Understanding Zoho, The Company Taking On Google, MS

Understanding Zoho, The Company Taking On Google, MS

Zoho, a software company started in 2005, has built applications that compete with Google and even Microsoft. The vendor believes it can stay in the game by having a quick development cycle that adds new features to their products faster than the big guys.

Despite that diversification, it drew acquisition interest from prior to that company partnering with Google to offer Google Apps for free for customers. Vembu says that's CEO and chairman Marc Benioff offered to buy Zoho from AdventNet outright, but Vembu declined based on the belief that the two companies "would not be a good cultural fit" and that Zoho had more potential to grow.

It's hard to know what the price tag for the company would have been. Since Zoho remains privately owned, they don't specify how much money they make. But in an interview on Fox Business, when asked if they made US$1 million a month, Vembu replied, "it's a lot more than that."

The Great Compromise: How Zoho is the best of both the Microsoft and Google worlds

Since the launch of Google Apps, the product has been met with both praise and criticism, the latter centering around the fact that it offers limited offline access and functions in its productivity applications as those found in Microsoft Office.

Zoho has focused on bringing the rich functionality of Microsoft Office to the Web, something Microsoft themselves have failed to do for fear of cannibalizing their current business model of delivering software on premise and with higher margins. Zoho also used a Google tool, Google Gears, to make portions of the Zoho applications suite work offline.

When asked what Office-like functions Zoho has that Google Apps does not, Vegesna is able to rattle off a laundry list. Zoho Writer, for instance, has pagination, thesaurus, equation editor, footnotes, endnotes, TOC, and use of the applications with a mobile device that doesn't have an internet connection.

Like Google, Zoho also recognizes that imagining a corporation just ditching Microsoft Office entirely seems unlikely just yet. As such, Zoho boasts better integration with the Office suite than Google Apps. While the latter allows you to write a file in Google Docs & Spreadsheets and then export it to Microsoft Word and Excel, Zoho has a plug in that allows you to write files in Office and move them to the Web (in other words, files can move both ways).

What to Expect from Zoho, and why

Zoho develops its products in true form for a SaaS company. In the past, traditional vendors who supply companies with on premise software would send updates to that software not very frequently. When they did send an update, however, it was pact full of new features and functions that were sometimes nightmares for IT departments to implement, and left training issues for employees who used the software.

Zoho, by contrast, works on an agile development cycle, where small updates are made frequently (weekly or monthly). This allows Zoho to constantly innovate around the product and stay ahead of competitors such as Google, says AMR Research's Yarmis. "They will keep aggressively adding functionality in this Web-based development model," he says. "You can also update things without very much user disruption."

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