Zoho goes after small business accountants

Foreign.

Who are you?

I'm Sridhar Rambu. I'm the CEO of Zoho.

Yeah, we've had you on the show before. Yes, several times.

I'm really happy to be here again.

Thanks for coming back out. That must mean you're going after yet another company with another new product.

Yes, we are. Today we're just launching Zoho Books, our online accounting package. And this kind of rounds out the Zoho suite, particularly the business apps from CRM Project Management. Now we have the accounting package. So that's what we are announcing today. Cool.

Let's talk about that first. But after that I want to talk about all the Google technologies you're using. You're high up in the app store, I know you're using Google Checkout. And we'll talk about that so people can watch that and see what you think of that. So how are you going to take on Intuit? I guess that's the question.

We actually partner with Intuit. We actually have. In fact, just a month ago we launched our CRM QuickBooks integration and we are going to play in the marketplace just like we do in Google's. So we don't think of ourselves as taking on anybody. I mean, we offer a good, compelling small business app suite. That's how we think of ourselves.

It's pretty hard to get somebody. I used QuickBooks back in 2003 to.

Do user lens books.

I learned I had to lay myself off actually. No more cash in the bank. It didn't look like it was going to get fixed either.

That's a tough one.

That was a bad day. It's bad to fire somebody. It's bad to get laid off. And I had to do both to myself.

I ran out of money myself when we started way back two years ago. I would check the bank account and see how to get back to work.

So who is this for? Probably the small business that's used QuickBooks for 10 years. Is they going to switch?

Yeah, there's a lot of new businesses formed every year and they are going online. I mean they're going on Google Apps, they're coming on Zoho CRM and they want an online solution they don't want to install, they don't want to manage a database, they don't want to back up their QuickBooks database, all of that. So that's the audience we're really targeting and that's incrementally. If you see every year there's lots of such new businesses that are coming online on stream and that's what we're really going after now.

You offer several business apps. You have CRM, you have an office suite, you have all sorts of different kinds of apps. Does this take advantage of the fact that you have other apps that help a business manage the business?

Right.

So in fact, as we speak, we are integrating it deeply with CRM and we will also be integrating with other, for example, spreadsheets so that we can analyze the data Zoho reports to get comprehensive reporting. So all of those integrations are actually planned. Some of it is done wrong, but you will see that over the course of this year.

So that gives me a hint of what you'll do really well, which is a customer calls on the phone or sends me an email and says, hey, I want 20 widgets. That's CRM, right?

Yes.

And then I say, well, here's the price, here's the widgets. Then they say, okay, they'll pay for it somehow. Are you doing a payment system too?

We have actually integrated with PayPal really well and that we are a partner in that ecosystem as well. That actually speaks to our strategy. We in fact go and play in every playful. There is that's important to us, whether it's Google, whether it's PayPal, of course, the Intuit ecosystem, and of course all of the other ones that are commonly known as social ones. But for us, these business ecosystems are really important. And we of course play in the Apple, the App Store for iPhone and the Android Store as well with mobile apps. So look at ourselves as kind of Switzerland. We don't have any religion here. We want to offer compelling tools and we want to go where the customers are and give them the tools they need.

So to continue that thought. So the business is taking an order, got money for it, and then it hits the books. What's the advantage of having all that in Soho or Zoho plus PayPal plus Google.

Right.

So it's really productivity. I mean, the key advantage here is you can get all this done with a fraction of the effort than what is the traditional desktop app model, particularly in SMB, it is really still a desktop paradigm there. And compared to that, this would be a lot more productive. And we see that and as we implement it in businesses. In fact, typically a SMB customer comes for one app. It would start as a project management. Lots of times it's CRM. And then as they discover the full breadth of the Zoho suite, they tend to add more apps to it. And that's how we have actually a lot of our growth is driven by not only the incremental customer acquisition, but also existing customers adding on other apps. So that's how we see growth. There's two sources of growth for us.

And how much is the service to use this?

It's $24 a month. So it's really priced for that per.

Business or per seat?

It's really a business because it's not, you know, in these kinds of business there won't be like five seats. It's really a business.

Cool. And can you give me a sense of what it looks like and some of the ui?

Maybe I'll have Raju will give you a full extended demo on this.

Cool.

Come on in. Switch. Switch places here.

And Raju, who are you?

I'm Raju Gesar. I'm the evangelist for Zoho. Excellent.

