I am a big fan of Zoho. Not just because it relocated corporate headquarters to my hometown of Austin, Texas, but because I find the value proposition of creating easy-to-use, affordable software for a broad range of functions with deep cross-integrations potentially disruptive to the cloud software industry. Consequently, I have followed Zoho for some time and have recently written several articles along the way, tracking progress as Zoho reached the eighty million user mark.
I recently saw a press release announcing 50% year-over-year (YOY) revenue growth for Zoho's Finance Platform, which supports over half a million businesses across 160 countries. Fascinated with this recent news, I was thrilled to talk with Raju Vegesna, Chief Evangelist at Zoho, to understand the reasons behind the parabolic growth of Zoho’s Finance Platform.
Few finance platforms support growing global businesses
Early this year, Intuit announced that QuickBooks products would no longer be available in India. The financial software is a market where prominent vendors are moving out of countries, whereas Zoho is doing the opposite. Why is that?
Zoho's Finance Platform includes solutions for accounting, inventory management, travel and expense management, billing and subscription management, and payroll management. The most popular application on the platform is Zoho Books, a cloud-based accounting application. Zoho Books supports 180 currencies and 17 languages and includes a comprehensive global tax engine that enables country-specific tax compliance.
Supporting Zoho Books across multiple countries, each with constantly evolving tax and regulatory rules is a significant effort.
The key to Zoho's success is due to a combination of three factors: an integrated product strategy with software-as-a-service delivery and a philosophy unique to Zoho called transnational localism – more on that later.
A family of applications that work seamlessly
As the company grows, applications get installed to solve specific business challenges. Eventually, you end up with a hodge-podge of disparate applications and spreadsheets that do not talk to each other. Unfortunately, many of us have been there.
That is why I am a suite guy! A family of applications that works seamlessly is superior to a best-of-breed strategy. With disparate applications, the time and money spent on integrating, maintaining, and acquiring new versions of applications are reasons alone to switch to a suite.
The caveat is that the applications suite must have an ecosystem to connect with any third-party application through APIs. Since its inception, Zoho has been building applications on a single platform. The result is a consistent user interface with data integration across applications and an ecosystem of payment gateways, banks, travel partners, and shopping carts. Businesses can also connect with any third-party applications through APIs and Zoho Marketplace.
In summary, tightly integrated products form a powerful platform for running an entire business.
Only pay for what you use
Zoho adopted the cloud-based software-as-a-service subscription model long before many larger businesses. Zoho saw in the cloud the ability to massively reduce the system management costs and pass the savings onto customers as a lower subscription cost.
With the subscription model, Zoho hosts the applications and makes them available via the internet. For many, this is an appealing alternative to standard software installation, requiring building a server and installing and configuring the application.
Zoho carries out upgrades, a significant advantage, particularly with financial applications that need to change with new tax and regulatory rules.
Zoho makes it easy for customers to try, buy and implement Zoho solutions, whether single solutions, bundles, or the full Zoho One suite. Customers can upgrade or downgrade editions and licenses at will and without multi-year contracts. Pricing for Zoho Finance Plus starts at $249 monthly per organization and includes ten users. Zoho Books begins at $20 monthly ($15 if billed annually) per organization.
Think globally, act locally
Transnational localism is Zoho’s secret sauce for success in collaborating and customizing locally to suit the needs of individual markets. Zoho attempts to solve workforce issues of rising costs of living, long commutes, and general life/work imbalances by bringing opportunities to people in the towns and communities that lack opportunities.
Transnational localism could be a solution to creating a balance between at-home and in-office work for employees, a challenge for every human resource department today.
Today there are more than twenty small Zoho offices in India. These offices function as spoke locations where employees collaborate across departments and work areas. New relationships with colleagues have formed, and employees can continue to support the local communities. Employees sometimes visit a central campus, but the local network and business tools support the remote offices. In essence, Zoho has created a hub and spoke model with a significant population center as the hub and rural areas as the spoke.
In my backyard in Austin, Texas, Zoho has established a hub. Last year, the first spoke office opened in New Braunfels, Texas, an hour outside downtown Austin. Soon after onboarding the team in New Braunfels, Zoho opened another spoke office in Bastrop, a rural town around 40 minutes southeast of Austin. These two locations have proven that talent is everywhere and that many young people in small towns around the US are just looking for an opportunity.
The proof is always in the numbers: eighty million users, twenty-six years of profitability since inception, and year-over-year growth of thirty-eight percent in a challenging environment.
Zoho’s approach of providing sophisticated yet easy-to-use software for a broad range of functions, with deep cross-integrations, appeals to many customers. Zoho innovates with a steady stream of new solutions and continual improvements.
I also learned a new term, "transnational localism." My takeaway is that by embedding a company into a local community, not by selling into it but by investing in it, by offering high-paying jobs in areas where they are scarce, and by fostering local education, these communities become self-reliant, and everyone wins.