Dan Farber at ZDNet has a great post up Zoho sets out to challenge the software world – thanks a lot, Dan, for outing our secret plan for world domination (yeah, right!) I am going to have to pay for that title with my wife – she mercilessly punctures any delusions of grandeur I could harbor in a moment of weakness.
A couple of clarifications are in order: AdventNet, the parent company of Zoho, has an IT management software suite, very imaginatively named ManageEngine, which has been downloaded several million times, installed in over 700K sites, and since we have a generous free edition, the paying customer base is a lot smaller. In that respect, the AdventNet business model is much like that of any open source company. Lots and lots of free users (we love them!) and a subset of them become paying customers (we love them even more!). That philosophy keeps our customer acquisition costs low, so we can focus on doing what we really enjoy doing: build cool software, and lots of it. Indeed, one look at the AdventNet site will tell you how every product comes with a Free Edition.
As for quantity vs quality, it is true we ship a lot of products (over 70 if you count all AdventNet offerings, I have actually lost count!), but each of our product teams has a very strong mandate on quality. We would much rather withdraw a product offering than compromise quality. And we don’t start a product, unless we can dedicate meaningful engineering resources to it.
I bring these up, because that is pretty much the same philosophy we follow at Zoho. We want to have a very generous Free Edition, and then convert a subset of those to paying customers. Zoho CRM and Zoho Projects, both of which are commercially available, have a sizable pool of free users, from which a subset have become paying customers. We are going to follow the same policy with all our Zoho services.
Now, the big question: can Zoho survive against Google and Microsoft? Somehow I just don’t spend much time worrying about it (OK, may be just a little!). I reckon, based on our own 11 year history, if we keep shipping cool products, and treat the customer well, we will find a market. AdventNet has reinvented itself more than once in its history – Zoho is just the latest in a series of transformations, from a humble beginning with a single product 11 years ago (as an aside, anyone would like to take a guess what that first product was?) And surprisingly enough, we still ship that product, and have a strong base of loyal customers.
On the future of Zoho, there is only one assurance I can give: we will keep trying harder to offer the very best in online applications. We have a very passionate engineering team here and we love to come to work everyday.
Thank you again, Dan!