The New Zoho CRM Aims to Undercut Salesforce.com

Written by Steven Walling / July 21, 2009 8:58 AM / 21 Comments

With improvements to email integration and a new marketing campaign, SaaS productivity vendor Zoho is aiming its sights openly at Salesforce.com, the dominant Web-based CRM today.

The "Zwitch to Zoho" name might be cheesy marketing, but the cheaper subscription price is no joke. If you want more than 5 users, Salesforce.com will cost you $65/user/month. As of today, Zoho is offering an unlimited use CRM subscription for just $12.

If you're thinking "you get what you pay for" right about now, you'd be correct.

Even the Salesforce.com edition limited to 5 users (for $9/month per person) includes support for Gmail, Outlook and Lotus Notes. The new additions and pricing plan for Zoho CRM include close integration with Zoho Mail, but using either Outlook or Gmail will cost you an extra $3/user/month. In other words, to get the full functionality of Salesforce.com, it'll be more than four thousand a year, not the barely more three that Zoho is touting.

Even if you won't get quite the 80% savings that Zoho is proclaiming, its new CRM is still significantly less expensive than Salesforce.com, Sugar CRM Professional, or many others out there. And especially in today's IT world, money talks.

Comments

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Is Zoho releasing its crm as open source? if so, what platform? (PHP?).

Sugar is awesome because it is open source, I have been using it for a long time without any professional support, and that means when my company grows and the need arises I know who to turn to for a professional system, but what about zoho? is it offering a community edition like sugar?

Posted by: jcapinc.myopenid.com | July 21, 2009 10:13 AM

Jcapinc, my understanding is that Zoho is not open source.

Posted by: Steven Walling | July 21, 2009 10:45 AM

Regarding the $12/user pricing of Zoho CRM, I want to point out that the first 3 users are free, and the price applies only from the 4th user. So for a 5 user pack, the actual price is $24/month.

Our $12/user/month product compares favorably with their $65/user/month Professional edition product, not their bare-bones $9 product. So we offer a more comprehensive product at an enormous value.

We invite users to do the product comparison themselves; even more, we invite them to sign up for 3 free users (that is not a free trial - the first 3 users are always free!).

Sridhar Vembu
Zoho

Posted by: Sridhar Vembu | July 21, 2009 11:20 AM

I am so annoyed by companies that try to compete with Salesforce solely on price. You *do* get what you pay for. Salesforce has really strong documentation and support, and I know a few fantastic representatives there who go the extra mile for even tiny single-user Group Edition users.

Zoho, on the other hand, likes to send me horribly misspelled replies on Twitter whenever I mention Salesforce. (I'm not affiliated with Salesforce, but I'm an efficiency consultant who has many clients using it, and I'm generally really happy with Salesforce.)

If you want to compete in the CRM market, be different/better than Salesforce, don't just replicate them (badly) and then undercut on price. Zoho, you missed the boat by more than six years. Unoriginal and lame.

Posted by: Marina Martin | July 21, 2009 1:17 PM

@Marina,

It's called commoditization, and yes, it's annoying for many, including the software vendors being commoditized and expensive consultants who can't sell mega $ on lower priced software. About the "only" winners are the customers:-)

But joke apart, this is not only about pricing. To be more specific, there will be customers who decide simply based on price, since their functional requirements can be met by both. Other's will factor in functional requirements.

Salesforce.com clearly has more functional depth in fewer business processes, which may very well be what highly specialized teams want in a a large enterprise.

Zoho CRM supports business processes like Sales Order Management, Procurement, Inventory Management, Invoicing that are not part of "classic" CRM, more a mini-ERP disguised under the CRM label, which may be a better fit in many SMBs where Sales ..etc staff wears more hats.

It's the classic breadth vs. depth of functionality question - oh, yeah, and a matter of a few bucks :-)

More here (it's over a year old post):
http://www.zoliblog.com/2008/04/16/zoho-crm-enterprise-edition-smb-price/

Posted by: Zoli | July 21, 2009 3:38 PM

I agree with you Marina. Zoho is Zworst company to deal with. They are unethical in every dimension. I am staying as far away from them as possible. Their pricing promotion is another example of that. Just read this article.

Posted by: David Stevens | July 21, 2009 3:45 PM

@Marina, I hope you would actually try out the CRM/Mail integration and see how much more productive it is compared to what Salesforce offers.

We have explained this before: our goal is not merely to "undercut" Salesforce. We fundamentally do not believe in their business model, which spends more than $7 in marketing for every dollar in R&D.

It is legitimate business to target inefficient competitors. Indeed, by doing so, we are performing a valuable service to customers.

@"David", why don't you publicly list how "Zoho is unethical in every dimension?" Anonymously attacking competitors isn't very ethical.

Sridhar Vembu
Zoho

Posted by: Sridhar Vembu | July 21, 2009 4:32 PM

Features are fine but without some sort of guidance on how to joint the human factor (your end users) to the technology in most case you are throwing good money or bad

If you are looking for a electronic Rolex other than what comes with outlook then maybe this is an option

If you are focused on success and results-the fact that your end users will actually use the software look at solutions such as my company offers www.salespowerbench.com

Posted by: Matt Zimmerman | July 21, 2009 5:44 PM

@Marina Martin - True
LEADSExplorer doesn't compete on price (although way less costly) but on features like seamless integration of website and crm providing real time visiting data into the crm.

