Zoho looks to compete with Microsoft, Google in India

With new technologies increasingly finding acceptance from Indian businesses, Zoho, a home-bred cloud-based business operating system, is set to give competition to Microsoft and Google in the country.

Since its inception in 1996, the company has focussed on the US.

But on Wednesday, it launched Zoho, where Indian companies can access their suite of applications to run their businesses.

The development comes at a time when several global technology giants have committed to have local data centres to meet regulatory norms, get higher acceptance and penetrate further.

Like some of the large global companies such as Microsoft, IBM, Oracle and Google, Zoho offers email hosting, document management, office suits, product management, and customer relationship management for companies.

The company currently has a little over 10 million users globally. “Indian users are now opening up to experimentation and trying new things.

With new businesses coming up, users are no longer sticking to old ideas or traditional offerings. That is the reason we have decided to increase focus on India now,” said Sridhar Vembu, founder and chief executive officer of Zoho.

“None of the new companies that are coming up in the US are using traditional options like Microsoft anymore; and I mean almost 100 per cent of them. However, Indian users have so far stayed with the old offerings,” he said.

To attract users in the Indian market, which currently accounts for less than five per cent of Zoho’s total users, the company is offering free business-class email accounts and free access to document management application for up to 25 users in a company.

Typically, a company spends around $50 (Rs 3,000) per year per user on getting the offerings that Zoho is offering for free from Microsoft, while for Google the cost could be in the range of $50 to $70, Zoho said.

The aim is to bring on board small and medium sized companies that would help the company in its “ladder strategy” of starting with small and then going to bigger clients.

In the US, Zoho gets close to 80 per cent of its revenue from small companies, while the remaining comes from large ones.

Zoho will also allow users to get domain names and build websites for their businesses free of cost, as part of its launch offer.

Getting a domain name for a website generally costs Rs 200-600, while development cost would depend on the design specifics.

Zoho is a bootstrapped software product start-up that started operations when India was known only for its information technology (IT) services capabilities and the start-up trend had not reached local shores.

So far the company stayed away from India as a market due to low penetration of internet bandwidth, that is mandatory for using its cloud-based offering, Vembu said.

“India is going to be a major battle ground for all major players that provide business operating systems,” Vembu said.

“The reason we are choosing to expand in India now is because our product require strong internet bandwidth, which has developed in India in the recent years.” As it looks to expand its user base in India, Zoho will also be setting up a local data center in Chennai by March 2015.

The company currently has two data centers in the US and is in the process of setting one up in China.

Besides setting up a local data center, which will cost Zoho “a few million dollars”, the company is in the process of moving its office to a 28-acre campus in Chennai.

Despite the aggressive expansion plans, Zoho will stay away from getting any institutional funding, Vembu said, calling venture capital funds “drug dealers” who get entrepreneurs addicted to financing.

The Zoho Mantra

Set up by Indian engineers in 1996, Zoho offers a suite of applications such as email hosting, document management, office suites, product management, and customer relationship management for corporates

The company currently has about 10 million users, most based in the US.

Globally, Zoho competes with Microsoft, Google and Salesforce.com

As the company looks to get inroads into the Indian market, it launched Zoho.in, which offers a suite of applications for Indian companies to run their businesses on Zoho is offering the package, free of cost, to 25 users in every customer company

Zoho will also allow users to get a domain name and build a website for their business free of cost