Vendor Spotlight: Zoho

Zoho Corporation is an Indian business that is at the forefront of software development on the subcontinent. India’s great economic expansion hopes are pinned on software services, cybersecurity, cloud systems, telco services, and AI; Zoho is involved in all of those fields.

As a national champion, Zoho gets a lot of respect in its home country. However, the company struggles to get noticed internationally, where US companies dominate the tech sector. The company has reached an annual turnover of $1 billion. However, that is dwarfed by Microsoft’s turnover of $245 billion in the last year and Google’s turnover of $305 billion. Can Zoho ever compete effectively on the world stage? Let’s take a look.

Zoho Corporation Founding and Background

Zoho Corporation was originally called AdventNet, Inc. That first incarnation was founded in March 1996 by Tony Thomas in the USA and Kumar and Sekar Vembu and Shailesh Kumar in India. Another Vembu brother, Sridhar Vembu provided coordination between the two locations on an informal basis.

From its inception, the company has had dual HQs – one is in Chennai, India, and at first, the other was in Edison, New Jersey. All the Vembu family supported the company’s creation through contributions of both effort and money. Tony Thomas’s elder brother, Joy, also provided an investment. Sridhar Vembu started working full-time for the company as its Sales Manager in 1997.

The core product for the business was an interpretation of the Simple Network Management Protocol (SNMP), which was written by Tony Thomas. During its early years, AdventNet gained traction by offering a variety of tools for network management and IT infrastructure, catering primarily to large enterprises and technology companies. However, as the internet began to transform business operations in the early 2000s, the company saw an opportunity to expand its offerings beyond network management.

In 2009, AdventNet Inc. rebranded itself as Zoho Corporation to reflect its broader focus on software as a service (SaaS) applications. The rebranding marked a significant shift towards cloud-based solutions, and the company introduced Zoho Office Suite, which included productivity tools like Zoho Writer, Zoho Sheet, and Zoho Show. These products were aimed at competing with established players like Microsoft Office and Google Workspace but with a focus on affordability and accessibility for small and medium-sized businesses (SMBs).

Zoho moved into AI early with the creation of its Zia AI Assistant that was one of the first virtual chat apps in the world. The company has since expanded its Zia project into a Generative AI service that is based on the OpenAI platform and integrates ChatGPT.

The company has two important divisions that operate separate brands. These are ManageEngine, which produces system monitoring and management tools, and Site24x7, a cloud platform of system monitoring services. ManageEngine was started up in 2003 and Site24x7 was split out from that brand in 2007, initially as a website monitoring service.

