Salesforce Lightning Strikes, Burns Customers 

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Lightning struck last week when Salesforce announced its new Sales Cloud and Service Cloud Lightning Editions. The new editions come with a whopping 20 percent across-the-board price hike.  

In its announcement, Salesforce said, “Over the past 17 years, we’ve delivered thousands of features across our products, increased our data center capacity, and we continue to make our systems more trusted, bringing additional value to our customers.”

While this sounds laudable, it doesn’t pass our bullshit test. For all its talk of adding value to customers, Salesforce spent a paltry 15 percent of revenue on Research & Development in 2015. Meanwhile, 51 percent of its operating expense went into customer acquisition (i.e. sales and marketing).  

Known already for lofty prices, Salesforce uses the “customization and configuration” sleight of hand to justify this new luxury tax. Last we checked, the implicit promise of cloud applications was that new features, updates, and versions are included in the subscription fee.

The Dark Side of the Force 

Reckless spending to acquire customers, unmindful of profitability, always ends badly – as price increases for customers. Well, it’s been 17 long years of unprofitable growth for Salesforce and their recent price hikes confirm that shareholder pressure is taking its toll.

We’re not the only ones who saw this coming. In April 2015 Forrester predicted that the “original Salesforce CRM software, for which the company is known, will not support this revenue growth on its own.” Forrester added this: “What is good for Salesforce’s investors is not necessarily good for its clients.” 

Salesforce’s Lightning editions reflect this exact dilemma. Consider two-factor authentication–a method that uses a combination of two different ways to authenticate every user–that’s become essential to secure cloud data. Salesforce provides two-factor authentication only in their $150 per month premium plan. At Zoho we see security as a right; we’ve even made it part of our free edition. The pressure for investor returns at Salesforce has supplanted customer data security, precisely as Forrester predicted. Salesforce cloud security is now just for the 1%. 

Over-investments and poor investments cause higher prices, which end up burning customers. Just examine Salesforce’s real estate plans. Perhaps CEO Marc Benioff can explain to Jim Cramer on his next “Mad Money” appearance why they’re spending $1.1 billion on a fancy new office tower in the most expensive city in the country while customers are watching prices go up. Mad Money, indeed.

An Innovative Cloud For All 

Salesforce’s price hikes fit the time-worn strategy of a bloated, aging software company retreating to large risk-averse enterprise customers. Raising prices, soaking smaller and medium sized businesses to serve the largest, and overpricing in international markets (even under a strong dollar) is a far cry from the promise of cloud software: to reduce costs and make amazing software technology affordable. “King of Cloud” it does not make. 

Salesforce’s new prices and market strategy reaffirm our distinctly different mission at Zoho: To bring innovative, high quality software to any business at unmatched value. 

Consider the combined cost of Salesforce’s Sales Cloud, Marketing Cloud, and Service Cloud, which will likely be upwards of $500 per user per month. Zoho’s equivalent offer is CRM Plus. It is a suite of 8 different apps – spanning marketing, sales, and customer service – and costs $50 per user per month. Which means a year’s subscription of Salesforce will buy you a decade with Zoho. Small and medium companies all over the globe can afford what used to be the prerogative of the very large in making their businesses efficient. This is the revolution of the cloud.  

Your Salesforce Discount Code: Zoho 

A closing note: If you’re ever in negotiation with a Salesforce rep, just let them know you’re considering Zoho. There isn’t a faster way to squeeze out a fat discount.

Recent Service Disruptions

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We have been facing an on-and-off surge in network traffic that is causing these service disruptions. It is a denial of service attack, and we are working with our service providers to mitigate it.

As we work through these, we are also putting in place stronger measures so that we can withstand serious attacks in future.

We sincerely apologize for these service disruptions. Our own business relies on Zoho so we know how painful these disruptions can be. We want to assure you that we are working on both short term and long term steps to handle these attacks.

Customer Story: How Mogl Built a Business and a Charity with Zoho

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Southern California based start-up Mogl gives cash back to consumers for eating out and has seen sales soar since incorporating Zoho products into their business. In addition they donate a portion of every customer transaction to charity.

Watch how Mogl uses Zoho CRM, Creator, and Reports to operate lean while experiencing rapid growth.

5 Things to Remember about your Company’s Mobile Marketing Strategy

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Technology is a great enabler. For me as a marketer, it’s fascinating how technology is changing the way we look at marketing, more so for mobile marketing. Mobile usage continues to grow across the globe. By 2017, mobile devices will make up 87 percent of the total sales of Internet-enabled technology. Right now, in 2015, more and more companies are beginning to realize the potential mobile marketing has to grow their business over the Internet.

