I recently had the honor of attending the Zoho Analyst Summit along with 64 other analysts and influencers. Aside from being a great event and beautifully run by the Zoho management team, it sparked a significant outpouring of analyst posts and articles on Zoho's perspective and roadmaps. I didn't write one myself. I had the Watchlist in the way that pretty much singularly focused me but I have the further honor of presenting the post of someone who also attended: industry analyst, rock star influencer and I do mean a rock star -- and great friend of mine -- Brian Solis. To most of you, he's no stranger, having been a thought leader in the field. He started out by transforming the PR industry, being the pioneer who brought social to PR -- among his many other innovations -- and now is one of the best-known minds in the digital world. So, without any more of my obvious admiration, here's Brian's take on Zoho.
Take it away Brian.
The worlds of CRM and ERP are undergoing yet another renaissance. Following the ongoing cloud (r)evolution, AI, voice, UX/UI and macro trends such as digital transformation and the rise of the cognitive enterprise are inspiring waves of great innovation from industry leading and up-and-coming technology vendors alike. But there's one unique vendor that's also going through a renaissance of its own while also pushing the market forward in its own way.
Recently, I joined over 80 industry analysts in Austin to meet with Zoho executives as part of Zoho Day, its annual analyst summit. Zoho is a cloud software company offering an incredibly rich, friendly and affordable suite of artisan cloud applications that power small-to-enterprise businesses. It's also one of the most unique companies I've ever had the joy to follow. It was founded in 1996, and I first met the team during the "Office 2.0" days of the early 2000s in San Francisco.
For many years, Zoho has been a company that the industry has rooted for, but not necessarily recognized it as the most innovative or dominant brands driving the direction of software markets. Industry giants such as Salesforce, Oracle, Microsoft, and SAP have been highly competitive in sales and marketing, publicly innovative, and ambitious in their acquisition and partnership strategies to build capabilities and drive growth. Zoho, on the other hand, has quietly, but diligently, focused on internal innovation, community building, and customer satisfaction. The company has famously stated, "We invest more in product development and customer support than in sales and marketing. It always struck us as paradoxical to charge the customer extra for the privilege of marketing back to them."
Even after following the company for so long, I forget that Zoho has been around for 24 years and was "bootstrapped" without ever taking outside investment or capital. The company is beholden only to its customers, employees and partners and not shareholders, boards and those who prioritize returns and dividends over innovation, usability, experiences and customer success. While it may seem as a counterintuitive approach to success, the results are clear.
Zoho is a global company with a portfolio of over 45 applications, 50 million+ SMB and SME users, and a workforce of over 8,000 employees around the world. The company has seen 30% compound annual growth rate (CAGR) over the last five years.
And still, the Zoho I was reintroduced to in Austin made it clear. The company is making bold moves all in the name of users and its customers. The question is, where does it want to go and grow?
Zoho User-Centricity: A Purpose-Built Full Stack Provider
At a time when cloud software is coming increasingly commoditized, the platform has to become a key differentiator and continue to do so as part of its business model. Zoho is clearly investing here. Like Salesforce's Mark Benioff, Zoho CEO and co-founder Sridhar Vembu, is also purpose driven, leading not only through technology innovation, but also through philanthropy and building an organization founded on human-centered principles and values. For example, the company invests in people and their professional development through Zoho University, where students do not pay fees, and instead earn a stipend while they learn. Zoho proudly shares that 15% of its workforce does not have a traditional college degree. Additionally, the company expands by building offices outside of big cities, helping employees enjoy a more affordable lifestyle while growing local economies.
This human-centered approach is clear in its software and platform development as well. The user experience is paramount. And by experience, I mean the emotional and intellectual connection between customers and brand and applications and productivity, and growth and success. If master chefs can add a little love to their recipes, cooking, plating, course design, and dining experiences, Zoho applies the same formula for software development, customer experience, employees experience, and also Zoho's local economies around the world.
To say it's a company rich with personality, values, and purpose would be an understatement. It's also rich in true customer and employee-centeredness wrapped in technical artistry.
"When you choose Zoho, you get more than just a single product or a tightly integrated suite. You get our commitment to continuous refinement and to improving your experience. And you get our relentless devotion to your satisfaction."
What also sets Zoho apart from competitors is that the company owns (read, built) its full stack and is constantly improving every facet of it. It's purpose-built with every layer intently interconnected and thus, it can control performance and optimize connectivity and scale. Competitors tend to build out stacks based on partnerships and acquisitions. The pro is that companies can gain access to best-in-class technologies and talent, greater market share, and project an aura of growth and innovation to the market. The cons can be complexity in native experiences, integration and maintenance, gaps in capabilities, and higher costs.
