Zoho Expands Its Ambitions On Multiple Fronts

After a four-year hiatus due to COVID-19, Zoho’s Zoholics event was back in Austin, TX the first week of May, featuring an analyst track that I attended.

The dominant takeaway is that Zoho, which already sells more than 60 business applications in 160-plus countries, is expanding on multiple fronts. The company is doubling down in the mid-market (which it defines as companies with 100 to 1,000 employees) with new services and solutions. It’s also zeroing in on solopreneurs and freelancers with a slew of new offerings — all while fortifying its commitment to its traditional small businesses (1 to 100 employees) stronghold.

Simultaneously, Zoho is broadening its already extensive product and technology footprint. The company introduced a new privacy-centric browser (Ulaa) and new generative AI integrations and extensions.

I’ll summarize each of these, and share my views on Zoho’s far-reaching ambitions.

Moving On Up

Zoho cut its teeth in the small business market, serving customers primarily through a direct, inbound sales approach. But it has also been making steady progress in the mid-market, enjoying 65% year-over-year growth over the past year. This segment now represents one-third of Zoho’s business.

For the past couple of years, it has been building an ecosystem to serve mid-market customers’ more complex needs. So, I was not surprised that  Zoho is sharpening its focus on this market and investing more to develop and improve go-market services, product extensibility, usability, and packaging for it. Zoho is gathering input from its existing mid-market customers to inform adjustments to its offerings, internal processes, service levels, and more.

For instance, Zoho is creating tailored sets of mid-market offerings such as one that includes Creator, Desk, Analytics, and CRM.  It is also integrating Zoho DataPrep with Zoho CRM to make it easier for users to migrate data from third-party CRM systems.


Zoho is beefing up its professional services and account management capabilities as well. It is expanding skills sets in its own Enterprise Business Solutions (EBS) organization to meet specific industry and geographical requirements, and opening new regional offices around the world to support account management. It’s also expanding multi-currency payment capabilities to unified procurement and multi-currency invoicing.

In addition, Zoho is strengthening partnerships with system integrators that work with mid-market and large companies (e.g., Tata Consultancy Services, Deloitte, PricewaterhouseCoopers, Infosys, Tech Mahindra, Hexaware, and Wipro) to strengthen its platform, develop industry-specific solutions, and create best practices.

Zoho emphasized that it won’t be targeting new customers until it has built out more of what mid-market customers need. Probably a good thing, because it will need to build an outbound marketing strategy to compete against the many vendors that serve mid-market customers across the business application spectrum.  Zoho also needs to boost brand awareness to gain credibility and get into consideration more often.

The company noted that while it does have some big customers with more than 20,000 employees, it is not currently targeting large enterprises (although the work it’s doing in the mid-market can potentially pave the way to a large enterprise play). Since most of the system integrators that Zoho is partnering with are more likely to appeal to larger companies, Zoho must also develop a partner strategy tuned to these customers. With solutions that range from the front to the back office, and everything in-between, building a strong partner ecosystem for different types of partners that play in each solution won’t be easy.

New Solutions for Solopreneurs and Small Businesses

At the other end of the spectrum, Zoho announced four new solutions to help solopreneurs and small businesses to start, build, and run their operations.

These solutions draw upon existing functionality in the Zoho platform and are designed to provide essential tools in an easy-to-consume and integrated manner. They include:

  • Zoho Start helps businesses file the legal documents and paperwork necessary to establish a business. Users select the type of company they want to set up, and which state they want to set up in. Zoho takes care of getting and filing a tax ID for them. Start is currently in beta, but once this wraps up, Zoho will offer Start customers pre-built integrations to selected Zoho products, including Zoho Books for financial management; Zoho Domains, to create a domain and business website; and Zoho Mail, for business email. Start will also offer telephony services via integration with Zoho Voice.
  • Zoho Solo is a mobile-first application for freelancers and solopreneurs. It offers a unified system to track customers, manage finances, and organize tasks across multiple clients. It is kicking off with availability now in Texas and California, with other states in the pipeline.
  • Zoho Publish publishes business information on listing services such as Google Maps and review sites so businesses can get found by potential customers. Users can monitor and respond to customer feedback, and get insights about things such as inbound requests, comments, visits, reviews, etc. to improve business visibility. Zoho Publish can be utilized by businesses of all sizes and is initially available for Zoho One customers.
  • Zoho Tables, in early access, addresses the fact that spreadsheets are the first tool that many small businesses use —and too often get stuck on. Tables is a stepping stone to move from spreadsheets to business applications. It combines the familiarity of spreadsheets with the functionality of applications for a variety of business tasks.

This is an enormous — and to a large extent, underserved — market opportunity. Nearly 5 million businesses are created in the U.S. every year (with this number almost doubling since the pandemic), and 80% of existing small businesses in the U.S. are owned by a single person. And that’s just in the U.S.

Zoho’s strategy to knit together a comprehensive set of offerings is a good one, but it faces a sea of competitors in each area. For instance, Zoho Start will need to go head-to-head with vendors such as LegalZoom and ZenBusiness. Zoho will offer Start to its Zoho accounting partners to sell to their customers who are starting a business, but as a newcomer, Zoho will also need to make a strong SEO push here to get on solopreneurs’ radar.