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Salesforce Acquisition: Nobody Rings a Bell at the Top

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Yesterday rumors broke out that Salesforce is entertaining buyout offers and has hired investment bankers to consider “strategic options”. My first thought? What a great time to sell! My second thought: please don’t jinx it – not when someone is coming up on a $50-$60 billion payday at 10x forward sales. The P/E of course is incalculable since there is no E.

Nobody rings a bell at the top of the market. But we gotta admit – Marc Benioff is the best salesman in software the cloud, ever. Now, I am trying hard not to think of ​Steve Case and AOL and Time-Warner, because this time it ​will be different, of course.

In the past few weeks, BlackRock’s chief Larry Fink released a letter addressed to the CEOs of S&P 500 companies talking about the need for a long-term view. That may not be a good idea, because it is no fun to think about write-downs and kitchen-sink quarters. Only spoilsports talk about a hangover when the party is in full swing.


Consolidation is coming to the cloud; we at Zoho recognized that a long time ago. Our entire strategy has been dictated by our desire to stay independent (as I have explained before), even as consolidation alters the landscape around us.  Even CRM, a very significant industry just by itself, doesn’t make much sense as a stand-alone product. The proof is that Salesforce (hint: their stock ticker is still CRM) has been on an acquisition rampage over the past few years trying to complement its product portfolio and show growth by acquiring revenue.

But even with the more than $3 Billion spent on acquisitions in the past 3 years, and even with their market cap of $40 billion $50 billion dollars, Salesforce finds itself the target of a takeover.

Why do we expect consolidation? Simple – there are too many companies not making money. Why don’t they make money?​ Again, simple – they spend way too much on sales and marketing. Let’s consider a hypothetical combination of Box and Zendesk – both “Post-IPO Non-profits”  as we call them – you could cut the combined sales and marketing spend by half, and that may just be enough for them to turn a profit. That is the classic case for consolidation; a case that looks ​compelling on a spreadsheet – you know, the tool that Box actually doesn’t know how to build.

If only company cultures were modeled as cells in a spreadsheet, where people stay in their neat little boxes and hairy code-bases magically combine to produce beautiful children.

Take the case of Salesforce acquisitions for the past 3 years – here is the extensive list. How many of them have been integrated even at a single sign-on level, let alone at a product level? In fact, to solve that problem, Salesforce recently acquired a single sign-on company.

Winner’s Curse

​When you escape the jinx, there is still the curse – the winner’s curse. Most acquisitions fail and silently get written down or written off entirely – see for example, Zimbra’s acquisition by Yahoo. Salesforce has written down a bunch in the last few years, after overpaying by hundreds of millions of dollars – at least, the money didn’t come out of their profit!

Jinxes and curses? No, we don’t want these to befall our customers. Since consolidation is coming, if you are a customer of cloud companies, it’s time to get used to being traded around.

Except, of course, if you are a Zoho customer. With us, you will not underwrite any acquisition premiums or bloated sales and marketing costs. You will get a broad suite of deeply integrated products that helps you run your business on the cloud. Private and bootstrapped since our founding – we don’t answer to anyone but you. We never will. We aren’t going anywhere.


​Happy employees make for a happy company

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It’s a lovely Monday morning, but you are feeling gloomy as you enter your office, making a mental list of things that have to be done. You greet your colleagues, who are equally preoccupied, with a nod. Then one of your peers smiles at you, and you find yourself smiling back. That’s all it takes – a smile – to make you smile back and relax for a bit.

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A smile is also a great stress-buster, like laughter, and that’s one reason why you should smile in your office, especially if you are having a stressful day. It’s as important to be happy at your workplace as in your personal life and here’s why: Read more

5 Ways to Know a Company’s Work Culture (Without Asking)

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I’m surprised when my friends tell me they know nothing about the culture of a company they are about to join. ‘It pays well, and I like my job title. That’s all that matters.’ ​Does it, really? These are important factors, for sure, but if you can’t be happy where you work, you won’t stick around for long.

Happiness is subjective, of course. What makes me happy, may not matter to you. I feel happy when I am doing the kind of work that satisfies my creative needs, in a workplace where I can see myself learning and growing as a person and in my career. ​This is greatly influenced by the company’s culture.

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How can you determine what a company’s work culture is before taking the plunge and accepting the job offer?

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