To Zoho, this is how to deliver a seamless and end-to-end user experience (UX). Zoho is as much a cloud software company as it is a technology company. All software is homegrown, developed internally at the company's headquarters in India. Zoho also owns its data centers powered by its own solar farms. Networking is facilitated through domestic and international carriers as part of the company's Zoho PhoneBridge. The company built its own computer telephone integration (CTI) with a bridge to 80 telecom operators in the Services layer.
Aside from competing against traditional and up-and-coming CRM and ERP vendors, Zoho's app services, data centers and proprietary layers of its full stack position the company against the likes of Microsoft, Google, IBM and Oracle. And, since Zoho's full stack includes Zoho-owned hardware and data centers, it indirectly (and directly) competes against Amazon, AWS, Azure, and Google. You better be good, safe, reliable, and cost-effective to compete at this level. As you start to cast a wider market net and move upstream, you need a performance and trustworthy technology infrastructure to support hyperscale and integration and also the leadership, expertise, and talent to manage the digital transformation of your customer's businesses.
ZohoOne: The Operating System for Business
Operating systems are extending from computers and mobile devices to the enterprise as cloud software starts to break down operational silos. For example, Aera Technology recently launched its Aera OS as a cognitive automation platform to enable what it calls the "self-driving enterprise." Zoho too is introducing its "business operating system" with ZohoOne, a platform of over 45 purpose-built, integrated apps and services that the company says can fully power any business while delivering unified user and customer experiences. The company shared that the average ZohoOne powered organization currently runs an average of 19 Zoho apps across the enterprise.
This move goes beyond cloud-based software suites. Zoho is placing a stake in the ground that it is joining the ranks as a global XaaS provider while architecting and owning the entire ecosystem.
ZohoOne was created with connectedness and scale in mind, aiming to replace the disparate patchwork of cloud applications, legacy tools and processes with one cloud-based system.
No matter what platform or apps you use today, Zoho literally has a product suite across the spectrum of sales, marketing, support, HR, finance, and operations. More so, every layer and every app is designed to work seamlessly as part of a holistic system, including a unified data model, scalable and integrated databases and a custom development platform.
The concept of a business OS is particularly compelling when it comes to delivering connected, seamless, and more intuitive user and customer experiences -- Zoho customers (users) and their ultimate customers (consumers).
As CRM systems become increasingly intelligent and connected, businesses are aiming to get closer to their customer truths and a shared, cross-functional ability to deliver more relevant and personalized experiences. To do so, systems and data must be unified, connected, and optimized. By having a unified data model connected to all systems, companies get closer to a true 360 customer view. Beyond Zoho's OS, the rest lies in how organizations then mobilize around customers (placing them at the center of the business).
Zoho's position is that to serve as a proper OS, you need to own the stack or at least ensure open and intuitive integration across existing stacks. To serve as a scalable partner, you also have to build apps that are better and more integrated than what organizations are using or building today, offer irresistible pricing, and own a reputation for protecting that pricing, while also providing a platform that allows for full app customization on the customer side.
Not every customer has the same out-of-the-box needs, but they do all share animosity toward price creep. And unfortunately, that's a common business practice in enterprise software.
Additionally, and perhaps most importantly, to become an operating system for any business, you need trust; trust in the platform and trust in the team that built and supports it. This is, after all, still a relationship business.
As Zoho moves upstream and also becomes the hub of any sized organization, the company will have to continually invest in building trust and managing relationships, especially (and uniquely) designed for SME and enterprise customers.
Zia: Zoho's Custom-Built Artificial Intelligence
If you're going to build your own stack, how far down the rabbit hole do you go? As we shift into a post digital transformation era of enterprise evolution,(AI), and eventually cognitive automation become imperatives.
When I say AI, I don't just mean chatbots, voice, conversational AI, or robotic process automation (RPA). I mean intelligent augmentation and automation connected to all fundamental business applications and operational processes.
Several companies are already making huge investments here and are highly recognized for it. Salesforce with Einstein, IBM Watson, and Aera Technology's Aera (an impressive startup with $170 million funding to date) are pioneering the future of enterprise operations, and are setting intelligent operational standards right now.
On day two of the analyst summit, we were introduced to the breadth and depth of Zoho's AI, representing over 10 years of inhouse development across an impressive array of capabilities in all of its enterprise apps. Like Einstein, Watson, and Aera, Zoho developed a front-end AI assistant named Zia, which stands for Zoho Intelligent Assistant. Think of Zia as the UI to a rich set of intelligent capabilities, not unlike Amazon's Alexa. But more so, Zia delivers benefits to enterprise users and ultimate customers using Zoho-powered platforms. And also like Alexa, developers can build skills that teach Zia advanced abilities and also to integrate with third-party software. Additionally, the company has built development platforms that cater to the no code, low code and pro code markets. This means that it can attract a greater set of developers at varying levels with each, solving for different and unique capabilities and needs.
