Larger businesses see value in Zoho for their complex needs: Praval Singh

As our products matured, larger businesses sought our solutions for their complex requirements. This led us to establish dedicated teams with expertise in serving large companies. We also developed an interoperable ecosystem, enabling easy integration with third-party applications through APIs, connectors, and partnerships.

 

To cater to larger enterprises, we launched the Zoho Marketplace, which boasts over 1,800 extensions and garners 30,000 monthly installations. In 2018, we introduced the EBS (Enterprise Business Solutions) team as trusted partners, offering assistance in digital transformation projects, from consulting to implementation and training.

 

Our focus lies in helping large enterprises streamline and optimise their technology stacks, addressing challenges such as integration, data silos, scalability, and flexibility. By empowering organisations to overcome these obstacles, we have played a crucial role in supporting their growth and progress over the years.

 

Q. From Zoho's perspective today, describe the typical large enterprise that's become currently your sweet spot.   

Our upmarket momentum is gauged by the size of our customers’ employee base, categorising over 250 employees as mid-market and over a thousand as classic enterprise. This segment includes both mid-market and enterprise customers, with regional variations. Some regions emphasise mid-market, while India shows a significant presence of enterprise customers adopting Zoho.

 

To solidify our position in the upmarket, we adopt a go-to-market strategy that highlights our capabilities, establishes local teams for account management and sales, and fosters partnerships with system integrators (SI). Collaborating with SI partners allows us to combine expertise effectively.

 

In the SaaS business, larger customers mean more users and increased complexity, resulting in higher revenue per customer. Our upmarket segment has achieved an annual recurring revenue (ARR) growth rate exceeding 65 percent globally and in India over the past three years. Notably, the upmarket segment now contributes over half of our business in India, and a third of our entire business.

 

Despite our focus on upmarket customers, we remain committed to serving small businesses, startups, and MSMEs. Our extensive expertise and product offerings cater to their specific needs, with initiatives like Zoho Begin tailored for small businesses.

 

To maintain balance, we have dedicated teams focusing on upmarket momentum from go-to-market and capability standpoints, while simultaneously continuing to serve the SMB market actively.

Also read: Why the slowdown is good for India's SaaS companies

 

Q. Tell us about what’s been happening with respect to how your customers are using Zoho products.

In the upmarket category, we are experiencing significant traction in customer experience, employee experience, and custom solutions. These areas align perfectly with the needs of large companies. Additionally, enterprise collaboration and productivity tools such as email, calendar, and video conferencing are gaining momentum. Zoho Expense is also well-received on the finance side.

 

We currently have 55 products that independently contribute to our enterprise momentum. What sets us apart is the breadth of our product offerings and how we tailor solutions to meet specific needs. For instance, popular Indian brands like Big Basket and Tata Play Fiber have customised their ERP and utilised our HR suite, respectively, before adopting the comprehensive Zoho One suite.

 

Our customer portfolio is diverse, spanning sectors like BFSI, manufacturing, retail, FMCG, pharmaceuticals, and IT. This broad range of sectors is a testament to the effectiveness of our suite of products in addressing various business functions and creating tailored solutions for our customers.

Q. So would you say now some of your largest customers could be in the tens of thousands of employees?

Yeah, in fact we used to joke that the largest customer of Zoho Suite is Zoho Corporation itself. We were at about 8,000 employees right before the pandemic. And that’s when we also started to figure out and find that some of our larger customers are tens of thousands of employees. Some of our largest seats that we’ve sold is like tens of thousands of seats.

 

Companies like IIFL, which is a large financial sector organisation from India, runs on Zoho One for several of their operations across customer experience, employee experience and productivity and collaboration. So we have now a lot more customers that are much bigger than us with, like you said, tens of thousands of employees.

 

And typically what happens is they may start with one team or one product, and slowly they may see value in going for more. The Tata Fiber example that I gave, they started with one HR solution and then expanded to Zoho One. Similarly IIFL started with one product, but today they are one of the large Zoho One customers.

 

Q. Give us a sense of type of tech company Zoho is evolving into.

We have always positioned ourselves as a technology company rather than just a software vendor, with a strong emphasis on research and development. Our pride lies in being more focused on product and engineering rather than sales and marketing.

 

Customer-centricity, particularly in terms of privacy, is a core value for us, and we go to great lengths to protect and preserve user data. Unlike many vendors, we don’t have any third-party JavaScript running on our products or website, and we operate our own data centres.

 

One of the challenges we observed for large enterprises is the high cost and time associated with implementing licensed software. Our goal has been to reduce implementation costs and shorten the runway, providing agility and organisational change to meet evolving needs. Through our platform, which includes low code, no code tools, and serverless capabilities, we aim to minimise the learning curve, accelerate implementation cycles, and maintain affordability.

 

In the current economic environment, there is a growing opportunity for CXOs and CIOs to reconsider and optimise for better value. We are seeing traction and growth numbers in response to our ability to offer shorter implementation cycles and affordable solutions.

 

We continue to work with various sectors, including large enterprises, government entities, and public sector undertakings, to address their technology needs. India, in particular, presents significant opportunities for us to provide solutions that cater to specific requirements.

Q. Tell us about your biggest challenges at this point, and what are the top priorities over the next 12-18 months?

The current economic environment poses a significant challenge for us and other service providers. We are in the midst of a major economic shift, and predicting its outcome is uncertain. Despite this, our business has been growing reasonably well, although not as strongly as last year.

 

Looking ahead, our focus is on capitalising on the market momentum we are experiencing. We aim to strengthen our position as a proudly ‘made in India, made for the world’ company with our compelling software suite. We recently announced new tools like Zoho Directory for workforce identity management and Zoho OneAuth for multifactor authentication, which will help streamline processes for mid to large-sized companies. We will continue to invest in product building capabilities.

 

On the go-to-market side, we are expanding partnerships with system integrators and establishing local teams worldwide to serve our customers, not just in acquiring new business but also in account management. We take pride in witnessing small businesses grow with us and larger enterprises recognising the value we offer in meeting their complex needs.