And yeah, and you got a new Google Chrome laptop. We'll talk about that in a minute.

So here I'm part of two organizations. I can manage this information for multiple organizations. So here I select maybe one of the organization and I can see all the information around it at a high level. It gives you information on what we do. So primarily it lets you inform or lets you manage your business well. So about the money that is coming into your business, money that is going out of your business. It also helps you collect money, send out invoices.

So I see up here you have estimates. So probably when the customer comes in and says, I need 20 widgets, you're probably going to give them an estimate and how long it'll take and all that fun stuff.

Absolutely.

What does that look like?

So go to the money in section and you can say I want to send out an estimate. So just say go to the estimate section and you can create a new estimate of your items. So I create a new estimate and select the customer to whom I send out this particular estimate. And we support multiple currencies too because this is a global product. So you can define the currency conversion and select the items that you want to. You're trying to sell him and just send him an estimate. Select the quantity and other details and just say email in estimate. Then that will basically be sent to the customer.

Cool.

Go back to the other screen, the home screen you showed me. You're going to sleep. Don't need to create that. And what's the next. Go back to the first screen you were showing and let's see what's other. What are the things you do?

Invoices is an important part, recurring invoices, especially if you do it on a monthly basis. And the invoices is a nice part where you can send out an invoice. And when you create an invoice, you can send it out through an email and you can receive payment online. Because of our integration with PayPal, Google Checkout as well as Authorize.net in fact, in PayPal we do even tighter integration. We have something called business payments. PayPal business payments. What that means is you can basically avoid the transaction fee for a credit card. Typically, you end up paying 2 to 3% of the credit card for the transaction fee. You can avoid that using PayPal's business payment. It's a flat fee of 50 cents no matter what the amount is. So things like that to help the business owner make most of it. And it's not just emailing the invoice. If you want a snail mail, we support that. In which case your invoice is printed, the stamp is attached and mailed to the customer. All of these are automatically kept track of.

Very nice.

Does it tell you, hey, this guy hasn't paid for his invoice.

In fact, you can even send out reminders as well. So whenever there is an invoice that is sent, and if the user is not paid, you can send out payment to mind us. And you can send out maybe three days before the due date or on the due date, or maybe for overdue invoices, you can also send out reminders.

Can you set up a late fee?

You can do that. And it certain processes might have a $5 late fee.

Absolutely, $50 late fee.

And the late fee is automatically added to that amount when it is paid late. And when the payment is made, a thank you email is automatically sent. And all of these can be automated because doing it manually is really a pain.

Sorry about that. Where was I going? Can the customer see his invoice online? So, oh, my email went away for some reason or I deleted it and I forgot. Do I owe this widget company money? Can I go online to their website and sign in with my credential and.

See an invoice not currently that's coming so directly able to log into Zoho and look at all the invoices. Invoices. And you can manage your pending invoices and all of that. We are getting to a phase where it's all about integration. Now we want to launch a good, solid product and then when it integrates with other products, it will be solid. Imagine the scenario. Let's say you receive an email from your customer. In your email, if you're using Zoho Mail or even Gmail, it will tell you the customer details from a pull from a CRM system. It will tell you the recent documents you signed, like agreements you signed, maybe an NDA or things like that pulled from a document management system. Maybe the pending support request for that customer from our customer support software we launched last month and the pending invoices for that customer pulled in from the accounting software. Whether we are basically pulling information from individual pieces and contextually presenting that information, that contextual integration is important. If you're in the CRM system, similar information will be presented. But in that case, we'll also show you the emails you have exchanged with that customer. Because you're in CRM system, that contextual information is really important. That's what we really bring value in. In fact, today we are not only launching Zoho Books on Zoho Suite, we are also launching it on Google Suite, on Google Apps Marketplace. And we are doing the same contextual integration with Gmail as well. If you are in Gmail, receive an email from a customer, we'll tell you the pending amount that particular customer has to pay. So those things are important. Very cool.

How does it I notice here that you have integration with bank accounts. What does it do with the bank and the credit cards and stuff like that?

For now, it lets you manage your multiple bank accounts and your credit card accounts and it lets you record a deposit, how the money is being deposited, what is the amount that is deposited. So that gives you a good idea on it. There are further integrations that are coming in, like automatically linking to your bank account, so you automatically import all the transactions and reconciling the account. So all those things are coming pretty soon. But now it lets you manage all existing bank accounts so that you have at a bigger picture. You have an idea how your business is doing.

