InfoWorld did a good analysis of MS Office alternatives (Slideshow here). They picked couple of vendors from the cloud (Zoho and Google) and couple from the Open Source world (IBM and OpenOffice) and did some analysis to see if they stand any chance against MS Office. Full article is available here. Here is the summary.

Glad to see Zoho lead the pack (along with IBM) with our current apps.

Bottom Line:
If you’re ready to embrace the SaaS future, then Zoho could be the productivity suite you’ve been waiting for. Zoho can provide both personal productivity and business back-end applications, and with Google Gears, you can keep working on documents even if you can’t find the Internet. Zoho is the only suite here that you could easily use to run a complete business. It’s also the only one that can run virtually all the Excel macros you might have developed

The good news is, the applications are improving at a very rapid pace. If you have noticed, its been a while that we rolled out a new app. The focus lately has been more on integration between apps and enhancements to the existing ones. In the longer term, we think cloud based productivity suites can go far beyond desktop software. We’ll see this happen over the next year or two.

While InfoWorld looked at Word Processor, Spreadsheet and Presentation apps, the productivity suite goes beyond these three (Wiki, Email etc are others). Also, you’ll need more apps to run your business than a productivity suite. In the bigger picture, we are trying to build a suite of apps to run your business. As we often say, we want to be your IT Department.

Thanks Curtis for the analysis.

Update: ComputerWorld did similar analysis here.

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I was recently interviewed on Fox Business News. The anchor Liz Claman told me one of the things that interested them about Zoho/AdventNet is our recruitment model. It is a subject I am passionate about -in fact, I spend about as much time on it as our products or technology. After all, AdventNet has about 700 people, and we are hiring at a steadily increasing pace, so recruitment, motivation and retention are important topics for us.

I was talking to a partner at a successful venture capital firm a few weeks ago (no we are not raising money!), and the subject turned to recruitment. I told him we don’t really value fancy degrees and famous schools. He was surprised - perhaps because of my own educational background. I asked him “Consider all the partners in your own firm and similar firms like yours, how many of them come from fairly unremarkable academic backgrounds?” I stressed that my argument was not that every partner comes from unremarkable background, but enough of them do, making academic background a poor way to screen for partners in venture capital. In fact, the reality of venture capital, as with any demanding field of human activity, is that most of what you learn you learn by doing. As the management philosopher Peter Drucker has observed, “Our most important education system is in the employees’ own organization.” Paul Graham has made similar observations about the academic backgrounds of founders of Y Combinator start-ups - in fact, Paul makes a stronger point that people coming from humbler schools seem to try harder to succeed.

The trouble has been that while most people understand, even readily accept that observation, they have trouble formalizing it, and more importantly, acting on it. In our own case, this observation dawned us slowly over the years - one of the benefits of being in business for a long time is you have the time to learn obvious things slowly.

Our company in India always faced trouble recruiting, because most college graduates, particularly from well-known colleges, would prefer big-brand-name firms. Simply out of sheer necessity, we started to disregard the kind of college a person graduated from, and the grades they obtained. In India, that task was made even easier, because much of the Indian industry is boringly conventional, and job advertisements that specify things like “Must have a minimum of 80% average in college” are fairly common (so if you got only 79%, don’t bother to apply). As a result, we get a lot of the arbitrarily-cut-off category applicants. What we found over time was that there is a lot of really good talent in that pool, which the industry had overlooked. Based on a few years of observation, we noticed that there was little or no correlation between academic performance, as measured by grades & the type of college a person attended, and their real on-the-job performance. That was a genuine surprise, particularly for me, as I grew up thinking grades really mattered.

