Image via CrunchBaseZoho is an upstart, but it is an upstart with major advantages. How about a laser focus and a great slew of products? And I admire their decision to not sell out to Salesforce.com.
What is holding it back is its not wanting to take venture capital money, and have no obvious ambitions to go IPO at some point. Those are mistakes. You can stay small and private and cozy and beautiful, or you can go big. I think Zoho should aim to go big. Zoho has to have IPO ambitions.
Microsoft is a giant but its major revenue sources are so foreign to what Zoho does that you could argue Microsoft is almost in a different industry altogether. Google is more in the cloud, but search is that company's strength and weakness. It is a good thing Zoho products integrate seamlessly with Google office apps. That way you get the advantages of Google being big and Zoho being nimble and superior.
Zoho's competition is not with Microsoft or even Google, but itself. It has to have IPO ambitions. That lack of ambition was not something given to it by either Google or Microsoft but itself.
Wall Street Journal: Blogs: Digits: QandA: Upstart Takes on Google, Microsoft in the Cloud
Competing against industry giants can be a brutal ordeal. Just ask RC Cola, which took on Coke and Pepsi. ..... For Zoho, a small company that competes with Google and Microsoft in the market for Web-based software, the strategy for surviving alongside huge rivals has been to target gaps in their products. Zoho now offers nearly 30 free and fee-based tools in the cloud: from wikis, word processing and spreadsheets to customer-relationship management, invoicing, and project management. ..... Zoho’s 3 million registered users ..... A small percentage pay subscription fees, enabling Zoho to quietly build a profitable niche, without PR or advertising. ...... founded in 1996 ..... headquarters in Chennai, India, and Pleasanton, Calif., now has 1,100 employees, nearly 1,000 of whom work in India...... has long refused to take venture capital funding and has rejected numerous acquisition offers. ...... founder and CEO, Sridhar Vembu ..... Google’s product suite is limited to Mail & Office suite, while Zoho has a much broader product suite targeted at small and mid-sized businesses. We integrate well with everyone, including with Google Apps. ....... Microsoft has formidable technology resources, but faces the economic challenge of transitioning their business model to the cloud ....... earn the trust of consumers through actual daily execution, not just talk ..... why we focus on small and mid-sized companies first, because they tend to have fewer inhibitions about trying something new. ....... we have stated a preference to be independent and private, so that we can keep our vibrant engineering and customer-support focused culture. We tend not to spend a lot of money in sales and marketing. This allows us to invest in engineering, and come up with interesting new products. ....... Google’s philosophy is to offer a minimalist interface, while Zoho provides a much richer suite in terms of depth of functionality, breadth of applications and richness of the interface. We believe business users want and need a lot more than what Google offers. At the same time, recognizing the immense reach Google has, Zoho has chosen to partner with them, so that customers can mix and match Google Apps with various apps from Zoho. ..... Over the next three years, you will see cloud offerings really mature in terms of features and functions, and become feature rich, overtaking desktop offerings in many areas. As feature parity is reached, market adoption will explode. Just as mobile phones overtook wired phones in terms of features, functions and of course usage over the past 10 years, cloud software will overtake installed software over the next 10. The reason in both cases is the sheer speed of technology evolution. .....Financial investors necessarily need exit or liquidity, while our focus is to stay in business for the long haul. We prefer to sacrifice near-term growth in favor of keeping our company healthy and vibrant for the long term, which is not something an exit-focused investor would like to see.