Can you give me a sense of the reports that I can see at the end of the month how much money I am making and then give me some sense of the detail that I can see. Can I see how many widgets my salespeople have sold and can I compensate them based on the widgets that they've sold?

Absolutely. So first, once you log into the system, the first thing you see is are you making money or not? That's the basic thing. How are your expenses compared to your income? So it gives you a good snapshot of how things are going with your business. Then you can drill down into reports in every single module. How are you doing based on A customer, revenue per customer. How are you selling? Based on individual users, all of that. Now, regarding the sales, the sales is basically done in the CRM system. That integration tightly integrates with the book system that is coming, but there is a fluid information flow between these two systems. Currently, you can import all your contacts from your CRF system to SoHo books, but reporting is available across all modules. How much are you paying in taxes? How much are you. What currencies are you being paid in?

Can you show me some of the reports?

So you can go to the report section. And here we have say, I want to see sales by customer. Just select that and you can choose the time this month or kind of a range of dates, and that will give you the sales by customer. And if you can drill down, you can select a customer and it will tell you the details, give the details of the customer, the number of invoices sent, and all those details. So you can drill down into every single invoice for that customer. So there are multiple reports Here we have reports based on the invoices, reports based on the financial stats and other details. Look at, say, the profit and loss for your business and select a range of dates and it will give you the information. There are more integrations coming here because we also offer a Zoho reports application, which is a business intelligence tool that will really take the reporting to the next level because you can build custom reports and do some analysis of the data you have in the system.

Try to see, like, sales per country.

Absolutely. Yeah, absolutely.

Can I see sales by salesperson?

Sales by salesperson is available in the CRM system because this is used by the accountants, the financial people. But in CRM, we have the sales per country, sales per salesperson, and all those details. And some of this information will be freely flowing between these applications.

In the magazine business, when I remember talking with the bookkeepers there, a lot of the revenue is deferred because you pay a subscription fee for $24.99.

Right.

But a lot of that has to be on the books as deferred income. That each month that'll be counted as income for tax purposes and also for liability kinds of purposes.

Yeah.

Can you do that?

You can do that. One way to do it is just issue a credit note to the customer. Use that credit note, and based on that, you can pay later. For now, you use the credit note. So things like that can be done? Yes. So you can just say, go create a credit note and issue it to a customer.

What other kinds of things that we need to know about doing books. I have to think back when I was doing my books. I see customers was certainly a big one.

And it's also not just managing your customers. On the other hand, you have to manage your vendors as well. Who are the vendors you're dealing with, the contacts there, sending out bills, managing your expenses and all of that. So that part is also covered. So we have two sections. One is the money in section, the incoming part and the money out section, your expenses, your bills and all those things. So the application covers both aspects of it and then your business itself. How your business is doing, how are your existing bank accounts doing?

Can you prioritize vendors? Because if I'm running short on money and I did this right, I would pay the important ones first and then the less important ones later when we get some money.

There's no way to automatically set up payments. So you do it anyway manually for now. So yeah, we'll probably get there.

And what else? What other kinds of things did I do with books that I have to remember balancing with the bank accounts?

Yes. So that's something you can. Yeah, you can sell accounts. Yeah, you can.

So if somebody took some money out of the bank account that I didn't know about, does that show up and warn you, hey, there's not enough money to pay your checks that you're sending out?

Yes. So for now you have to import the bank details manually. So that import you have to export from your bank and import it into the system. But we will provide an option to directly connect your bank account. So whenever there is a transaction in your bank account, it is automatically imported. And from then on you can mark every transaction, tag it with customer in different ways. Either it is an expense or maybe it is a deposit. So all of these can be done. So that is coming in a few months. That's one of top of the first you want to get the solid product out. Then the focus is going to be on integration, both internal as well as external applications.

I use Expensify to track my expenses. Do you have any integration with that?

Not with the.

It would keep track of financial details.

Not with Expensify currently, but we do have the expenses module where you can add some expenses. But you have an option to import all your expenses in standard formats. Excel, csvml.

Yeah, and expensive PI connect output though.

So it'll be absolutely. Yeah, exactly. And in fact all the modules has an important export feature in here. So you can either import, import expenses, export expenses. And the nice part is we also Integrate your spreadsheet application. If you prefer viewing the same data in a spreadsheet, you can just say view in spreadsheet. All the data is now viewed in a spreadsheet and once you have it in a spreadsheet now, you can do some analysis and maybe take your data in different format outside that integration is already done. So because we have these individual pieces, we are able to knit them well together and I think that's where one of the key values for us. Again, it's not just internal within Zoho, even external with other apps like Google.

