesn't have to be that way as Salesforce.com has proven. But then we don't have active alternative models for an on-demand business suite against which to assess which go to market strategy will work.

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