Over time, that led us to be bolder in our search for talent. We started to ask “What if the college degree itself is not really that useful? What if we took kids after high school, train them ourselves?” I talked to a lot of people internally, and one of our product managers introduced me to his uncle, a college professor, who he thought might be interested in hearing me out. As I shared our observations on recruiting, he shared his own experience in over twenty years teaching Mathematics and later Computer Science. It turned out we shared a common passion. He joined us within a month to start our “AdventNet University” as we very imaginatively called it. This was in 2005. He went to schools around Chennai to recruit students. So as not to distract anyone from their existing plans, we waited till the school year ended, went to several schools to ask for bright students who were definitely not going to college for whatever reason (usually economic). We then called on those students and their parents, and explained our plan. We started with an initial batch of six students in 2005, who were in the age range 17 or 18.

That proved to be an outstanding success. Within 2 years, those students would become full time employees, their work performance indistinguishable from their college-educated peers. We have since expanded the program, with the latest batch of students consisting of about 20, recruited not just from Chennai but smaller towns and villages in the region.

One question that comes up often: if you don’t look at formal credentials, what do you actually look at? This is a surprisingly difficult question. In fact, doing full justice to it would take me a series of posts, and take me into some deeply philosophical territory, which I will attempt some other time. At one level, the answer is very simple (”go by gut feel, i.e use your human gift of judgment” - yeah, I know, what a cop-out), but at another, it is exceedingly hard. The difficulty comes from the simple observation: any formal rule-based system involving human beings is very easy to game and will be gamed. More on that later.

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Sridhar got interviewed for FOX Business’ special series, ‘ Three Days in the Valley’.

From the interview,

Claman asked Vembu of his recent decision to turn down an offer from SalesForce.com to acquire Zoho.

“I see a big potential in this, so we really are not selling anything,” Vembu said.

When asked if the company was making more than $1 million a month, Vembu replied, “It’s a lot more than that. We don’t disclose numbers, but it’s a lot more than that,” he said. With regard to an IPO, Vembu said, “It’s not something we are focused on right now. We are focused on building and serving the customers right now. When asked about selling the company, he replied, “Never say never in business, but we are actually in this for the long haul.”

Three Days in the Valley: Liz Claman Sits Down with Sridhar Vembu

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We are delighted to announce that Zoho is part of PC World’s “The 100 Best Products of 2008“. Thanks to PCWorld’s editors & readers! We stand 49th on the list.

We were also included in similar list last year. Zoho was also included as one of The 25 Most Innovative Products of the Year from PC World late last year.
Past awards won by Zoho.

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Lately, I have been thinking about advertising - no, not as a business model for Zoho, advertising and work-oriented software don’t mix, in my opinion - but from the point of view as an advertiser ourselves, again not primarily related to Zoho. AdventNet, the parent company of Zoho, uses a variety of marketing channels, ranging from trade shows to search advertising, to popularize our software products. What we have noticed is that the ROI of internet advertising, outside of search, has been dismal and getting worse. I was reminded of this when I read the post by Jason Calacanis on falling advertising rates in social networking sites.

But this trend extends far beyond social networking. As a WSJ Online and NY Times online regular (30 minutes a day), I can safely say that I don’t recall any of the ad impressions on those sites in months. No doubt they have always been there, but I just can’t recall any. In contrast, I have watched CNN perhaps a total of 1 hour in the last 2 weeks and yet, I can recall at least a couple of ads from CNN. What makes TV advertising so effective is that it is so intrusive. In the other end of the spectrum lies search ads on Google, which has access to the most distilled form of user intent available, making it possible for ads on Google to almost become content.

Where in the spectrum do other forms of internet advertising lie? By their nature, intrusive ads on the internet don’t work - the user simply clicks away. Even when the prospect of some form of compelling content forces the user to stay (pre-roll ad on internet video, for example), pretty quickly users figure out they can switch to another browser tab until the ad runs itself out and the content becomes available.

