Recently, two bloggers we respect asked much the same question. First it was Pandurang Nayak asking Zoho in the Web 2.0 revolution: Creativity, yes! Business, where? and then Robert Scoble asked Online wordprocessor updated, but does it have a chance at survival?
First of all, thanks for asking, guys! We at AdventNet (the company behind Zoho services) are delighted to get noticed. We have been toiling away for 10 years now, building a profitable business. We actually predate a lot of the famous internet names, though whether that is something I should be proud of as CEO is debatable :-) At least we have the excuse that we never took any venture capital, mostly because at that time in the mid 90's it wasn't so easy to get for us hard-core engineers with no business experience whatsoever, focused on some "boring niche markets", as one VC helpfully commented in 97.
There, I said it. "Boring niche markets" are how we can survive and endure. Remember that even with the absolute domination of Microsoft in the PC industry, companies ranging from Borland to Novell, in direct cross-hairs of Microsoft, endured. Online productivity applications have many specialized markets where we can play, ranging from education to legal services to journalism [as some commenters on Scoble's post point out]. And we fully intend to keep a respectably-featured free edition, even as the Zoho services emerge from beta, as we currently do in almost all other AdventNet products. As an example, ZohoCRM offers a 3-user free edition.
And as a quick glance at the AdventNet site will tell you, we have a pretty good track record serving such smaller markets profitably, providing affordably priced products with good customer service. So it is not all or nothing in business. Smaller players continue to thrive in many different industries long after giants have "conquered" the broader markets. Our own 10 year history is proof.
As a company, we are pretty conservative financially - we don't spend money we don't have. That has kept us going in some good times and bad, and I believe that will keep us going for a while yet. That financial prudence is the real guarantee for users who depend on our products that we will be around to serve them.
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