Business at the Margins

There is an interesting discussion started by the NY Times article on corporate IT spending, and how it will be hit in a recession, but won't collapse like it did in 2001. TechCrunch followed up with a piece on how IT spending restraint may actually be good for new companies that promise cost savings.

As I said in my comment in TechCrunch

It is useful to remember that both Salesforce & WebEx thrived during the last recession - in fact they were relatively unknown during the last boom. Cost was a major part of the reason they thrived in the bust.

It is not an all or nothing proposition: adopting a suite like Zoho doesn’t mean abandoning or throwing away the investment already made. With our MS Office plug-in that is exactly the message we are touting - don’t throw away, augment what you have. Adoption can be very tactical and very gradual. And that business-at-the-margins is more than sufficient for new vendors to thrive - at the time of their acquisition by Cisco, WebEx was pulling in about $250 million a year, which wouldn’t qualify as a rounding error for Microsoft, but a nice chunk of change for a new company.

That is what we believe in here at Zoho. Our business plan does not depend on, and never depended on, a mass move away from the desktop, which is unlikely anyway. We wouldn't put out tools like the Office plug-in if we believed users will abandon Office wholesale. Instead, we will earn our initial business at the margins, enabling greater productivity with what customers already have, stretch out their replacement cycles and so on.

We already receive a large number of enquiries from happy users who want to adopt Zoho in their businesses and actually pay us (reminder: the personal edition is free, and will remain free). We tell them we have set some goals for integration across the Zoho suite, with more business-friendly features, before we take their money. That is what our team is working hard on.