Very cool. Well, thanks for giving me a demo. Do we want to talk about Google now? Yeah, come on, stay there. I'll give over my feet there. So yeah, you guys rely on a lot of, well, like you said, PayPal and Google and you're in. So how's the Google App Store working out for you guys?

It's been doing pretty well. We are one of the top vendors in Google Apps Marketplace, CRM projects, invoice. Today we are launching Zoho Books and and we are simultaneously launching with Google Apps as well. That explains how useful that is. And it's kind of a win win for both. Google gets a broad set of applications and for us we get to reach a different set of customer base as well.

And I like to say we are a company that emphasize no ego philosophy and all this. So Google cloud computing is such a young space right now. All of us win actually incrementally. We have to move everyone off of the Microsoft ecosystem into this cloud world. That's how we see it.

And there's a bunch of companies doing that. Salesforce first and probably the biggest so far. There's box.net, which is doing real well.

And we integrate with them too. So we would integrate with anyone that brings us an extra customer in this, you asked about, for example, that's something that we'd like to do an integration probably sometime this year as we roll out all of these.

Very cool, very cool. How's this Google Chrome notebook?

Oh, I love it.

This is a prototype by the way. It's something you can buy.

I actually just coincidentally around the same time that they gave this, my laptop developed a problem. I just started using it just for fun. I haven't replaced my laptop yet and it's been about a month now.

So what's the advantages to this?

It's instant on and this actually has a bad effect. It destroys sleep because sometimes I wake up at like 2am this is right next to me. And I just open it and it's like three seconds later, four seconds later, I'm online and I'm logging into Zoho and checking my mail and all that.

On his office thing, all he uses is Chrome. One day we asked him install something, can you open it up? He doesn't know where the program section is. He forgot Windows. It's probably been a couple of years. He opened the start programs because all he uses is the Chrome shortcut on his desktop. That's about it. Me too.

If you look at my I use Chrome and I use the Twitter app pretty much and Imovie, I still use Imovie.

It's really seriously how it has become. Now I'm on either logged into Google, I'm logged into Zoho, I'm logged into all of these sites. But I actually have forgotten a lot about Windows these days. And that's why this thing, Chrome os, it just, I smoothly transitioned off and I haven't missed my regular laptop at all. So if they actually offer it commercially, I would buy it definitely. So that's my ringing endorsement of it.

Any problems with it?

It has a track, you know, it's still a prototype. You can tell. The trackpad is not perfect yet, but I could work around it.

I think there are some. The display out is not, I think optimized yet. You connecting to a projector and write, it doesn't. I don't think there's an option yet. So there are some issues.

Battery life is excellent. I mean it's like I, you know, I didn't even bother to connect now most of the time I, you know, take hours and hours, six hours it goes, it's really nice.

Cool, cool, cool. That's fast.

Comes up, you know, you open it up, I can power cycle it under 10 seconds. If I don't, you know, I just hit the power button. It instant off and then instant on. So it really does bring in all the things that we have expected from a notebook. It's doing it and it's a prototype. So I see great potential for it. In fact, a lot of people think Android versus Chrome os. I do feel that for a business computing need where the touch is not as relevant, the keyboard and the trackpad kind of thing, this is a great.

OS in my opinion and you could probably add touch to that pretty easily.

You don't need antivirus.

Yeah, that's true.

And this is true story I last week my wife's regular Win7 laptop got a virus infestation and it took about half A day to clean it out.

And all of that.

During that time, she was really envying my Chrome OS notebook. She borrowed it at that time.

And it's pretty hard to get a virus because there's no file support really.

Right.

You can't even get to the file system.

There's no. Nothing there. It just boots into the Chrome. There's nothing to see, no other screen to see.

I like it. I like it.

And they removed all the function keys and all the function keys. They are replaced by the keys for back, refresh, forward and full screen and all these things. And these are really nice. That is all you need. You can even go full screen on this as well. So there are no browser tabs here as well. That's a pretty nice feature.

Yeah.

Interesting.

So I've become a fan, actually. I didn't expect to. I thought it's a prototype, I'll just try it. But I've been using it extensively now. Interesting.

How's Google Checkout?