Personalization and micro-targeting are thought to be the answer to this problem, but I am not persuaded. Let me give an example: let’s say I list reading & economics as my interests in my profile somewhere that is available to advertisers. Let me be even be more specific and list Austrian School economics. So could a publisher micro-target me to try to sell me a book? Here is the problem they would face: there are a number of specialized blogs that offer outstanding content on these subjects, and I am very likely to hear about books from these sites organically. People who post on these sites (both authors and commenters) are likely to be far more relevant than any computer algorithm could ever be in targeting my interests. So a prospective book publisher in these topics is better off providing real content to these sites to seed user interest than to run banner ads all over the place. In fact, in at least one case, the publisher of such books runs a fairly active content site, and I end up buying the books because I like the content offered in the site.

So here is what is going on in a nutshell: targeted advertising is competing for attention with targeted content, and content would win that contest every time, as long as intrusion is not possible. The only way for targeted advertising to win is to actually become content itself. That explains why Google search ads are so effective: they are a form of content.

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Randall Kennedy of ZDNet makes a bold prediction that streaming office will kill cloud based alternatives like Google Apps and Zoho. CenterNetworks has a somewhat different take. Let me first explain what is meant by streaming office: the server splits the code of an existing desktop application like MS Office into chunks, streams the code to the client as needed,  which the client executes in a virtual machine layer. I would call it an “appletized application” (though there is no Java involved in this).

So is that model going to finish off web application suites like Zoho? Call me hopelessly biased or hopelessly delusional but I vehemently disagree (surprise!).  Let me list some reasons.

1. One-time loading isn’t 

Proponents of such systems always say “it is only a one time download”. Yes, it is a one time download, but for each PC you use, and often each browser you use as well.  Combine that with browser version upgrades, VM upgrades & application upgrades, and you are going to be loading the application code much more often than is comfortable. Such upgrades have a way of happening just when you want to get in/out quick to get something done. Experience with Java applets and Java webstart has shown that this is true.

With HTML/JS apps, we actually assume that code will be downloaded practically every time, and architect it to work fast in that case. We measure code in kilobytes.

2. Light footprint of web apps doesn’t preclude rich functionality 

Kennedy makes the point that only streaming office could deliver full office functionality:

Full Office Functionality - MAV encapsulates the entire sequenced application. This isn’t some “web-based” Office knock-off. It’s the real deal: Microsoft Office in all it’s sophisticated, class-leading, standard setting (flaunting?), enterprise desktop-dominating glory.

Mike Gunderloy of WebWorkerDaily observed how rapidly online suites are evolving. I have argued that online application suites are well on their way to matching and exceeding the functionality of desktop applications. Our recent support for VB macros in Zoho Sheet is an example of the rapidly evolving functionality. By the way, we run the macro securely in the server, the best place to execute such code. Due to intelligent partitioning of the application, online suites are going to retain their ease of use and lightness advantages, while advancing in terms of features.

3.  Streaming Office assumes a Fat Client PC

I am typing this post in a fairly low-end machine, which can run Firefox well, but cannot do much else (I call it a Firebox). In fact, I often use fairly old PCs with Firefox to torture-test Zoho and loudly complain to our developers to fix this or that. My personal best on that score is a Windows 98 PC (amazingly it runs Firefox well!) we have lying around here, and yes Zoho suite runs acceptably on that machine. I have cheap friends who still have Windows 2000 PCs at home (which again runs Firefox well!) and use it as their browsing machine. Good luck running streaming office on any of these machines. This is not a trivial issue. The web computing model has given a new lease on life for old machines, and people aren’t going to upgrade their hardware just to run streaming office. The reception for Windows Vista, which essentially requires the purchase of a new PC, shows that this problem is real.

Let me make a bold prediction of my own: streaming office will fail. Note that I am not talking about MS office per se here - I am suggesting that the streaming incarnation of it will fail. Web suites, including Zoho, will succeed in carving out serious market share. Within that space, our own goal is sustainable, profitable market share, that keeps us vibrant and innovative. With our breadth and depth of applications, we are well on our way.

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We are happy to announce that Zoho is a winner of the 2008 Webware 100 award in the Productivity Category! The Web 2.0 user community cast nearly two million votes in an online voting poll which ultimately selected the winners.

