How a Cancelled Project at StorageTek Led to Zoho CRM

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I have never shared this story in public before, but I wanted to do this after reading Hank Williams’ post (via Hacker News) on race in Silicon Valley. My post is not about race, but it is somewhat related, as you will see below.

First a bit of history. In 2003, our company’s only business was network management software. Our main product at that time was Web NMS, which continues to be a successful and profitable division for us to this day, but at that time, it was the only product line we had. Zoho was not yet born, in fact, we had not even conceived of the name yet. Web NMS had many large equipment vendors as customers, and among them was StorageTek, a multi-billion dollar back-up & recovery products company, which was later acquired by Sun. After a comprehensive evaluation over several months, StorageTek chose our Web NMS product to build remote monitoring capability into their storage equipment, and they also wanted us to set up a team to customize the Web NMS so it could talk to their equipment and provide the specialized reports needed. This project began in 2003, and it was going smoothly. We had a team of about 10 engineers working on this project. We had reached a stage of trial deployment in a few customer sites.

That was when they had a big management change at StorageTek. The Vice President in charge of this project was replaced with a new person. One of the first things the new VP noted was that Web NMS came from an Indian company. Just on that basis, he instructed his purchasing people to terminate the contract immediately and award the contract to another company. The purchasing person, who shared the reason behind the termination with us, felt it was a massive waste of resources, but he was overruled. In fact, because the termination was for no fault on our side, they paid for all the deliverables, even though they were not going to use any of them.

It was sometime in August 2003 that we were notified of the contract termination. It was abrupt – as I remember it, it was on a Thursday we were notified, and they told us we should just stop the project right-away and yes, we could throw away the code. Our team, which was working hard on this project, was devastated. I assembled our team and told them to take the Friday off, and come back fresh Monday. I promised there would be an interesting new challenge awaiting them Monday.

During that year, two threads were running in my mind: how to diversify the company from its dependence on a few large customers like StorageTek, where sales cycles were very long, and decision making was often very political, something we got a perfect demonstration of. Second, I was also thinking about the emerging software-as-a-service market. We were customers of Salesforce, and while I liked their product delivery model, I felt the product itself was massively overpriced. As I analyzed Salesforce, I felt their high price was due to their business model bloat i.e overspending massively on sales and marketing. As a software engineer, I felt we could build a better product and as an entrepreneur, I felt we could cut the bloat in the business model and offer the product at a more affordable price. From my perspective, all this had the added merit that we would target small and mid-sized customers first, which would let us avoid the long sales cycles and the politics. That was just a thought, an idea, without yet a plan of action.

When StorageTek terminated our contract, that thought just crystallized. On Monday morning, I called a meeting and told our team “You are now our on-demand CRM team.” The engineers were incredulous. One of the lead engineers let out “Sridhar, we know nothing about software-as-a-service or about CRM” – I said “Well, you will know soon!”

Today, Zoho CRM is the fastest growing part of the Zoho suite, it is nicely profitable, and it is starting to give Salesforce a run for their money. Zoho CRM also paved the way to our emergence as one of the most comprehensive suite of business applications in the cloud. I guess we should thank StorageTek.

Back to StorageTek – the company they selected to replace us collected a few million dollars and never really delivered on that project. The ultimate irony was that they called us a couple of years later to help them with this project again; needless to add, we declined.

There’s a customer story behind every statistic

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Get your processes in place, and then you can truly take
advantage of CRM.


It was the theme we kept hearing again and again at the CRM
Evolution Conference in New York City earlier this year. If you’re going to compete, you have to
move beyond just operationalizing your process.


One way to truly improve processes is with more and more
analytics. Each analytic has a story behind it. Why is a certain statistic
going up or down or not changing at all? There’s a reason for that. And what
you’re ultimately trying to do is connect those stories to customers, explains Aaron Cano, VP of Marketing, Operations, and Planning for

FreshDirect
, an online grocery store for
fresh produce delivered to your door.

Watch our interview with Cano for more insight on how to
uncover those stories!

Can a cloud-based CRM system reduce “technical debt” of constant upgrading?

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Do you ever get bogged down by your software? Is the management
of the software itself becoming more taxing than actually using it for its
purchased intention?


At the CRM Evolution Conference in New York City, I got a
chance to chat with Alex Eldridge, Director of Project Management for

SofterWare

who has been taxed with the project
of finding a new CRM solution for the company. They are currently using the
desktop-based CRM/contact management solution, Goldmine.


I chatted with Eldridge about his process of what he is
looking for in a CRM solution. He boiled it all down to these four criteria:








  • Reduced complexity
    :
    Systems are currently too difficult to manage. There is a major technical debt
    of upgrading systems.








  • Less burdersome change
    management
    : Changes in browsers and operating systems have become a source
    of failure.








  • Less specialized
    knowledge
    : Instead of locking the understanding of a system into a few
    people’s heads, Eldridge is looking for simpler systems for which development
    can be extended to the end users. He wants them to be empowered to do more on
    their own.





  • Improved quality of data
    :
    Does not want data in different formats where they are out of alignment. Looking to
    create greater synchronicity on data.

If C-L-O-U-D were an acronym, what would it stand for?

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We asked. You answered. Most interesting responses from Facebook and 



Twitter
:




“Collaborate Live On Unsurpassed Development”
Mark Brutus Thurman




“Computing Leveraged Online for Users Devices”
WireSpeed Systems






“Computing Levitated Out of yoUr Desktop





Emil Chackot






“Computer Located OUtside Datacenter”
@skipbogsan




“Come-Lets-Organize-Upload-Distribute / Download” 
@warriorvibhu






And the funniest of them all…


“Children Like Oranges Upside Down”
Jack Kerr








Got any other interesting answers to contribute?  Leave us a comment here.

Three successful techniques to engage “one-on-one” with visitors of your content

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You’ve got tons of content, and people are consuming it, but
you’re not talking to them at the point of consumption, which would be the best
time to launch them through your sales pipeline.


At the CRM Evolution Conference in New York City, I chatted
with Kate Leggett, a Senior Analyst with

Forrester
.
She covers the area of customer service and call center processes serving
business process professionals.


In our interview, Leggett offered three techniques for
connecting readers of your content with your CRM system:










  1. Authenticate site access
    :
    If you require people to log in to get access to your content, you can see from
    their session history the pieces of content they looked at and interacted with.









  2. Pushing a chat box
    :
    If you don’t have someone logged in, you’re going to have to reach out to
    connect. If they delay on a content page push a chat box notification and ask
    if they have any questions.




  3. Make contact really easy
    :
    Around every piece of content, make connecting via phone, email, or chat
    extremely easy and encouraged.

Today, SMBs don’t need a dedicated anything to deploy CRM

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Three or four years ago SMBs were apprehensive with CRM,
said Brent Leary, co-founder and partner of CRM
Essentials
.

CRM was comprehensive and complex and it required someone
who could manage servers and software upgrades. SMBs rarely could afford a
dedicated IT expert to install and manage these services. Today it’s far more
accessible and affordable, said Leary.

In addition, traditional CRM was originally seen as needed
for operational reasons, not necessarily to get new customers, Leary mentioned.
With the introduction of social CRM, SMBs are becoming far more interested.