Happily Bootstrapping: Zoho CEO Sridhar Vembu (Part 4)
Check other articles in the series...AdventNet provides a safety zone from which to launch Zoho, which is why I was looking to gain an understanding of the revenue and cash position of the company. While competition will be stiff from Google and Microsoft, as well as other CRM and group meeting companies, Zoho seems to have a unique philosophy of ultimate frugality. Read on!
SM: Before we go into the details on the Zoho story, let me make sure we get on the same page. What is the revenue level from the OEM business and what is the revenue level from Manage Engine? SV: I would say OEM accounts for 30% of our revenue, Manage Engine, which we started in 2003, is now accounting for 70% of our revenue. Zoho is really small right now, and there are only two products which are even priced.
SM: Can you position Zoho for me? SV: Zoho is an on-demand application offering. We are offering a competitor to Microsoft Office on demand, meaning online. We also have a CRM and an application creator online. We just call it the ability to work online. That is our vision - to provide a comprehensive suite for a mid-sized customer. We want mid-sized customers to be able to have their IT needs met online.
SM: This is a crowded field. On one hand, you have Microsoft Office and on the other you have Google coming out with their competing suite. With CRM you have Salesforce.com, Rightnow. With Project Management, you have eProject, Webex, Citrix, and all of these guys are going after the same space. SV: There are obviously going to be a lot of players, and it is obviously going to be a huge market. There are going to be tens of billions of dollars available in the market.
SM: What is your strategy – different offerings, different pricing? SV: There are two things we are playing on. The first is to have the most comprehensive offering. If you look at our suite, we have a full comparison to Microsoft Office. All of these differentiate us from each of the other players. SalesForce only offers CRM, which they are trying to combine with an application creation functionality. We already have it. That is one differentiation. Our main strength is that we have an incredible engineering team. SalesForce has maybe a 100-strong engineering team, we have 600 engineers in our office in India.
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