Thanks to all of you who voted for Zoho! And congrats to all the other winners as well!

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Christian Harris at ZDNet reviewed Zoho Show 2.0 recently. From his review,

Zoho Show is a straightforward to use thanks to its pre-built themes, clipart and shapes, coupled with handy features like drag-and-drop. In fact, anyone familiar with using the web should be able to put together a decent-looking presentation in just a few minutes. And, of course, you can access your presentation from any computer, so long as it’s connected to the internet.

Version 2.0 of Zoho Show has a number of enhancements — most noticeably the new user interface, which has been completely redesigned. The UI is now less cluttered and more intuitive to navigate, and the floating toolbars are a real boon. Support for themes has been improved too, and the application now has over 50 default themes to get you started.

Zoho Show 2.0 integrates much better with Zoho Meeting, an online desktop sharing tool from the same stable. The major benefit here is that you can now quickly and easily switch between applications to share your desktop with the participants viewing your presentation. And Zoho Chat allows you to chat with your audience during remote presentations.

Chris gave 7.5 out of 10 for Zoho Show 2.0. Zoho Invoice which we released a couple of weeks ago has got a very good welcome from small & medium businesses. Peter Piazza writes about the release at CIO.com in an article titled, ‘Zoho Challenges Business App Industry Heavyweights‘ :

Web 2.0 company Zoho has announced the launch of the latest product in its suite of online freeware and payware applications. Zoho Invoice gives users the ability to create everything from estimates to invoices in multiple currencies.

Zoho Invoice is integrated with PayPal, so invoices can be generated and sent to customers, who can then make payments directly through PayPal. The company plans on adding more payment gateways. The application is free for sending up to five invoices per month; four monthly subscription versions range from $5 to $35 and allow from 25 to 1,500 invoices to be sent each month.

Mozilla’s Firefox 3.0 release is being anticipated much by all. And it was our pleasure seeing the Release Notes for Firefox 3 Beta 5 mention Zoho in it!

[Improved in Beta 5!]  Speed: improvements to our JavaScript engine as well as profile guided optimizations have resulted in continued improvements in performance. Compared to Firefox 2, web applications like Google Mail and Zoho Office run twice as fast in Firefox 3 Beta 5, and the popular SunSpider test from Apple shows improvements over previous releases.

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Telegraph, UK has come up with ‘The 101 most useful websites‘, ranging from Technology to Travel. And Zoho is listed high up at Number 5! Telegraph describes Zoho as,

A suite of free business programs. From word processing and presentation software to tools for taking notes in meetings, planning projects and creating databases.

And ‘The Washington Post’ carries today PCWorld Erik Larkin’s article on the recently released Zoho Invoice. From the article, ‘Zoho Adds Invoicing to its Online Suite‘

If you run your own business, you no doubt have the same love/hate relationship with invoices that I do. Love them, because they put money in your pocket. Hate them, because they can be a pain in the derriere.

Zoho’s brand-new Invoice service tries to salve some of that pain with an online system for creating, sending and tracking invoices. After spending some time with it just now, I can see it being a decided improvement over my current spreadsheet and Word doc collection.

It’s not hard to create and send invoices, especially when you don’t send that many of them each month, and frankly my manual spreadsheet-and-doc system suffices there. But Zoho’s system makes for easy tracking as well, with available reports on all your paid and pending invoices for today, as well as this week, month, quarter and year. You can also check on sales by customer, invoices by date, tax reports and other records.

Some other nice features such as an optional link to pay an invoice with a Paypal link to your account, exporting invoices as a pdf, and options for creating recurring invoices mean that I’ll be spending more time with this new service to see if it suits my needs.

Thanks to Telegraph and Erik Larkin, PC World & The Washington Post!

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Your favorite web services suite Zoho, is a finalist in the Productivity category of 2008’s Webware Awards. (we were a finalist in 2007 as well).

Vote for Zoho here : http://www.webware.com/html/ww/100/2008/prod.html

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