Zoho Moves Upmarket, Targets Verticals As CEO Steps Down

Zoho, one of the fastest-growing CRM and collaboration applications vendors, is moving upmarket while eying strategic opportunities in key verticals just as its down-to-earth CEO is stepping down to take on the role of Chief Scientist.

With an installed base of more than 900,000 customers and 117 million users, the 29-year-old company has been winning the hearts and wallets of small and midsized organizations with an extensive portfolio of productivity tools for IT and business users.

Now its co-founder Sridhar Vembu, one of the most respected business voices in India, is assuming the new role of coder in chief, a position similar to his humble beginning as a scrappy coder in the 90s. His CEO responsibilities are being split among key executives with co-founder Tony Thomas leading the US operations, Rajesh Ganesan running ManageEngine and Mani Vembu overseeing Zoho.com.

The moves come on the heels of its entry into the digital agent space with Zia Agents, which will be delivered as part of its AI enhancements across its 100+ products throughout 2025.

With much of the tech industry struggling to define Generative AI and its implications, Vembu is emphatic about reasoning fast turning into a commodity – not too different from the days when PC clones are wresting control from IBM in the 80s.

What is different this time, Vembu expects Zia agents to become catalysts and extensions of its core values by generating exceptional user experience, trust and privacy as guardrails and tangible business values for programmers and end users.

On the upmarket front, Zoho is already enjoying warm reception among tens of thousands of major corporations that have adopted different Zoho products because of its value-based formula, along with the ease of doing business with the 18,000-strong privately-held ISV.

At the annual ZohoDay event held recently in Austin, Texas, where Zoho has built a major presence for its North America customers, the vendor detailed its enterprise push by touting its successes in capturing the increased wallet shares of multinationals like poultry producer JBS, telecom heavyweight Telus and community leader Los Angeles Times.

Exhibits 1 & 2: Showing distribution of 1,000+ Zoho Enterprise customers with more than $100 million in revenue by industry and geo, derived from ARTW Buyer Insight Technographics Database, February 2025

By delivering functional-equivalent products at a lower price point, Zoho has made inroads into these big companies, displacing Asana, Atlassian, Google, Microsoft, Salesforce, ServiceNow and other rivals along the way. Executives at JBS cited a 96% saving when replacing ServiceNow with ManageEngine Service Desk for IT service delivery, on top of benefits like readily available documentation and world class implementation support that have culminated in an expanding relationship between the two entities for 15 years and running.

Its transparent pricing has also won over those that see similar savings ranging from 34% to 84% when choosing Zoho collaboration and project management tools over its closest competitors.

Ghalib Kassam, CIO of Los Angeles Times, said when replacing Salesforce with Zoho CRM, the only hurdle he had to overcome was to convince others at the newspaper to ditch the anachronistic  belief that one would never get fired for buying IBM.

IFFCO, a UAE-based multinational with 15,000+ employees across 50 countries, transformed its travel and expense management with Zoho Expense. According to Jaroslaw Pietraszko, Group CIO, the company gained real-time insights thanks to Zoho Analytics, improved country-specific compliance, and reduced expense claim processing time from days to minutes.

That kind of support has translated into above-average growth for Zoho over the past few years.

Key CRM Applications Vendors And Their 2019-2024 Growth, $M and CAGR

Source: ARTW Buyer Insights Technographic Database, February 2025

During the two-day event, Zoho also outlined its expansion into key verticals such as dealer management systems for auto retailers and loan origination system for financial institutions.

Telus, the $16-billion telco in Canada, is running a suite of Zoho collaboration and CRM apps for its dealer network and company-owned stores, along with OEM partnerships with Zoho to drive cloud telephony through its business and consumer accounts.

Recently, Zoho also announced the US edition of Zoho Payroll, aiming to solidify its presence in the HR and back-office applications markets, after experiencing increased momentum with its advanced analytics and upgraded ERP tools like expense management.

If all these developments sound familiar, one looks further than Microsoft when its co-founder Bill Gates gave up his CEO position to become chief software architect in 2000 after building Windows into a ubiquitous platform for enterprise productivity, collaboration and ultimately knowledge workers on a global scale.

The parallel between Zoho and Microsoft is unmistakable given the all encompassing product strategies of the two and there really aren’t many software vendors that endeavor to offer everything that these two providers are capable of delivering all under the same roof – from Cloud infrastructure to enterprise  apps and from storage to IT management, a distinction that has often been made by Zoho executives.

Still, challenges remain for Zoho as it goes upmarket and seeks to become more specialized in key verticals.

First its value-based approach will be coming up against a host of wall gardens being erected by incumbents like Microsoft, Oracle, and SAP. As much as many enterprises are wanting to replace their legacy and outdated systems with Zoho for reduced IT spend and efficiency gain, some might balk at the last minute because of high switching costs.

Case in point is that regions where Zoho have scored above average growth over the past few years are typically those that are more price sensitive, whereas the hotly contested Europe and the US markets have fared less well for the vendor.

Second is the question whether Zoho is committed to broadening its vertical apps to cover complex tools like enterprise asset management, core banking, or even product lifecycle management and engineering applications that are not necessarily attributes that customers would associate with Zoho.

Still, Vijay Sundaram, chief strategy officer of Zoho, is philosophical about its prospects in crowded markets such as the US where he takes a long view in order to weather the polarized political climate punctuated by an increasingly protectionist stance in favor of indigenous suppliers of goods and services.

Another difference between Zoho and all other tech companies for that matter is that despite his fame and fortune, Vembu, now Chief Scientist, is most at ease when indulging in life’s little pleasures like cycling, hiking and toiling the land in rural India, with a healthy dose of programming and AI prompt engineering to boot. That down-to-earth culture is deeply ingrained and it’s not likely to fade away any time soon, something that may well be unique to Zoho and its DNA.

List of Zoho Customers

Source: ARTW Buyer Insights Technographic Database, February 2025

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