Zoho steps up enterprise push, hiring first enterprise sales head and leveraging integrator partners

Timothy Kasbe was hired by Zoho two months ago as their first head of enterprise sales, and he is looking to shake up the enterprise software space by leveraging some traditional Zoho strengths, as well as utilizing newer ones, like enterprise-focused channel partners.

Timothy  Kasbe, Zoho’s Head of Enterprise Sales, and GM of Australia/New Zealand

AUSTIN — Historically SMB-focused Zoho is looking to shed that label. The cloud software suite vendor has built up a global presence primarily in that broad swath of terrain from the small business space to the midmarket. At their Zoholics event here, however, the company’s senior executives made many comments about their intent to make Zoho a serious player in the enterprise space. Accordingly, ChannelBuzz sat down with Timothy  Kasbe, who joined the company in February in the dual roles of Head of Enterprise Sales and GM of Australia/New Zealand, to discuss how the company plans to take its enterprise plans from the drawing board into corporate boardrooms.

Kasbe is an atypical senior executive for Zoho, which prefers to promote its own people in order to preserve its distinct corporate culture. Kasbe had moved from the U.S. to Australia to a CIO role at another company, left there suddenly for issues that had nothing to do with professional or personal performance, and was quickly snapped up by Zoho. His Australian location accounts for the dual role, although that’s not unusual for Zoho either, where senior executives often wear multiple hats. For instance, Vijay Sundaram, Zoho One’s Chief Strategy Officer, is also their channel chief.

What is significant here is that the enterprise sales lead role did not exist before Kasbe joined the company.

“It’s really a very focused effort on our part to go after that segment of the market,” Kasbe said. Zoho defines it as companies with annual sales of $100 million a year and up.

While the market as a whole identifies Zoho with SMB, Kasbe emphasized that enterprise penetration isn’t wishful thinking, and that the response of enterprises he has talked to has been highly positive.

“In my first 30 days here, we visited large enterprises in 14 countries,” he said. “The resounding response has been – where have you been? They say we have a breadth and depth of solutions that could really help them on their digitization agenda.”

Zoho sells their full-featured product for much less than enterprise competition. Historically, while that has been an advantage further downmarket, it hasn’t had the same resonance in the enterprise, where organizations have simply gotten used to paying ‘enterprise prices’ for enterprise software.

“What we are finding is that we almost have to retrain the enterprise into thinking about software,” Kasbe stated. “At board level discussions, the question is the shock of ‘why aren’t you enterprise priced?’ But we think that mentality is changing. We can have conversations that will really wake people up in terms of what they are paying.”

Zoho, which is privately owned, as an emphasis on avoiding debt that borders on the fanatical, and it’s something they see as an increased advantage as their enterprise competitors get bogged down in what Kasbe called a ‘debt-ridden mess.’

“IBM just announced that it is offloading their Watson marketing technology to a private equity company,” he noted. “We expect that we will see a lot of moves like that as we go forward. We see the enterprise players as increasingly challenged in days to come given their debt equity. As we see enterprise software pressured more and more, we can leverage the fact that we have amazing offerings. Salesforce’s price-competitive offering with us is Essentials for CRM, but it is a bare-bones system that doesn’t have key functions – including forecasting. Ours is full featured. It is ready for the enterprise and much cheaper. When enterprises learn about this, we stand ready to compete in that space.”

A key point, Kasbe said, is that Zoho has been selling into the enterprise for years, through ManagedEngine, one of the other Zoho Corporation companies.

“Managed Engine is used by 65 per cent of the Fortune 500,” he said. That is our stake in the ground. But it sells to a very different audience. With Zoho, we have talked mainly with system admins. We don’t usually speak to CMOs and CHROs. The challenge is reaching them and leveraging our advantages.”

Kasbe said that Zoho One’s belated drive into the enterprise isn’t a major disadvantage, because digital transformation puts pressure on entrenched incumbents.

“There are lots of incumbents in North America,” he stated. “However, as the world starts its digitization agenda, we have what I would call the last mover advantage. Those who have not invested in Wintel architecture are moving straight to the cloud. That makes it a smart play for the last mover.”

‘Land and expand’ – getting a foothold in one part of a larger company and then building out from there – is an important part of the enterprise strategy.

“In Canada, between 95 and 98 per cent of businesses are SMBs, but we are making inroads into some of the largest named accounts as well, “ said Chandrashekar ‘LSP,’ a Zoho Evangelist based in Montreal. “A very large telco and cable company started using our help desk in a single department. They liked it, and became our evangelists in the company, and now we have expanded into other departments’ help desks there. It takes some time. But it’s an important strategy in the enterprise, where CIO’s have not really been price-sensitive in the past. We have to be able to demonstrate the business efficiency and value, and this helps us do that.”

Not all of Zoho’s traditional ways of doing business have been helpful in the enterprise. In his opening keynote, Zoho CEO Sridhar Vembu noted that Zoho gets outspent 20-1 by some competitors, and while on one level that’s a company point of pride, on another, it is something of a disadvantage in the enterprise.

“We have historically been engineering and product-focused and not marketing – and this causes some issues,” Kasbe said.  “For example, BHP is the largest mining company in the world, and they use our product, but they didn’t know the product comes from Zoho. Some customers know the product but not the brand.

“In addition, a lot of the small business branding has been our own doing,” Kasbe added. “Some internal changes need to happen in our own thinking. Our sales people do have some internal transformation to do.”

Partly because of this, channel partners will be a key element of the enterprise strategy, particularly the global systems integrators. Some of these are already working with Zoho.

“We have pilots going on right now with the likes of KPMG and Deloitte,” Kasbe indicated. “We have an advanced partnership with EY. Wipro and Tech Mahindra are partners. Tech Mahindra brought Google to us. Google uses our CRM. I think that defines it as ‘enterprise-ready.’ Tech Mahindra joined as a partner a year ago. It took them six months to land that big deal for us.”

All of this makes Kasbe very optimistic about Zoho’s pivot upmarket.

“From the technical side, we have a cloud that can horizontally and vertically scale – so we are enterprise ready from the technology and feature function side,” he said. “We are increasing our focus on the marketing and branding side, and retraining customers about what software should cost in the 21st century.”