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Sunday, 25 May 2008 16:32

Zoho set to open Australian office

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Google Apps rival Zoho is planning to open an office in Australia and is looking for additional resellers for its suite of business applications provided online under a software-as-a-service model.

Sridhar Vembu, founder and CEO of Zoho's parent company AdventNet,  told iTWire at last week's CeBIT show in Sydney that the company wanted to provide a local support base and also to tap into feedback from some of its more enthusiastic users.

"Our early adopters are very important to us - they almost become part of the company," he said. "A year ago we invited one of them into our Chennai office [where the R&D is conducted] and he spent about a month advising our team."

Zoho already has representation in Australia through Bellridge - a software distributor based in Milsons Point, Sydney, which has been representing AdventNet's pre-Zoho products - helpdesk and network management software aimed at the small and medium business market - for several years. However, Vembu said he was looking to recruit more solutions and integrations partners locally.

The full suite of Zoho SaaS offerings comprises more than a dozen applications. However its flagship offering, and the one being promoted at CeBIT is ZohoCRM, positioned to compete with and undercut market leader Salesforce.com. Vembu claims that ZohoCRM is significantly cheaper than SalesForce. "Our pricing is very attractive, certainly compared to SalesForce. They charge about $60 per user per month, we charge $12 after the first three who are free. So if you are a 10 person operation the difference is enormous."

According to Zoho's sales literature, a 25 user organisation could save $US16,000 per year by using ZohoCRM compared to the cost of Salesforce.com.

Zoho's business model is to offer all its applications free for individuals and to charge for multiple users. "We are going to keep the consumer versions free, even the CRM for up to three users. It's the way people can get in the door and find what Zoho is all about," Vembu said.

Vembu countered suggestions that enterprise customers might be wary of entrusting a relatively small organisation with a key business application like CRM for fear that it could either be swallowed by a larger organisation, or could fail. "We have been in business for 12 years. We are still privately owned and we are profitable and we intend to be in business for a long time." He added: "Salesforce.com tried to buy us but we refused. We are not tempted by short term gain."
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Zoho is up against not only Salesforce.com but against the industry's biggest: Google with Google Apps, and increasingly Microsoft. However Vembu said that, in a market growing as rapidly as SaaS, there was ample scope for a company like Zoho. "This is a big enough market that a focussed player can make a good showing, This whole market is growing at 50-60 percent per year. Just look at Salesforce.com revenue [which is publicly available].

While Zoho sells direct to end users, Vembu said its software also formed the basis of SaaS offerings from other players who modified the user interface to suit their own market focus. One such is Intelliworks. "It's a company that offers a CRM system to universities. It is really an alumni management system " Vembu said. "It is used by top universities all over the world and it is entirely based on Zoho."

One application still missing from Zoho's portfolio is mail. Zoho Mail is still in private beta, but Vembu said a commercial launch was due in about one month and would be incorporated into a planned Zoho business suite of applications. "This is definitely something users have been waiting for before they will formally adopt Zoho within their organisations."

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