Zoho is a global brand in the dynamic, fast-growing B2B SaaS industry which is projected to reach $1 trillion by the year 2030. Founded in the year 1996, Zoho is an Indian multinational corporation specialising in cloud-based business software solutions. It provides a comprehensive suite of applications designed to streamline operations for businesses of all sizes. Zoho deploys over 55 integrated apps through web and mobile platforms for almost every business department like CRM, finance, human resources, marketing and more. The company shunned the conventional Silicon Valley Model by avoiding external funding and remaining a privately-held entity. It crossed 100 million users across its various business applications in the year 2023. Zoho is profitable and was recognised as one of the best-managed firms in India by Deloitte in 2022. You must be wondering how did a boostrapped venture grew and became a global brand? How does it operate? What are its revenue streams? Let’s find out.
Zoho Business Model: Product-led and Long-term Sustainability
Zoho has adopted the “Marketing via Engineering” business model, prioritising high-quality, user-centric software solutions that drive organic adoption. The company neither provides a platform for advertisements nor monetises user data. Zoho’s freemium model enables the users to sign up for free initially, followed by paid upgrade to premium features, if needed.
Each of the more than 55 business applications offered by Zoho is designed to solve a specific problem. These include but not limited to Zoho CRM to integrate sales, marketing and customer service activities within a single platform, SalesIQ for managing sales operations, Zoho Writer to create and share documents on cloud, ManageEngine for IT and project management, and Zoho Analytics.
Zoho bundles over 45 applications for CRM, finance, productivity, IT management, HR and analytics into an interconnected system, called Zoho One. This all-in-one platform is particularly beneficial for small-and-medium-businesses (SMBs) because it allows them to manage numerous operations through a single platform, instead of purchasing different kinds of tools from multiple vendors.
Since Zoho functions without external investors, it is able to invest 60% of its revenue in research and development. This approach has immensely helped the company in developing its own version of third-party tools, which play a decisive role in attracting new customers and retaining the existing ones.
| Company | Zoho Corporation |
| Establishment Year | 1996 |
| Founder | Sridhar Vembu, Shekhar Vembu and Tony Thomas |
| Headquarters | Chennai, Tamil Nadu, India |
| Industry | Software |
| Net Worth | $12.5 billion |
| Revenue In 2024 | $1.5 billion |
How Does Zoho Makes Money?
1. Subscriptions
Zoho’s core revenue comes from monthly or annual subscriptions to cloud applications like Zoho CRM, Zoho Mail, Zoho Writer or its all-in-one Zoho Bundle. The customers pay on the basis of storage needs, user count and features. Freemium model means the plans start from as low as free for small teams to paid plans, including enterprise-level pricing.
For instance, Zoho Bundle, with its suite of over 45 integrated business apps, is available in Essential and Standard plans. Essential plan is priced at $9/user/month or $108 per year. Standard is divided into Flexible plan of $90/user/month and All Employee plan of $37/employee/month.
2. Consulting and Implementation Services
Zoho charges a one-time fee to assist businesses in integrating and optimising its tools. The services include custom implementation, training and consulting.
3. Software Product Licencing
Zoho earns revenue by selling licences for its software packages for various business needs. The hybrid licencing model covers both perpetual and term licences.
4. Software Maintenance Services
Zoho generates revenue through continuous software maintenance services provided to its clients. These services ensure that the products receive frequent updates, patches and additions.
Brief History of Zoho
Zoho was founded as AdventNet Inc. in the year 1996 by Sridhar Vembu, Shekhar Vembu and Tony Thomas. It started operations as a provider of network management software. The company launched its first web-based product, ManageEngine for IT management, in 2001. It was followed by the launch of its first software product under Zoho brand, Zoho CRM, in 2004.
Zoho suite rapidly expanded in the 2006-2008 period. AdventNet Inc. was officially renamed to Zoho Corporation in the year 2009. The all-in-one platform Zoho One was launched in 2014. By the year 2020, Zoho had crossed 50 million users. The company opened multiple data centres in UAE, Saudi Arabia, Indonesia and South Africa in the year 2022. Zoho’s annual revenue surpassed $1 billion in FY23.