Timeline and Evolution

  • 1996: Founding of AdventNet Inc. The company launches with network management software and solutions for telecommunications and network equipment vendors.
  • 1997-2003: Early growth in network management. The company moved its US HQ twice, settling in Pleasanton, California in 2000.
  • 2003: AdventNet Inc. splits off its network management tools into a new brand, called ManageEngine, and focuses on developing SaaS-delivered office software.
  • 2004: The company releases its first Zoho tool, which begins the creation of the Zoho Virtual Office suite.
  • 2005: Introduction of Zoho CRM, a rival to Salesforce. The company opens Zoho University, its online training center.
  • 2006: The company creates the Site24x7 brand to offer its system monitoring tools from a cloud platform.
  • 2006-2008: Expansion of the Zoho SaaS platform.
  • 2008: AdventNet opens a development center in Austin, Texas.
  • 2009: AdventNet officially rebranded itself as Zoho Corporation to better reflect its broader focus on software applications beyond network management.
  • 2010-2012: Continued development of more business management and productivity tools on the Zoho cloud platform.
  • 2012: Zoho launches Zoholics, its annual user conference.
  • 2013: Zoho University becomes a physical brick-and-mortar institution, opening a campus in Tenkasi, India.
  • 2014-2015: Continued development of new products on the SaaS platform, including Zoho Subscriptions and Zoho SalesIQ.
  • 2015: Zoho reaches 15 million users and moves its worldwide HQ to the iconic Estancia building in Chennai, India.
  • 2016: Zoho reaches 20 million users and opens data centers in the Netherlands and Ireland. New products include OneAuth for multifactor authentication and Zoho Marketplace, which provides third-party tools and plug-ins for the Zoho product suite.
  • 2017: Zoho repackages its online productivity suite as Zoho Workplace and also launches its AI chatbot, called Zia. Launch of Zoho One, an all-in-one suite that includes over 35 integrated applications covering every aspect of business operations, from sales and marketing to HR and finance.
  • 2018: Zoho reaches 30 million users and continues to expand its product list with additions, such as Zoho Analytics. The AI division adds speech to Zia with Zia Voice.
  • 2019: Zoho reaches 50 million users. It constructs a 5-megawatt solar farm in Trichy, India. Launch of Zoho WorkDrive, an online file space and collaboration platform. Sridhar Vembu moves from Pleasanton, California to India, confirming Chennai as the company’s global HQ.
  • 2020: Zoho reaches 60 million users and launches Zoho Remotely, a work-from-home toolkit. The Zia chatbot is integrated into all of its client-servicing products. Zia becomes an AI assistant for productivity suite components.
  • 2021: Launch of the Qntrl brand that offers workload automation. Zoho continues to expand its platform with new products, such as Zoho Contracts.
  • 2022: Zoho reaches 90 million users. The company focuses on evolving its existing products and adds on a few new systems.
  • 2023 to Present: The company switches to partnerships to expand the functionality of its existing products.

Today, Zoho Corporation stands as a leading provider of cloud-based software solutions, with a suite of over 50 applications and millions of users globally. The company remains focused on delivering comprehensive, affordable tools for businesses of all sizes while maintaining its independence and commitment to customer privacy.

Company Ownership

Zoho Corporation is still majority owned by members of the Vembu family. The exact ownership is a little obscure. However, a 2019 article about Sridhar Vembu in The Sydney Morning Herald declared that he owned 88 percent of the company’s shares. There is no mention anywhere of shares owned by Tony Thomas, the founder and creator of the company’s first product. His brother Joy A. Thomas, who was a major early investor, died in 2020 and there was no record of a transfer of shares at that time.

Zoho developed without any external financing, relying on the savings of its founders and their relatives. Kumar and Sekar Vembu and Shailesh Kumar probably have minor holdings in the company.

In 2023, Forbes placed “Sridhar Vembu & siblings” on its India Rich List with a total wealth of $4.7 billion. No other family member was named. The current Forbes live rich list, The World’s Real-Time Billionaires, estimates Sekar Vembu’s wealth at $2.4 billion, which, the site states, is derived from his stake in Zoho. Forbes lists Sekar’s sister, Radha Vembu with a larger fortune of $3.3 billion, stating that this was also derived from her shareholding in Zoho. The Hurun India Rich List 2024 names Radha as India’s richest self-made woman, with a fortune of $5.7 billion. Sridhar Vembu has disappeared from all lists.