Posted by: Engago team | July 22, 2009 2:40 AM

Purchasing a CRM solution based solely on price is generally a bad idea. Low cost tools like zoho might work for some companies in some industries, but the salesforce.com advantage is just how horizontal and configurable/customizable it is.

There are TONS of SaaS competitors out there, and many compete with sf.com on price because they're so far behind on functionality. Might work for some - but if you plan on your CRM tool being more than just storage for customer data (ie running key business processes through it and integrating on-premise legacy systems)...this is where they fall down.

Posted by: Chris Hamoen | July 22, 2009 6:45 AM

Chris,

I strongly recommend you to try Zoho CRM yourself to see whether it's customizable or not. I would also suggest you to try Zoho Creator which allows you to create applications ( PaaS )on the web.

We are planning to integrate Zoho CRM with Zoho Creator to allow users / partners to build their own applications on the platform.

We are open to suggestions. So please write us on what you think is lacking in Zoho CRM. We will make sure we get there soon.

Regards,
Mani.

Posted by: Mani | July 22, 2009 10:45 AM

I agree with you Steven The idea of Zwitch to Zoho is good and we can get for less cost.

Posted by: Sathish | August 17, 2009 5:06 AM

Competition is always good. No matter what. Customers can benefit greatly from competition. If you can still remember how much AT&T charged international phone calls 15 years ago.

Posted by: Colin Yao | September 7, 2009 4:51 PM

Zoho rocks I was just thinking about how much it does. I have the option to use a free developer version of salesforce, but I don't, I use zoho, it is much easier, and yes I don't have crazy integration with other things, but from what I see it is easily possible with zoho. Just admit it salesforce.com consultants...salesforce.com is way overpriced. They think they have the lockdown on some magical technology, they don't. Zoho can do a lot for what you pay, and I haven't even scratched the surface. For those businesses, who just need a better hosted solution to keep track of things zoho CRM and zoho business are great, and that is without customization / integration

Posted by: Jason | September 8, 2009 7:31 PM

Zoho crm works pretty well..its very userfriendly.our customers are very happy with our services.zoho crm gives you the best to keep track of the things

Posted by: CRM SERVICES | September 22, 2009 3:35 AM

I used Salesforce for 3 years and Zoho for 1. I like Zoho better. Keep in mind, Sales people are using CRM mostly. Customer Service Reps as well. These types of roles in the organization lend itself to simple fact. They hate data entry period. Thus garbage In, Garbage Out. I have trained many users and managers in CRM. 80% only use 50% of the CRM capabilities anyway.

Like a PC. 80% of users utilize 20% of it's capacity.

That being said, CRM is CRM is CRM. What else can make my life easier.....Integration with Email, Online Meetings, Invoices, and oh yeah...Cost.

With either Salesforce or Zoho CRM, I can track leads, accounts, and Opportunities to drive revenue, quotes, contracts and problem logs.

So why would I pay $100 per month for Salesforce when I can get the same thing from ZCRM for $25. They will help manage and drive the same amount of revenue either way.

As for Customization.....The same give or take a few items either way.

So for a example of 10 salespeople using a CRM....$250 per month beats $1000 per month any day. or $7000 per year.

Can anyone can really justify the cost Salesforce now. Keep in mind, All Salespeople HATE keeping their CRM up to date regardless of what they are selling and regardless of the price of the sale.

In fact, any Manager or Consultant will confirm it is the number one problem with the accuracy of the reports you are trying to get from any CRM anyway!

Posted by: Rick | September 25, 2009 12:08 PM

Well, I have to say that after a year of trying to find the right strategy to help grow my business I am still unsatisfied all around.

Salesforce is stable and has SOME integration with Google aps and Box.net (which in turn integrates with Zoho on some level), Google's shared calendars (which Zoho does not yet offer) are critical, SharePoint is turning out too expensive to test and integrate... I am quite frustrated and our data and processes are all over the place.

As a SMALL business owner I am looking for ERP - where Zoho has the advantage is the 'PROMISE OF EVERYTHING' in one place - that is their biggest advantage right now, not just the price. I do use them in limited capacity, and have some concerns about dependability and the fact that you really do need a developer on stand-by if you plan to use it (not sufficient documentation, bugs, and so on...)

If Zoho can sustain growth and continue to implement new features while strenghtening the core, and continuing to integrate their apps and improve technical support, they will soon have advantage that is based on more than solely the price.

Posted by: Svetlana | November 10, 2009 6:31 AM

With the latest advancements on the Zoho CRM api, we can now deliver custom solutions & integration for clients. This clearly separated Zoho CRM to Salesforce in the past. However, it would be nice to see a Zoho CRM application marketplace , for displaying Zoho & partner integrations.

Posted by: Batipi | November 25, 2009 9:49 AM

CRM as a commodity is coming. Our 3 salesteams use salesforce.com but we will participate in a trial for zoho CRM soon. From some of these entries, there seems to be a bit too much anger at zoho. Personally, I love the concept as a multiple buyer of CRM saas. It's not rocket technology here, assuming zoho has great programmers, I am sure that they can compete while not spending millions on marketing.

Posted by: Kevin Johnson | January 10, 2010 3:37 PM

I have used Salesforce.com, SugarCRM, SalesLogix....

I agree with Rick (Sept 25, 2009 post) -- ZohoCRM will do what the majority of sales teams at most companies need at a very 'value-based' price point.

Personally, I like ZohoCRM better than Salesforce, period.

It is not just about the $$$ savings, although that is a big consideration for most companies.

Posted by: John Ferguson | February 1, 2010 1:43 PM