Part of this approach is to fortify its full-stack, OS model. The other part, I learned, was something more profound…protecting the privacy of business customers and their customers.
With an expected 50+ Zoho apps available on the platform, Zia becomes instrumental in connecting the dots between employees, data and business systems.
Zia doesn't just facilitate search; it introduces conversational AI into the workflow. Much like Salesforce demonstrated on the main stage at Dreamforce 2019 with "Hey Einstein," Zia combines natural language processing (NLP), understanding, analytics, forecasting, and reporting to simplify complex processes, connect users to instant insights, and help executives make more informed decisions in real-time. Zia not only connects information across its ecosystem, but also integrates third-party apps in the Zoho Marketplace and the World Wide Web to augment queries, results, and cognizance.
To Zoho Privacy Matters Across the Ecosystem
All relationships are built on trust. As such, I would be remiss if I didn't talk about Zoho's bold move toward user privacy.
Hosting an analyst event can be a tough job. This is an audience that is not only ridiculously smart and experienced, but every person there is responsible for shaping markets. Zoho's stance on privacy however, drew applause and ignited deep, thoughtful conversations.
For starters, Zoho doesn't allow any third-party cookies on its site, knowing that it'll lose invaluable Google Analytics data. Furthermore, Zoho's investment in AI development was done in the name of protecting privacy as well. It ensures that no data ever leaves its private data centers. And, speaking of data centers, everything is hosted with Zoho to prevent having to comply with Terms of Service (ToS) of outside hyperscalers and partners. As a result, Zoho is thwarting what it calls "adjunct surveillance," which stops the trading of customer data with the likes of Google, Twitter and Facebook as an external market and revenue source.
Raju Vegesna, Chief Evangelist at Zoho recently shared at Diginomica, "Heavyweight tech corporations are turning into surveillance companies, tracking the behavior of businesses and users — who have become heavily reliant on their ubiquitous services and platforms. By championing advertising-first business models, Big Tech is knowingly putting user and business data at risk. The result has been a series of data leaks as well as consumer privacy breaches."
Does this inhibit growth? Yep.
Does this build a unique form of trust amongst users? Yes indeed. That's the goal anyway.
As Sridhar said at a Zoholics event in 2019, "we're proud to leave money on the table."
After all, if a company can't live its values, how can it expect customers to trust and believe in the company's vision and mission?
With Zoho, trust is paramount. It's a competitive advantage, beyond price, against marketing and technology savvy competitors that are largely recognized for driving market trends and dictating technological standards.
So, what's next?
With all of the wonderful announcements and insights that were shared at the event, the company still has work to do, beyond tech, to not only grow, but also mature.
Even though the company has been around 24 years, even though the company is absolutely doing so many incredible things around the world, for employees, for customers, for local economies, and for the planet, and even though the company's stack and app ecosystem are industry-leading and cost-compelling, Zoho's competing against players that are also pushing the industry forward. Truth is, they are much better at sales and marketing too. They're steering the industry narrative.
To grow and deliver its vision and mission to a much broader userbase, it's time for Zoho to adopt a new marketing philosophy. Ironically, as I was writing this, I saw a Zoho commercial on TV during a basketball game. So maybe that makes my last statement already moot. But honestly, there's much work to do. Just visit the company's website, follow its market-facing industry perspectives, read the company's collateral, and compare it against savvy and ambitious competitors. Try to make an decision in the best interests of your company, regardless of size, based on what you see on your own. Zoho can be louder, more vocal in its vision and mission, and bolder in its thought leadership.
As Zoho goes upstream, the current go-to-market approach won't scale, even though the technology will. Zoho needs an enterprise POV (and perhaps, a dedicated brand and brand experience). It could greatly benefit from introducing a dedicated enterprise customer journey, touchpoints, and relationship model.
Money aside, companies of all sizes, could benefit from the company's platform. It just isn't 100% clear that it can address the needs of more demanding, complex customers. Those customers are in the throes of digital transformation. They need help. They're overwhelmed with companies vying for their attention and business.
I'll tell you this, if Zoho wants to do it, I know it can do it. I'm rooting for it.
After spending one-on-one time with Sridhar Vembu and Vegesna, one thing I can whole-heartedly support is the company's prioritization of philosophy in the C-Suite. It's not always about technology. It's about partnership.
Right before leaving Austin to return to San Francisco, Vegesna shared that Zoho constantly asks itself, "what is the purpose of what we do?" They made it clear that in every decision they make, it's about doing the right thing with a long-term mindset.
In closing, Vegesna told me that Zoho sits at the intersection of philosophy, economics, and technology. The company is already making positive impacts in business, with employees and local economies, and also on the planet. I added that perhaps the company should add sociology to its crossing. He agreed.
I'm excited to see what's next.