Key People

  • Tony Thomas was the CEO of Zoho from its foundation up to 2000 when Sridhar Vembu took over. Thomas then switched to the position of Chief Technology officer (CTO). Although Zoho CRM was launched in 2005, this was actually the group’s second effort at creating a CRM. The first was spun off as a Vtiger CRM in 2004. Thomas went with it, taking also Zoho’s first employee, Sreenivas Kanumuru. Thomas stood down as CEO of Vtiger CRM in 2008 but stayed with the company. Since that date, Kanumuru has been the CEO of Vtiger CRM.
  • Sekar Vembu, according to Forbes, still has a significant holding in Zoho. He and his brothers, Kumar ran the Indian side of the original AdventNet at its foundation. His role as a developer solidified into the position of CTO.  After leaving Zoho in the early 2000s, he founded SwissSQL, which has since been bought by Zoho Corporation. In 2004, after selling SwissSQL, Sekar started up Vembu Technologies, a backup, and recovery service. He is still the CEO and main shareholder of that business.
  • Kumar Vembu was the Chief Operations Officer (COO) of AdventNet from its foundation until 2003 and he is still involved with Zoho. He created his own company, Gofrugal Technologies, which developed and manages a SaaS ERP that caters to retail, hospitality, and distribution sectors. That business was launched in 2004 and was bought by Zoho Corporation in 2023.
  • Sridhar Vembu has been involved with the company since 1997. Vembu has been the CEO of Zoho since the year 2000. However, since 2019, he hasn’t had much involvement with the business, operating as the titular head of the company. He has been a member of India’s National Security Advisory Board (NSAB) since 2021. His day job as a school teacher in a rural school of 52 students now takes up most of his time.
  • Radha Vembu is now the majority owner of Zoho Corporation. She works at the company that she largely owns, though not on the board. Radha is the Product Manager for Zoho Mail. Vembu first appeared in the Hurun India Rich List in 2022 with a fortune valued at $3.9 billion, which is at odds with the Forbes story because the transfer of shares from Sridhar to Radha must have happened between 2019 and 2022.
  • Shailesh Kumar was one of the original India-based founders of AdventNet and he is still working for the company. He is the Chief Engineer and head of Zoho Labs. All the above-mentioned key people attended the Indian Institute of Technology, Madras, except Kumar Vembu, who attended Madurai Kamaraj University.

Locations

Zoho, global headquarters is in Chennai, India. The company also operates Zoho University and a small office in Tenkasi, close to Sridhar’s rural home at Mathalamparai, Tamil Nadu. The company has a presence at a number of other locations around Tamil Nadu. The US headquarters of Zoho Corporation is located in Austin, Texas. The company operates 16 data centers around the world and has sales offices in major cities, such as Tokyo, Sydney, Singapore, Cape Town, and Dubai.

Target Market and Customer Base

Zoho’s entire business strategy relies on reinvestment and reliance on internal resources. Thus, the company has had slower growth than its US rivals but has built a solid customer base among SMBs who can appreciate the own-manager culture of the enterprise.

Target Market

Zoho Corporation primarily targets small to medium-sized businesses (SMBs), though its extensive suite of applications also appeals to larger enterprises. The company’s products are designed to be affordable, easy to use, and scalable, making them ideal for organizations that may not have the budget or IT resources to manage more complex or expensive software solutions.

Zoho also targets specific industries with tailored solutions, such as Zoho CRM Plus for sales teams, Zoho People for HR departments, and Zoho Books for accounting professionals. This industry-specific focus allows Zoho to cater to the unique needs of different sectors, including education, healthcare, finance, and retail.

Customer Base

Zoho’s customer base is incredibly diverse, spanning various industries and geographies. With over 90 million users worldwide, Zoho serves a broad spectrum of businesses, ranging from startups and freelancers to large corporations. While the majority of its users are SMBs, Zoho’s scalable solutions are also used by larger enterprises that require comprehensive, integrated software platforms.

Geographically, Zoho has a strong presence in North America, Europe, and Asia, but it also has a growing user base in emerging markets, where its affordable pricing model is particularly attractive. Zoho’s products are used by companies in over 180 countries, reflecting its global appeal and the versatility of its software offerings.

In terms of customer profiles, Zoho appeals to business owners, managers, IT professionals, and employees across various departments, including sales, marketing, HR, finance, and customer support. The company’s emphasis on integration and ease of use makes its tools popular among organizations looking to streamline operations and improve productivity without the need for extensive IT infrastructure.

