On this episode of the Six Five On the Road, we explore the comprehensive impact of Zoho on businesses ranging from SMBs to large enterprises. Join our hosts at Zoholics in Austin, Texas – The Futurum Group’s Lisa Martin, Cory Johnson, and Keith Kirkpatrick with Moor Insights & Strategy’s Robert Kramer to delve into Zoho’s suite of products and services, and explore how they cater to diverse business needs.
Their discussion covers:
- The evolution of Zoho from a software company for small and medium businesses to a full-scale enterprise solution provider
- An overview of Zoho’s suite of applications and their integration capabilities for businesses
- Case studies highlighting real-world applications of Zoho’s products in different industry sectors
- Zoho’s role in digital transformation strategies for businesses looking to modernize
- Future outlook and expansions plans of Zoho in the context of emerging business technologies
Learn more at Zoho.
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Transcript
Cory Johnson: We’re back. It’s the Arlington, Austin, Texas Six Five on the Road, sort of on the road, maybe just down the road. We’re calling it The Six Five on the Road, and we’re joining just the best people to analyze why this company matters, and what questions we might still have. Right, Lisa?
Lisa Martin: We have a couple of our own here. We’ve got Robert Kramer, the vice president and principal analyst at Moore Insights & Strategy. Keith Kirkpatrick also joins us, research director from Futurum Group.
Cory Johnson: The pride of Long Island.
Keith Kirkpatrick: Thank you.
Robert Kramer: Thank you.
Lisa Martin: The Pride of Long Island and musician by now…
Keith Kirkpatrick: That’s what they say.
Lisa Martin: Excellent. So guys, last day and a half or so when I flew down here, I was sitting next to one of the analysts from the cohort year who was at a very different conference. I said, “Tell me how much.” Because you’re going to hear a lot about culture and philosophy from the CEO rather than-
Cory Johnson: Oh, she gave you that?
Lisa Martin: Oh, but she did. And that is exactly what started to come to fruition from eight o’clock this morning on.
Robert, starting with you and then Keith, to you, what’s your take on Zoho from the SMB all the way up to the enterprise perspective, and how it’s been evolving?
Robert Kramer: Well, it’s a great question because before Zoho coming out here, I really did not know a tremendous amount about them, just like you said. We are used to Salesforce, we are used to some of the other applications, Microsoft Dynamics. We are also used to these big enterprise applications, SAP and Microsoft and all the other ones, so I was really pleasantly surprised. They have a cult following, they have great application within the Zoho program with the platform that they have, and it’s a great team that’s running it. So I was intrigued, to say the least.
Lisa Martin: Keith, what about you?
Keith Kirkpatrick: Sure. Well, I had actually been at Zoho Day earlier in the year, and the interesting thing was, they took us down to McAllen, Texas, and-
Cory Johnson: Where’s that?
Keith Kirkpatrick: It’s about, I don’t know, Texas is huge. It’s way far south here.
Cory Johnson: South of here.
Keith Kirkpatrick: What’s that?
Cory Johnson: Everything in Texas feels an hour apart.
Keith Kirkpatrick: Yeah. By plane.
Cory Johnson: Yes, that, too.
Keith Kirkpatrick: But the interesting thing about McAllen, Texas, this is where Zoho has set up an office, and instead of going to, say Silicon Valley, or going to New York, Chicago, or name any big metropolitan city, they have actually gone out and chosen these areas where they have a very low cost of living, so when they hire people there, they can actually do things like afford a house, afford a relatively new car, and the idea is that there’s so much untapped talent that is out there that other companies are avoiding. They’re trying to tap into that and make it so if they’re successful selling their software-
Cory Johnson: You know what it reminds me of? It just hit me, the late Tony Hsieh, who ran Zappos, who started Zappos, and Tony would talk a lot about the happiness of his employees.
Keith Kirkpatrick: Good point.
Cory Johnson: And I think that Zoho seems to be similarly inspired, not just wanting to find cheaper engineers, but also wanting their employees to be happy employees and have all of the things in their lives and make them happy employees, which will let them sell better and make better products and be better customer service people or whatever.
Lisa Martin: I saw some tweets about that. I still refuse to call it X and posts, but Sridhar Vembu, their CEO tweeted recently about morale, employee experience not being a pro-micromanaging, and then when I saw him on stage this morning, really kind of articulating the same value prop. I was impressed because it’s just not typically what we see from CEOs on main stages, and we all get the chance to see them often.
Robert Kramer: He wants to empower his team. Yes. That’s a great, and I think when you do that, you get results like you were saying, and where they landed with their enterprise, where they built it an hour from here. I think that’s a smart decision because if you go into these big cities at San Francisco or New York, the talent structure there is open. It’s hard to find people and good people to do what you need done. So he’s got a great mission and vision for how he wants to grow the company.
