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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.
Anurag Agrawal

Is Zoho's AI Gambit a Masterstroke or a March into a Quagmire?

Zoho, a company that has long prided itself on a vertically integrated, "own-the-stack" philosophy, has thrown down a significant gauntlet in the AI arena. While the rest of the industry has been loudly proclaiming AI capabilities, often built on a handful of mega-scale Large Language Models (LLMs), Zoho has been quietly building. Now, the curtain has been pulled back, revealing a comprehensive, multi-layered AI strategy that culminates in a move few might have predicted: their own homegrown, built-from-scratch LLM.

As an industry analyst, the immediate question is whether this audacious strategy is a masterstroke of vertical integration that will deliver unparalleled value, or a resource-intensive march into a highly competitive and rapidly evolving quagmire dominated by tech giants.

techaisle zoho ai llm blog

The Full Stack Unveiled: More Than Just an LLM

Anurag Agrawal

Empowering Enterprises: Zoho's AI-Driven Solutions and Long-Term Vision

Zoho is strategically positioning itself as a major player in the enterprise market, moving beyond its traditional focus on small and medium-sized businesses. Zoho's approach is centered around AI-driven solutions, vertical-specific platforms, and a growing partner ecosystem. The company is leveraging its vertically integrated technology stack, from data centers to applications, to provide unique use cases for its diverse customer base. By focusing on these core areas, Zoho empowers enterprises with customizable, scalable solutions that address their needs while emphasizing data privacy and long-term value. Zoho is also transitioning from being a product company to a platform company that enables customers to collaborate with Zoho to transform their businesses.

 Zoho's AI Strategy: Context, Privacy, and Practicality

In the rapidly evolving landscape of artificial intelligence, Zoho is taking an approach grounded in its core tenets of privacy, value, and long-term thinking. Zoho's AI strategy, as revealed at ZohoDay, is not about hype or flashy demos but about delivering practical, contextual AI solutions that truly benefit its customers.

A key differentiator of Zoho's AI approach is its emphasis on contextual AI. Rather than offering generic AI tools, Zoho focuses on embedding AI within its various applications, tailoring it to specific business contexts. This approach, embodied by "Zia," Zoho's AI assistant, ensures that AI is not just a feature but an integral part of the user experience. For instance, AI is used to automatically categorize scanned receipts, detect phishing emails, and translate documents. These are not just AI for the sake of AI but AI that enhances productivity and simplifies workflows. Zoho notes that the best AI implementations are those that "fade into the background". This approach ensures that users benefit from AI without being overwhelmed by it.

Another distinguishing quality is Zoho's commitment to data privacy. Zoho is adamant that it will not use customer data to train its generic AI models. Instead, customer data is used to train models specific to that customer. This commitment to privacy is not just a policy but a core value that underpins Zoho’s AI strategy. It emphasizes that data without a permission layer is "extremely dangerous" and that their systems are built with this in mind. This resonates with increasing concerns about data privacy and security, making Zoho a trustworthy partner in the age of AI. Zoho utilizes Large Language Models (LLMs) in a variety of ways, with a focus on both internally hosted and third-party options. It has created an AI bridge allowing connectivity to multiple third-party public LLMs and hosts its own LLMs in-house, such as Llama and Deepseek. This bridge enables customers to choose a generic LLM for their entire instance. Additionally, Zoho is working on its own foundational, homegrown LLMs with 7 billion and 13 billion parameters, with a public launch expected this year. Zoho also uses smaller models for specific tasks, like email security, where a combination of models is used.

Zoho’s AI strategy also emphasizes delivering value. AI features are, in most cases, offered as part of Zoho’s existing offerings rather than as additional paid add-ons. This ensures that customers gain access to AI capabilities without paying extra, aligning with Zoho’s philosophy of making technology accessible and valuable.

Zoho is also playing the long game with its AI strategy. It is willing to make investments today that may not make sense in the short term but will pay off in the long run. This long-term view is vital to remember in a world where many tech companies are chasing the next quick buck. Zoho is carefully investing in building a complete and robust AI ecosystem, controlling the entire tech stack to enable unique use cases.

The company's approach to AI agents further underscores its focus on control, privacy, and customization. Zia Agents are built on a flexible architecture that allows customers to choose from various LLMs, both public and self-hosted, using Zoho's AI bridge. This gives customers control over their AI environment. The agents are also connected to multiple data sources, including structured and unstructured data, and have access to a rich set of tools and skills. This makes Zoho’s AI agents highly capable and customizable.

The introduction of Zia Agent Studio, a low-code tool that allows customers to create their own AI agents, further emphasizes Zoho’s commitment to customization and accessibility. This empowers businesses to tailor AI to their specific needs rather than rely on generic solutions, extending the value proposition further.

Zoho's Platform Strategy: A Composable Approach

Zoho's platform strategy, as articulated at ZohoDay, stands out for its composable architecture. This approach combines the power of pre-built applications with deep customization capabilities, a significant differentiator that allows Zoho to cater to many customers, from small businesses to large enterprises.

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Anurag Agrawal

Zoho Unveils AI-Powered Analytics Platform to Address Modern Data Challenges

In today's data-driven landscape, organizations grapple with myriad challenges stemming from the increasing volume, velocity, and complexity of data. These challenges encompass data governance and management, the need for predictive and prescriptive analytics, the democratization of insights, and the rapid pace of technological advancements. To address these complexities, Zoho has introduced a new AI-powered self-service BI and analytics platform.

