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On Target: Zoho’s Raju Vegesna on Keeping it Simple for SMBs

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Zoho is something of a anomaly in the cloud software space. Privately held, India-based Zoho has never raised a dime of outside money and it competes with some of the giants of the cloud, think Salesforce, Google, GoDaddy, etc. So how does Zoho break through and set itself apart?

Part of the answer comes from Zoho’s embrace of the “business operating system” as its core go to market philosophy. And the company eats its own cooking. The 5,000-person software company operates almost entirely on its own software.

We used Zoho’s recent announcement of two new products plus an update to its website builder to reach out and ask for an interview to learn more about the company and its approach to the SMB market. The interview with Zoho’s Chief Evangelist Raju Vegesna is featured in our latest On Target podcast.

Zoho’s go to market strategy is based heavily of offering businesses (80% of its customers are SMBs) an integrated suite of tools at an attractive bundled price, assuming that businesses don’t want to deal with multiple business applications, let alone get the various apps to communicate with one another.

Zoho isn’t alone is pursuing this approach. DexYP’s Thryv platform, for example, is banking on SMBs wanting someone to pull all the various marketing related apps together into a single integrated platform. GoDaddy detailed to us in a recent podcast how it envisions a guided self-purchase platform that will assemble integrated packages of cloud services ranging from domain to email marketing to accounting.

In our conversation, Vegesna compared shopping for cloud tools to buying a cable TV subscription.

“You don’t purchase a subscription to each cable channel,” Vegesna said. “You buy the one subscription. Why can’t software be that way?”

Of course, many consumers bristle at having to take ESPN when all they want is CNN and Bravo. Similarly, a notable minority of SMBs would rather pick and choose the apps they use to run their businesses. Vegesna said Zoho accommodates these businesses as well, allowing customers to take free versions the software and not requiring them to buy packages. But he said the lack of integration among these apps eventually drive SMBs to integrated solutions.

“Over time they will notice the complexity of managing multiple, disparate applications,” he said. “Using two applications is like juggling two balls. Making sure they work together harmoniously is a challenge. When you bring in a third application, you introduce a third ball. Complexity increases. Imagine trying to integrate 10 applications. That is when an integrated suite starts to make sense.”

The podcast covers other topics as well, including the generational impact on business cloud adoption, the importance of having free versions of Zoho software, competing with tech giants like Salesforce and more.

Many of the themes of this interview are aligned with research being conducted by the LSA’s Tech Adoption Index business intelligence service.

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