Zoho's product evangelist discusses the deal that never went down, dishing about Salesforce.com's corporate practices.
Vegesna said Salesforce.com is spending too much on marketing and not enough
Salesforce.com's fortified integration
with Google could bolster
both companies' strategies to tackle Microsoft in the applications market.
But the deal might not have happened if Salesforce.com acquired Zoho two
years ago. That's what Zoho Evangelist Raju Vegesna told eWEEK in a phone
interview April 14 following the publication
a controversial blog post by Sridhar Vembu, CEO
of Zoho parent company AdventNet.
Vegesna told eWEEK that as late as 2007, Salesforce.com and Zoho were in
negotiations to be at least partners, if not to consummate an outright
The SAAS (software-as-a-service) business applications leader considered
buying Zoho, Vegesna said, to leverage the company's collaboration software
suite, which Zoho positions as an alternative to Google Apps and Microsoft's
Such a deal appears to be all but dead now that Salesforce.com has
proclaimed Google as its Apps platform of record.
Courtship Before Marriage
Salesforce.com declined to comment for this report, but Vegesna said
Salesforce.com and Zoho began discussing a relationship, possibly even an
acquisition in 2006.
However, Zoho's concern about Salesforce.com cost structure, which according to these estimates
includes spending eight
times more on marketing than research and development, prompted Zoho to offer
to partner first.
"Let's date first before we get married," Vegesna said he recalled
thinking. "We thought we'd experiment as an AppExchange partner, and if it
goes well, maybe we'll take it up to the next step."
Zoho, one of the first Salesforce.com customers back in 1999 before it
started using and selling its own Zoho CRM
product, worked to integrate with Salesforce.com AppExchange in 2007.
But Salesforce.com pulled the plug a few days before it could go live,
telling Zoho it could not work with AppExchange any longer because it had a
competing product in Zoho CRM.
Later in 2007, Vegesna said Salesforce.com and Zoho rekindled
conversations, discussing a possible acquisition. Financials were not discussed,
and the talks didn't go well.
A deal was long dead even before April 14's Google-Salesforce.com bond,
according to Vegesna, who echoed Vembu's blog when he said the company's
corporate cultures were at odds.