We use Google Checkout for integration with Zoho Books as well as invoicing application where you can directly receive payments. Once you have merchant account, you can receive payments from your customers. That's one area we use it. The second area where we are in the process of implementing it and Google itself is rolling it out is integration with Google Apps. So Google Apps users can purchase Zoho apps using their marketplace. Now, currently the problem is they have to pay separately for both Google and Zoho. And we are integrating with Google Checkout there, where you can just stick to your Google Apps account. You can make the payment through Google Checkout even for Zoho Apps or any other apps. That's the tighter integration we are doing currently. But it's been pretty good for us. It's been working out well though with PayPal and Google Checkout and even Authorize.net, all of them have been working pretty well.

What else is going on in your world? When I first met you, I thought, oh, these guys are going to get bought by Google or even better, get bought by Microsoft to have a competitor to Google's enterprise world.

We like to stay independent. We like where we are, we are private. We like what we're doing. The freedom to write code and the freedom to innovate. So that's what we like. So you'll see us continuing this model. And it's a solid business now. Zoho Suite, now it's not just a toy anymore. It is a solid business. It's growing really fast. Lots of customers so it's a fun place to be.

I think last time we talked we probably had 1 or 2 million users. Now we have 4 million users. Adding good number of users, almost around 150,000 new users every month.

Isn't that crazy?

And it's accelerating and that basically shows the expansion of the cloud market. Now people are starting to realize that this is the way to go.

Absolutely, yeah.

For a small business it's a no brainer. I mean I would not, if I were to start a company, I would not use any of the standard desktop tools at all. I would just go on the clock.

I totally agree with you.

Just the productivity of it.

I don't load software anymore except on my iPhone which isn't quite the same thing.

It's not the same thing. It's mobile. It's a different game here once, but it doesn't business computer.

I mean I've loaded 370 apps and they don't crash, they don't bite you, they don't ruin a registry, they don't get viruses. On my Android phone, same thing. I have a lot of apps on my Android phone.

In fact, this whole mobile and the cloud play in an interesting way together. What we are seeing is a kind of a client fragmentation, something that Microsoft doesn't like, will not like, but they have no power to stop anymore. And you have at least three solid operating systems on the client now, I mean maybe four. Right. And all of them are going to have their share. And what is the common denominator in this? It's the cloud. You may have apps on these phones, but you still are going to sync with the cloud.

I think you're channeling what HP's CTA is going to talk about on February 9th when they bring up their tablet. Right. It's not about OS anymore, about the cloud.

Today it's say the mobile devices and the tablets. Tomorrow it's going to be the television. Eventually your cars, all these devices are going to be connected and Cloudy is going to be going to play.

I talked to Audi CEO about that. Right. They're putting Pandora in the car, right?

Absolutely. And recently Toyota launched something and Tesla has a nice 17 inch screen out there with a touch screen. And imagine if they open up something like an app store and pretty much you have apps connecting to the cloud. So things like these cloud becomes the central point where everything is served from.

Samsung's TVs have an app store.

Absolutely.

Cloud apps, YouTube app consumer goes first in all this. But the businesses are going, that's what I really love. And where Zoho is right now is the business cloud adoption. Particularly in SMB's where it's the most rapid pace right now it's sort of shifting up. We see it in our CRO, we get increasingly larger and larger and larger customers. We used to sell like three, five seats, now we sell 50, 100 seats. So that's how we see it. Wow.

Very cool. Well, good luck.

Thank you.

You guys look like you're going. Do you still get in the data center? The first time I met you was when you were helping small startup.

We have a full fledged team now, so I occasionally visit there but no, not currently. You should visit our data center now. It's really good, very well organized and when you get a chance, we've got.

A full time team that takes care of that.

We no longer have those individual servers. Now we have servers with racks with 72 servers all built, same configuration. It's very well built data center now.

I love data centers. I work for Rackspace. I know you guys are coload, right? That's cool. It's the first time I got into a Silicon Valley data center was with you. So I appreciate that. Little history of my life. Well cool. Thanks so much. By the way, where can we find you on the web?

Zoho.com It's Z oh.com and we'll respond through Twitter or Facebook. Twitter.com Zoho Facebook.com Zoho yeah, what about.

You guys personally on Twitter?

I'm on Twitter at Raju, V and S. Wimbu.

How do you spell S?

V E, M, B, U. Yeah, cool.

Thank you very much.

Thank you, thank you.