Cory Johnson: Well, as the old joke in New York in banking or in Silicon Valley in technology, your assets go up and down the elevator every day. That’s your corporate assets. Technology has got a different feel to it right now with so many layoffs in the last couple of years. But these guys also boast that they have never ever had layoffs. Right?
Keith Kirkpatrick: Well, that’s really admirable.
Cory Johnson: In decades. Yeah.
Lisa Martin: Yeah, 28 years.
Keith Kirkpatrick: If you think though, also they take a very strong interest. They have a program where they will go into an area and they will set up a school for people to come and learn how to code. It doesn’t cost them anything, and at the end, they don’t have to go work for Zoho. They can go wherever, but they believe so strongly that they’re doing something for these people to help them. That the amount of loyalty is really, really amazing. And if you think about the tech industry, and like you said, layoffs are common. They are just doing the right thing in terms of generating a loyal workforce, and in turn, they are being loyal back and not cutting back people when things might get a little tough.
Lisa Martin: With all the organizations the two of you have covered for so long, how unique is that?
Robert Kramer: I think it’s extremely unique to train people that can come to a class to learn and then they actually give them a job. I mean, that’s fantastic. I’ve seen a couple companies do that, but it’s not normal.
Lisa Martin: To that scale…
Robert Kramer: Well, to that scale, this is a large company.
Keith Kirkpatrick: Well, the other thing, and of course Sridhar mentioned this today, they are privately held. They are not held with the same standard as a publicly traded company who is operating from quarter to quarter where it’s almost like, ‘Hey, our number 13…’
Cory Johnson: 13, we say the number. Yeah.
Keith Kirkpatrick: So I think they have that advantage.
Cory Johnson: So let’s talk about the comps. You guys both cover a lot of companies. When you look at Zoho, what is the best comp? What are the other ones you got to…
By the way, I know we are at an acronym limit, but comparison is what I mean by comp. But what companies might you compare it to or that they are selling against?
Robert Kramer: Well, they are selling against companies like, enterprise level to do an ERP, which is enterprise resource planning.
Cory Johnson: Thank you.
Robert Kramer: They are going against a NetSuite or a lower-end SAP as a business one application or a Sage. But then they have their CRM, which goes against a Salesforce…
Cory Johnson: Salesforce, HubSpot…
Robert Kramer: All those.
Cory Johnson: And maybe more HubSpot than Salesforce because there’s more focus on small to medium-sized businesses.
Robert Kramer: Correct.
Cory Johnson: Which otherwise we call SMBs, but I’m not going to do that because I’m a better person.
Lisa Martin: Acronym on that six…
Keith Kirkpatrick: There is a fine for the next point.
Robert Kramer: They are trying to control the data for these companies that are the SMBs, the small businesses, and I think that’s a great focus. But we were talking before Keith and I, that these companies get a chance to come into the Zoho family because of the initiative – the cost is low, and that is very appealing. So then when you can…
Cory Johnson: Can you make sense of that? Specifically how much cheaper?
Because we did talk to a few customers and they both indicated that the cost of software is a little bit better, that was why they chose it, but the cost was better and I couldn’t get a sense of how much cheaper…
Keith Kirkpatrick: It’s significant, and I don’t want to get into exact numbers because obviously that varies on what they have. It is not only just the monthly SaaS license cost, but think of…
Let’s say you’re a customer and you go to implement a large CRM that we all know that has a very well known name.
Cory Johnson: You can say Salesforce.
Keith Kirkpatrick: I’ll say Salesforce.
Cory Johnson: And CRM, which is an acronym.
Keith Kirkpatrick: Acronym, yeah. I didn’t want to pay the fine.
Robert Kramer: It is a big fine.
Keith Kirkpatrick: But if you were to pay those monthly license fees plus what it costs you to pay a consultant to come in and customize for you, and we all know that that can be something that’s not something that happens in a week. You’re going to see them there every day for several quarters, if not more. Yeah.
Cory Johnson: I do think, and you probably know this better, but at least looking at the numbers in my model, service revenues for Salesforce are very, very small percentage of software revenues. And going back, comparing it to the Oracle’s or Siebel software of your SAP, this software clearly works. It’s not as difficult to install as a lot of software used to be, but you’re right.
Keith Kirkpatrick: But yeah…
Cory Johnson: It’s a different number.
