Zoho Takes A Shot At SalesFoogle - InformationWeek

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Commentary
4/16/2008
05:05 PM
Eric Ogren
Eric Ogren
Commentary
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Zoho Takes A Shot At SalesFoogle

In light of the new partnership announced between Google and Salesforce, CRM provider Zoho decided to retaliate with some facts that cloud up some of Salesforce's claims. Chief among them? Salesforce isn't "affordable." Wait, isn't that Benioff's line about Siebel?

In light of the new partnership announced between Google and Salesforce, CRM provider Zoho decided to retaliate with some facts that cloud up some of Salesforce's claims. Chief among them? Salesforce isn't "affordable." Wait, isn't that Benioff's line about Siebel?I've seen Salesforce.com CEO Mark Benioff speak on several occasions. There's no doubt he's charismatic. He reminds me a lot of comedian Penn Jillette. One of his favorite lines was about how affordable Salesforce.com was compared with the competition. He'd cry: Salesforce.com is only X per month, and Siebel charges X + Y per month. Oh, and our solution is easier to use. That comparison was the religion by which he lived, it was the company line.

Raju Vegesna of Zoho disagrees with Benioff's viewpoint. He wrote in a blog post, "As with other Zoho applications, Zoho CRM is very affordable. The Personal Edition is free for 3 users; Professional Edition is $12 per user per month; and the Enterprise Edition is $25 per user per month. The Professional and Enterprise Editions are also free for the first 3 users." OK, so Zoho is priced at a reasonable level. I mean, who isn't a proponent of "free"?

Vegesna goes on. "It is a well known fact that Zoho CRM competes with Salesforce. But, the unknown fact is that the functionality of Zoho CRM is broader for Personal and Professional Editions... All this functionality is available at a fraction of the cost. Salesforce spends nearly eight times on sales/marketing as it spends on R&D. Sounds to me a textbook definition of 'business model bloat'. If you are a customer of Salesforce, it makes you feel really happy that the company spends 8x on selling to you as in writing the code, right?"

I can't verify Vegesna's numbers, but I'll assume that he is accurate. Does Salesforce really need to spend more money on R&D? Isn't that the point of AppForce? It's letting all the developers out there do the work for it.

Vegesna concludes by saying, "History shows that integration efforts like the Google/Salesforce one, where the business models are so radically different, don't prove durable. Ultimately, markets will be smart enough to figure out what is obvious to many already: the Salesforce business model is an evolutionary dead-end. The proof is the silent popularity of Zoho CRM, one of the most successful Zoho services to date."

Them's fightin' words!

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