It should be easier to ramp up Solo. Many freelancers and solopreneurs manage their businesses from a smartphone, especially in economically developing countries (e.g., about 50 million people in India use laptops and desktops, compared to about 500 million smartphone users). Manage customers, finances, and tasks from one smartphone app should be a winning value proposition for them.

But even though these applications are designed to be easy to use — and integrated – many solopreneurs and small business owners will need guidance to navigate and get value from these assortment of services. Zoho will need to create services to guide them.

Entering the Browser Wars

Zoho’s respect for user privacy runs deep: it does not use an ad-revenue model in any part of its business, including its free products. It also owns and operates its data centers, giving it end-to-end oversight of customer data, privacy, and security.

This commitment to privacy led Zoho to create Ulaa, a privacy-centric, “anti-surveillance” browser. Ulaa does not track or share user data with third parties and prohibits DNS prefetching so data cannot be cached. Ulaa blocks motion sensors that track mouse movement and clicks; prevents third-party trackers from accessing user data; and blocks unwanted ads, notifications, and pop-ups.

Ulaa also supports privacy customization and different browser modes. For example, Ulaa’s Dynamic Mode Switching lets users toggle between different modes for personal, work, developer, and kids’ use, each with different restrictions. Ironically, Ulaa also has an “open-season” mode, which turns off all protections and provides dire warnings to users about privacy and data risks.

Ulaa comes with integrated productivity tools, including Zoho Notebook, a dedicated notetaking space for users to jot down ideas, reminders, or other information without leaving their browsing session. One that I particularly like is Annotator, which allows users to screen capture a page or a page section, add annotations directly to web pages and images, and easily share edits and notes.

Zoho’s decision to get into the browser market surprised me, as it seems like going head-to-head with Google, Microsoft, and Apple in the browser wars is daunting. However, Zoho is first and foremost an engineering company, and one more concerned about ensuring user privacy than most. I think that Zoho saw the opportunity to build a privacy-centric browser that would also give users some innovative new productivity features — and just couldn’t resist putting its engineering talent to work.

Integrating OpenAI with Zia

Zoho has been investing in AI for over ten years. Its internal AI engine, Zia, has been available since 2017.

At the event, Zoho announced that it has launched ChatGPT for Zoho, merging it with Zia so that customers can integrate ChatGPT’s public information and intelligence with private, internal data. Zoho is starting with 13 ChatGPT extensions and integrations in Zoho Desk, Social, Writer, Mail, Assist, SalesIQ, and Landing Pages, and has more in the pipeline. Customers can use their existing OpenAI account API key to turn on these capabilities within Zoho applications.  

The move to integrate ChatGPT (and soon, other generative AI tools) is expected in an industry that has become consumed with this technology. But Zoho is also developing its own proprietary Large Language Models (LLMs) and intends to bring generative AI technology in-house, and build an alternative with better controls and higher standards for data privacy. Other potential areas for innovation could include more transparency around data sources, assumptions behind algorithms, and providing users with more in-application education about the limits of AI for particular use cases.

Perspective

The Zoholics event showcased Zoho’s expansion on multiple fronts. Any one of its new initiatives is a big deal: developing a mid-market ecosystem and services for a myriad of business solutions; creating a new, privacy-centric browser; building a comprehensive and integrated set of solutions for solopreneurs; or developing its own generative AI technology. And an even bigger deal because Zoho is building these to serve the global market.

Which leads to the obvious question: Can Zoho exponentially expand its scope and simultaneously develop the depth and polish that each new initiative requires, and at the same time, continue to refine and integrate its existing 55+ applications?

Zoho has always danced to a different beat than most of its software competitors. Its generous freemium model, resolute decision to stay private, and conservative (compared to its peers) marketing spending differentiate it. The vendor has proven its way works, however, growing into a billion-dollar-plus company with more than 90 million users across more than 600,000 global businesses.

Engineers make up 60% of Zoho’s employees, providing it with a deep bench to turn its visions into reality. And because it is not beholden to outside investors, Zoho can take the long view. Instead of looking for overnight success, its looking to build and strengthen offerings over time.

However, each area presents a different set of challenges and opportunities.

  • Zoho’s new initiatives for solopreneurs, freelancers, and small businesses are a natural extension of its small business stronghold, and it is fairly well-positioned to capitalize on these opportunities.
  • The vendor has a heavier lift ahead of it when it comes to accelerating its push upmarket. It will probably need to recruit senior-level services, marketing, and sales expertise from outside its current ranks, something I haven’t seen Zoho do too often.
  • With its solid engineering bent — and bench — Zoho is likely to achieve its generative AI goals. Since this is still in the early going, the opportunities for Zoho to innovate and develop a more secure, accurate, and useful generative AI are almost limitless.
  • Zoho will have a tough slog in the very mature search engine space. While Ulaa has a lot to recommend it, it’s hard to imagine that it will threaten the leading browsers.

However, it’s too early to place bets on any of the odds of any of these disrupting the status quo. Zoho is a unique and innovative company, and it will be exciting to see how it executes going forward.

Note: Zoho is an SMB Group client

© SMB Group, 2023