CRM Companies 2009: Zoho

Zoho - I’ve been a long standing fan of Zoho and saw their potential back in 2006 when they were first coming on the market. Before I get into them a little, I need to myth bust. They are viewed constantly as this startup making good. In truth, they are part of Adventnet, a nothing-like-a-startup and there are 600 engineers devoted to Adventnet products. This is a highly skilled company with a smart contemporary culture and a transparent, honest and responsive CEO, Sridhar Vembu, who, while I have some disagreements with when it comes to his public pronouncements, is, all in all, a refreshing change in his willingness to be actually accessible beyond a press conference or formal call and genuinely transparent regardless of the heat it might generate. Zoho has always provided a widespread and nearly complete collaboration suite. Originally consumer-strength and mostly free of charge, at the end of 2007, they announced their first “Business Edition” applications. They are web-based, not on demand per se, though they have a subscription model. Germane to us in these here parts, they have a CRM application - in reality, a sales force automation application. I have to tell you, it is functionally pretty solid. Its weakness, as with most Zoho collaboration and operational tools also, is that they don’t integrate that well with each other or with any other applications. The lack of integration issue seems to have been an issue that I fanned the flames of - though actually that isn’t entirely true. It was actually re-ignited by a comment from a reader of my blog Phil Hodgin in the above linked blog entry of mine - though I agree with him wholeheartedly. In any case, their lack of integration is addressed by Sridhar in this Zoho blog entry if you want to read about it. Shortly after the not-very-controversial controversy, Zoho announced Zoho CloudSQL, a first step really. It is middleware for developers that allows the use of SQL to access Zoho data in the cloud and is compatible with MySQL and Oracle’s, IBM’s and Informix’ flavors of SQL. A start at least. They have a staggering array of applications - enough to take up several more “pages” of a blog entry like this. What is important is that they get the social customer’s thinking and are geared to a future of “social customer behavior. Their combination of collaboration tools and operational applications is broad enough and now functionally deep enough and organized enough (See Zoho Creator and Zoho Notebook), lack of thorough integration notwithstanding, to provide a genuinely useful set of apps that small and midsized businesses can understand. While they are an astonishing open company and an honest one, they are not the greatest marketers on the planet and that is painful because they are up against the best in the software world in some cases. Beyond Sridhar, they don’t have a lot of traction when it comes to thought leadership and they need to invest in doing that or they will lose some ground. That said, they’ve graduated from the new kid on the block to the young adult making their way in the world successfully early on. They are currently an SMB player, to be sure; not an enterprise threat, but I wouldn’t put that past them someday.

Source:blogs.zdnet.com/crm

Salesforce.com Deals with Google After Failing to Land Zoho

Zoho's product evangelist discusses the deal that never went down, dishing about Salesforce.com's corporate practices.Vegesna said Salesforce.com is spending too much on marketing and not enough on R&D.

Salesforce.com's fortified integration with Google could bolster both companies' strategies to tackle Microsoft in the applications market.

But the deal might not have happened if Salesforce.com acquired Zoho two years ago. That's what Zoho Evangelist Raju Vegesna told eWEEK in a phone interview April 14 following the publication of a controversial blog post by Sridhar Vembu, CEO of Zoho parent company AdventNet.

Vegesna told eWEEK that as late as 2007, Salesforce.com and Zoho were in negotiations to be at least partners, if not to consummate an outright marriage.

The SAAS (software-as-a-service) business applications leader considered buying Zoho, Vegesna said, to leverage the company's collaboration software suite, which Zoho positions as an alternative to Google Apps and Microsoft's Office suite.

Such a deal appears to be all but dead now that Salesforce.com has proclaimed Google as its Apps platform of record.

Courtship Before Marriage

Salesforce.com declined to comment for this report, but Vegesna said Salesforce.com and Zoho began discussing a relationship, possibly even an acquisition in 2006.

However, Zoho's concern about Salesforce.com cost structure, which according to these estimates includes spending eight times more on marketing than research and development, prompted Zoho to offer to partner first.

"Let's date first before we get married," Vegesna said he recalled thinking. "We thought we'd experiment as an AppExchange partner, and if it goes well, maybe we'll take it up to the next step."

Zoho, one of the first Salesforce.com customers back in 1999 before it started using and selling its own Zoho CRM product, worked to integrate with Salesforce.com AppExchange in 2007.

But Salesforce.com pulled the plug a few days before it could go live, telling Zoho it could not work with AppExchange any longer because it had a competing product in Zoho CRM.

Later in 2007, Vegesna said Salesforce.com and Zoho rekindled conversations, discussing a possible acquisition. Financials were not discussed, and the talks didn't go well.

A deal was long dead even before April 14's Google-Salesforce.com bond, according to Vegesna, who echoed Vembu's blog when he said the company's corporate cultures were at odds.

"Hiring lots of salespeople is not good for a company," he said. "They cannot deliver affordable software." But part of the disparity, he admitted, is that Zoho prefers to remain private.

While Vegesna said Zoho operates under the "never say never" clause that most companies take, he agreed Salesforce.com is probably not going to come knocking again anytime soon.

He also questioned whether or not Salesforce.com and Google would be able to work together because Salesforce.com focuses on the enterprise while Google is pretty open to work with anyone. Some analysts agree.

IDC analyst Rachel Happe said Salesforce.com is serving some big accounts and needs the service-level agreements required by larger businesses, while Google targets businesses that want to pay little or nothing.

"That difference will likely cause tension in the relationship, but it will also likely grow over time," Happe told eWEEK April 14. "In the short term it gives Salesforce some publicity and a product extension, and it gives Google a go-to-market channel for its Apps product."

Gartner analyst Tom Austin told eWEEK April 14 the Salesforce.com-Google deal is designed to generate more press for cloud computing in the hope that it will generate longer-term dividends for Salesforce.com.

What those benefits are, he added, is unclear.

Source:eweek.com