Keith Kirkpatrick: Salesforce doesn’t necessarily make the service revenue. It’s the independent consultancy that really generate those billings. But I think the interesting thing about Zoho is if you’re a smaller company, an SMB or even a mid-market company, you’re going to be able to go in and say, I would like to check out their CRM, and maybe it works for you. And if it does, then Zoho can turn around and say, guess what? We have 54 other applications covering a number of different functions that are all based on that same platform. So it’ll be very easy for them to quickly migrate and utilize and get all that functionality. And that’s one of their real value propositions.
Lisa Martin: I was going to say stickiness, but last question for you guys on the value prop perspective. It’s so unique. We’ve talked about that. Does it need to change as they go upmarket from the SMB to the enterprise or be maintained as it is now?
Robert Kramer: No, it has to.
Cory Johnson: Or what do they have to change?
Robert Kramer: They have to have more robust features as these companies expand. So depending on what the industry they are in. So manufacturing, building material, healthcare regulations, retail, Point of Sale features, they may or may not have that right now.
Cory Johnson: Finance regulations.
Robert Kramer: Yeah. So there’s a lot of different things that they are going to need to go up that chain. But the one thing that if it’s a small business and they want some features to run everything within their actual industry, this is more of a plug and play that they don’t need the complications with these larger ERP systems and such.
Keith Kirkpatrick: Well, I would say if you are looking at Sales- I’m sorry, got me off talking. Not Salesforce, Zoho.
Cory Johnson: Look I said something nice publicly about my friend Marc Benioff, and that never happens publicly. So, it’s a weird day.
Keith Kirkpatrick: So Zoho, when talking about their enterprise play, they understand that they have a lot of work to do when it comes to changing how they sell because an enterprise buyer is not the same as a mid-market buyer.
Cory Johnson: Correct.
Keith Kirkpatrick: The other thing, and of course while Sridhar mentioned this, he said, ‘it’s great that we’re privately held. We’re not held in the same standards. We could do what we want.’ It does make it that much harder to really kind of get into that enterprise market, where they are going, ‘who is Zoho? What do we know about them?’.
They’re privately held. It’s a little bit harder to get visibility. So that’s a challenge, and then of course the big thing is scalability, robustness, all of that kind of stuff is important to enterprise buyers.
Lisa Martin: Such a fascinating last 24, 36 hours. I think it’s safe to say that we are all probably Zoholics fans by now. I think we need some matching merch.
Robert Kramer: I would love that.
Lisa Martin: Barbecue later.
Robert Kramer: We’d love that.
Keith Kirkpatrick: The hats! The hats!
Lisa Martin: And hats, and hats. Keith and Robert, thank you so much for joining Corey and me. It’s been fascinating getting your perspectives on what you’ve observed as an organization as they’re looking to really go upmarket and the things that they need to be focusing on. We appreciate your insights.
Keith Kirkpatrick: Thank you for having us.
Robert Kramer: Thank you.
Cory Johnson: For Lisa Martin, I’m Corey Johnson. You know who the hell Zoho is now because we’ve been giving you lots of good stuff on them – a fascinating company. We’re glad to be here at Austin, Texas for this edition of Six Five on the Road.
Author Information
Lisa Martin is a technology correspondent and former NASA scientist who has made a significant impact in the tech industry. After earning a masters in cell and molecular biology, she worked on high-profile NASA projects that flew in space before further exploring her artistic side as a tech storyteller. As a respected marketer and broadcaster, she's interviewed industry giants and thought leaders like Michael Dell, Pat Gelsinger, Suze Orman and Deepak Chopra, as she has a talent for making complex technical concepts accessible to both insiders and laypeople. With her unique blend of science, marketing, and broadcasting experience, Lisa provides insightful analysis on the latest tech trends and innovations. Today, she's a prominent figure in the tech media landscape, appearing on platforms like "The Watch List" and iHeartRadio, sharing her expertise and passion for science and technology with a wide audience.
Cory Johnson is the Futurum’s Chief Market Strategist and the host of the Drill Down podcast.
His peripatetic career has seen him in prominent roles as a hedge fund portfolio manager and investor, technology journalist and broadcaster. Fundamentally he’s an entrepreneur -- helping to start media companies such as TheStreet.com, the Industry Standard, Slam (the world’s best-selling basketball magazine) and Vibe. He was CNBC’s first Silicon Valley correspondent and later helped create the TV show Bloomberg West for Bloomberg TV and the radio show and podcast Bloomberg Advantage. He was a senior executive at the blockchain startup Ripple, a portfolio manager for Kingsford Capital and a principal at the Forensic Research Group.
Johnson is also an advisor to Braintrust, C3.ai, Prolly AI, Provenance Bio, Stringr and serves as a delegate to the Episcopal Diocese of California.
Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
