Can Zoho Beat Google?

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The name Zoho is a copyright-friendly misspelling of SOHO, an acronym for the Small Office/Home Office market, which is Zoho's target customer. "We want to be the small companies' IT department," says Raju Vegesna, who works as an evangelist for Zoho. "The whole industry of Web-based productivity software is evolving. It'll be at least four to five years before it goes mainstream, but it's going to happen."

The company says that 250,000 people are using its paid products, Zoho Project and Zoho CRM, and 30,000 people are using its free products--10,000 of whom signed up in the three days following the release of Zoho Notebook.

Gartner's Gall believes that online programs are best suited to people creating Web content or doing heavy collaboration. He uses Zoho Writer to create blog entries and import them into Typepad. And collaborating with Zoho's multi-user spreadsheet is "infinitely easier" than using Microsoft's collaboration tools. "I'm an intensive user of Microsoft Office, and I can't figure out how to use the collaboration tools or insert different objects into Word," says Gall.

Still, it won't be easy to displace Microsoft or to avoid the Google juggernaut. "Office is the crown jewel of Microsoft," says Gall. "I'm skeptical about any company withstanding the Microsoft onslaught." Blogosphere buzz is not the best indicator of future commercial success, since that crowd is dominated by intensive advocates of doing everything online.

Zoho's Vegesna, however, sees a lot of opportunity in new customers around the world. "In India there are eight million new computer users per month, and a similar number of new Internet users," he says, "and they've never heard of Microsoft Office."