Zoho’s Product Suite

Zoho Corporation offers an extensive and integrated suite of over 50 cloud-based applications designed to meet the needs of businesses across various functions. These applications cover a wide range of areas including customer relationship management (CRM), finance, human resources (HR), project management, marketing, IT management, and more. Below are some key products within the Zoho suite:

  • Zoho CRM A flagship product, Zoho CRM is a comprehensive tool for managing customer relationships. Features include lead management, sales automation, analytics, and workflow automation.
  • Zoho Books An accounting software solution, Zoho Books provides features like invoicing, expense tracking, project billing, and tax compliance, making it a favorite among small and medium-sized enterprises (SMBs).
  • Zoho People This HR management tool streamlines HR processes, including employee onboarding, attendance tracking, performance reviews, and payroll management. The tool automates HR operations efficiently.
  • Zoho Projects A project management application that allows teams to plan, track, and collaborate on projects. Features include task management, time tracking, Gantt charts, and project reporting.
  • Zoho Mail A secure, ad-free email hosting service for businesses, Zoho Mail is integrated with other Zoho applications. Features include calendar, contacts, and tasks, making it a central hub for communication and collaboration.
  • Zoho Desk A customer service software that manages customer support tickets, automates workflows, and provides insights into customer service performance.
  • Zoho One Often referred to as “the operating system for business,” this all-in-one suite includes all Zoho applications under a single subscription. It provides businesses with a complete set of tools to manage every aspect of their operations, from sales and marketing to finance and HR.

Zoho CRM is Zoho Corporation’s flagship product. It helps businesses manage their sales, marketing, and customer support activities. It caters to businesses of all sizes and integrations with other tools widen its appeal.

Key Features:  

  • Sales Force Automation: Automates lead management, contact management, deal tracking, and workflow automation.
  • Omnichannel Communication: Communication across multiple channels, including email, phone, social media, and live chat. Ensures consistency of approach and centralized activity tracking.
  • Analytics and Reporting: Enables the tracking of key performance indicators (KPIs), sales forecasts, and customer behavior insights.
  • AI-Powered Zia Assistant: Can predict the best time to contact leads, analyze email sentiment, automate tasks, and provide insights based on customer data. Zia provides contextual recommendations and automates routine tasks.
  • Integration Capabilities: Integrates with other Zoho applications (such as Zoho Books, Zoho Desk, and Zoho Projects) as well as third-party tools like Google Workspace, Microsoft Office 365, and Mailchimp.
  • Mobile CRM: The mobile app facilitates CRM activities on the go. Sales staff can access features like lead management, contact management, and task management.

Zoho CRM offers extensive customization options, allowing users to tailor the platform to their specific business needs. Users can customize modules, fields, layouts, and workflows. Zoho’s drag-and-drop interface makes it easy to create custom reports and dashboards.

Pros:

  • Affordability: This is an attractive option for SMBs that require a CRM without the high cost associated with some of its competitors.
  • Ease of Use: An intuitive interface allows users to navigate and utilize features without extensive training. The customization options are also easy to implement.
  • Comprehensive Feature Set: Caters to all aspects of customer relationship management, from sales automation to customer support.
  • Scalability: Suitable for businesses that are growing or have fluctuating needs – additional Zoho apps or third-party integrations become vital as the business evolves.
  • Strong Integration Ecosystem: Integration with other Zoho applications and third-party tools provides access to all necessary software through a single console.

Cons:

  • Customization Can Be Overwhelming: The extensive options available can be overwhelming for some users, particularly those who are not tech-savvy.
  • Performance Issues with Large Data Sets: Some users have reported performance issues, such as slower load times, when dealing with large data sets or when using highly customized configurations.

Other Notable Products

Zoho has a vast menu of services and offers a package, called Zoho One, which includes all of them. Zooming in on specific products, we find two that are particularly successful:

1. Zoho Workplace

Zoho Workplace is an integrated suite of productivity and collaboration tools designed to streamline communication, document management, and team collaboration. It includes:

  • Zoho Mail for secure business email
  • Zoho Writer for word processing
  • Zoho Sheet for spreadsheets
  • Zoho Show for presentations
  • Zoho WorkDrive for cloud storage and file sharing
  • Zoho Cliq for team chat
  • Zoho Meeting for video conferencing

The name of the suite and its components are clearly aimed at competing with Google Workspace, which, in turn, challenges the market dominance of Microsoft 365. The suite supports collaboration, allowing teams to co-edit documents, share files, and communicate seamlessly within the Zoho ecosystem.

