Software suites are poised to take over

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This article appeared in the July 2018 issue of CRN magazine.

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Software suites are poised to take over

COMMENT  |  Quick – how many major software companies headquartered in India can you name? Not IT services and consulting, but big software brands. It’s tough, isn’t it?

The majority of business software still comes from the US of A. Every country has their notable exceptions, but the market share leaders tend to be headquartered in America.

While the US has led the charge for most of the past 40 years, there are pretty clear indications that lead will be dramatically shortened. Perhaps it will be lost altogether when it comes to mobile and cloud apps.

China’s WeChat is one of the best examples. Most people in the West think of it as just another WhatsApp. But Chinese consumers live their whole lives on it, using WeChat for everything from banking services to video conferencing. It is sometimes referred to as a “superapp”.

FaceBook is clearly trying to emulate WeChat in many ways to become an “app for everything” but given the surrounding privacy maelstrom it is hard to see it succeeding to the same degree.

Part of the secret to US success has been its 325 million-strong consumer market. That home audience has set up American companies with enough profits for global expansion.

India and China haven’t had the infrastructure and governmental support to take advantage of their even larger populations. That has changed. India and China pull together national markets of roughly 1.4 billion consumers each. How much bigger will the war chests for their software companies be?

If China has WeChat, then Zoho could be India’s “business app for everything”. Zoho started out with three browser-based productivity apps that competed with Google’s G Suite and Microsoft Office. It has expanded to 40 products designed to run almost all aspects of a small business. Everything from word processing to recruitment tracking, sales incentives and electronic signatures.

The roadmap for the suite seems to have been driven by what Zoho needed to operate its organisation of 6500 employees. Yes, Zoho runs on Zoho, so you know that these apps can scale.

Now, from the apps I have looked, at none would win the number one spot against standalone apps in each category. They lack the flashy design and user experience that you get from a software company dedicated to a single type of app.

Yet for the needs of most small businesses these apps are perfectly functional and, if you look past the design, actually quite good.

The killer feature, though, is the price. Zoho took out a full page ad in the New York Times announcing Zoho One, a suite-based strategy that gives you access to every app for just A$35 per user per month.

As indicated by the NYT ad, Zoho has launched a global assault on the small business software market. Although the company has relatively little brand recognition in Australia, it has already amassed a customer base of 30 million users.

The pitch is very strong. Here’s a sample of those 40 apps. They cover sales and marketing (CRM, online forms, electronic signatures, sales tracking, social media, email marketing and more); finance (accounting, inventory management, invoicing, expense management, online payments and more); email and collaboration (word processing, spreadsheets, presentations, webinars, password management, note-taking and more); human resources (performance management, recruiting); and a help desk ticketing system.

It is incredible value for $35 a month. Pick any one of those apps and you could be paying on average $20 a month for it. A decent CRM and email marketing app alone is easily $40 a user a month, the same for accounting software.

If you’re a small business or even a sole trader you can pay several hundred dollars a month in software. Trust me, it’s very easy to do. I run a very lean consulting and media business and pay more than $7000 a year.

The point is not whether you think the Zoho suite represents a good deal or is just under-baked software. They may lack the bells and whistles but these apps will meet 80 percent of needs at a fraction of the cost.

Zoho can do this because it has grown very quickly in its home market of India and can scale the costs more successfully than Western companies. It has just copied the essential features in each category.

WeChat and Zoho are the first major consumer and small business apps to break out of their respective home markets to challenge US hegemony in the software market. They won’t be the last.

Sholto Macpherson is a journalist and commentator who covers emerging technology in cloud

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