Zoho Workplace matches its rivals on functionality but beats them on price. However, some users may find the user interface less polished compared to more popular suites.

2. Zoho Books

Zoho Books is a cloud-based accounting software tailored for small and medium-sized businesses. Features include invoicing, expense tracking, bank reconciliation, project billing, multi-currency support, and tax management. The platform automates accounting through recurring invoices and automated bank feeds. Zoho Books is customizable and integrates with other Zoho applications, notably Zoho CRM.

Zoho Books’ strengths lie in its affordability and scalability, providing enterprise-level features at a fraction of the cost of competing accounting software like QuickBooks or Xero. Its reporting and compliance tools are suitable for GST and VAT in regions like India and the EU. However, Zoho Books may not be the best fit for larger companies with more complex accounting needs.

Major competitors

Zoho Corporation has a wide product range, which makes an exact rival difficult to define. However, the following businesses compete with the major products of Zoho.

1. Salesforce

Category: CRM

Salesforce is the market leader in CRM software and a direct competitor to Zoho CRM. Advanced CRM features include sales automation, customer service management, marketing automation, and AI-driven analytics. While Salesforce is known for its scalability and vast capabilities, Zoho CRM competes on pricing, ease of use, and integrated apps across its ecosystem.

2. Microsoft 365

Category: Productivity and Collaboration (Zoho Workplace)

Microsoft 365 (formerly Office 365) is the leading productivity suite; it includes Word, Excel, Outlook, and Teams. It competes directly with Zoho Workplace and its Zoho Mail, Zoho Writer, and Zoho Cliq components. Microsoft 365 dominates due to its legacy presence and brand, while Zoho appeals to cost-conscious users looking for an affordable alternative.

3. Google Workspace

Category: Productivity and Collaboration (Zoho Workplace)

Google Workspace (formerly G Suite) is another major competitor in the productivity space, offering Gmail, Google Docs, Google Sheets, and Google Drive. Google Workspace’s simplicity, real-time collaboration features, and integration with other Google services are key strengths. Zoho competes by offering a more cost-effective and privacy-focused solution.

4. QuickBooks

Category: Accounting (Zoho Books)

QuickBooks by Intuit is the leading accounting package, providing tools for invoicing, payroll, and tax management, particularly for small businesses. Zoho Books competes with QuickBooks, offering similar accounting features at a lower price, with orchestration into Zoho’s broader ecosystem of applications.

5. Xero

Category: Accounting (Zoho Books)

Xero is a cloud-based accounting package that rivals Zoho Books. Xero is popular among small businesses for its intuitive interface, strong third-party integrations, and support for invoicing and payroll. Xero is more feature-rich, but Zoho Books is more affordable, especially those already using other Zoho tools.

6. Slack

Category: Team Collaboration (Zoho Cliq)

Slack is a leading platform for team messaging and collaboration, offering channels, direct messaging, and third-party app integrations. Zoho Cliq competes as part of Zoho’s integrated suite, offering similar chat and collaboration features but with deeper integration into other Zoho products, such as Zoho Projects and Zoho CRM.

7. Freshworks

Category: Customer Support and CRM (Zoho CRM and Zoho Desk)

Freshworks offers products like Freshdesk (for customer support) and Freshsales (for CRM), which compete with Zoho CRM and Zoho Desk. Freshworks products are easy to use and provide strong customer support tools. Zoho CRM and Desk compete on price and their integration with Zoho’s ecosystem of business applications.

Conclusion

Zoho competes across a wide range of categories with some of the biggest names in tech. Its key strengths lie in affordability, integration within its ecosystem, and its focus on data privacy. However, competitors like Salesforce, Microsoft, and Google lead in market share due to their established reputations, larger user bases, and extensive features. Zoho’s strategy is to provide cost-effective, scalable, and privacy-conscious alternatives, especially for small and medium-sized businesses looking for an integrated software suite.


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