Since 2009, Zoho has been a prominent BI and analytics platform player, offering a robust foundation for data management and preparation. Zoho's self-service analytics platform is highly versatile and capable of running on Zoho's cloud, third-party clouds, or on-premises. Furthermore, Zoho caters to the embedded market, enabling third-party applications to leverage its analytics capabilities for insights within their business tools. As of the end of 2023, Zoho serves a substantial customer base of 17,000 directly paying organizations for Zoho Analytics, with over 70,000 businesses utilizing Zoho Analytics daily, embedded as part of any other Zoho apps. While Zoho One is widely recognized as its flagship suite of applications, the widespread adoption of Zoho Analytics within Zoho One, second only to Zoho CRM, across customer and employee experience applications, finance, marketing, and low-code applications, underscores its simplicity, reliability, and value.

zoho analytics logo lockup

Zoho Analytics is a powerful tool that offers both descriptive and prescriptive capabilities, enabling businesses to extract valuable insights and make informed decisions. Its descriptive features allow users to delve into historical data, understand past business trends, and identify key drivers. On the other hand, its prescriptive capabilities, driven by machine learning and AI, provide actionable recommendations to tackle specific business challenges. This includes features like decision intelligence, which assists users in understanding the root causes of certain events and how to respond effectively. By integrating these two types of analytics, Zoho Analytics not only helps businesses comprehend their past performance but also guides them in making proactive decisions to enhance future outcomes.

Let us explore why Zoho is emerging as a market differentiator in AI-powered self-service BI and analytics platforms. Its unique blend of features and capabilities makes it a compelling choice for organizations seeking to harness the power of data-driven insights.

Data Velocity and Diversity - A Modern Challenge

In today's digital age, organizations rely on many applications to manage their operations, resulting in a deluge of data. With modern enterprises often utilizing over 100 applications, the volume and variety of data generated are staggering, encompassing both structured and unstructured formats. To address this challenge, Zoho offers a comprehensive data management hub that provides a solid foundation for organizations to handle their data effectively. Zoho's platform excels in data integration, supporting over 500 data sources and facilitating real-time stream processing. This enables businesses to extract data from cloud data warehouses, files, feeds, and other unstructured sources seamlessly. Moreover, Zoho's commitment to innovation is evident in its ongoing expansion of data connectors, with plans to add 25 more soon. The platform's ability to process data in real-time from systems like Kafka, PubNub, or Cloud PubSub empowers organizations to efficiently collect and analyze data from diverse sources, regardless of their structure or format.

Anurag Agrawal

Zoho: A Mid-Market and Up-Market Powerhouse - Examining its Suitability and Strengths

In an era of globalization, businesses often pursue economies of scale and standardized solutions. Zoho, a global software behemoth with Indian origins, is carving a distinctive path. It has embraced a unique business strategy known as “transnational localism.” This approach intertwines global connectivity and local grounding, fostering local economies while partaking in the exchange of knowledge and culture. Transnational localism, as defined by Zoho, is a decentralized strategy that harnesses the benefits of a global scale while maintaining deep roots in local communities. It transcends the conventional “think global, act local” mantra, offering a more nuanced and influential method to tackle today’s complexities. This strategy is implemented through a tripartite approach:

  • Developing a Global Technology Stack: Zoho creates its software products suite, ensuring total control and adaptability.
  • Empowering Local Teams: Zoho sets up regional offices staffed with local talent, enabling them to tailor solutions to specific market requirements.
  • Prioritizing Local Communities: Zoho invests in local talent development, infrastructure, and social initiatives, nurturing a sense of collective responsibility and growth.

Transnational localism strikes a balance between global outreach and local engagement. It involves establishing offices in less affluent locations globally, injecting investment, expenditure, and job creation into these areas. The company stays globally connected, not just digitally, but also through a shared ethos and culture, while remaining locally anchored.

Zoho’s CEO, Sridhar Vembu, characterizes transnational localism as a strategy that sources talent from regions often neglected by other companies. These are typically areas experiencing talent emigration, leading to hollow communities. Zoho strives to reintroduce opportunities into these regions, commonly drained into urban centers.

Zoho IMG 9649

Beyond the Numbers: Real-World Examples

Zoho’s dedication to transnational localism extends beyond mere theory. It has actualized this philosophy by setting up a global network of over 25 offices in rural areas. Many IT suppliers overlook these locations for opportunities compared to their metropolitan counterparts. For instance, Zoho has an office in McAllen, Texas, with nearly 150,000 residents within a metropolitan area housing over a million people.

Another notable instance is Tenkasi in India, where Zoho inaugurated its first rural office. Despite being a city of nearly 100,000 people, Tenkasi is considered rural compared to India’s major metropolitan areas. In Tenkasi, Zoho operates a remote farm and an elementary school, both flagship initiatives in its rural revival strategy.

Zoho demonstrates its commitment to social responsibility in several ways. It has invested in rural India through its "10,000 Schools" program, which bridges the digital divide by providing digital infrastructure and training to schools. Additionally, Zoho empowers local communities by establishing offices in smaller towns across the US and Europe, fostering diversity and creating local job opportunities. Finally, Zoho tailors its product suite to specific market needs, showcasing its commitment to global inclusivity by respecting cultural and regulatory contexts.

The Impact on Zoho's Business: A Multi-Faceted Success Story

Transnational localism has significantly influenced Zoho’s business, propelling its remarkable growth. By the end of 2021, Zoho had amassed 500,000 customers, over 70 million users, and 40,000 customers on Zoho One, a product launched in 2017. One of these customers had 32,000 employees utilizing Zoho One. Fast-forwarding to 2024, Zoho’s customer base has expanded to over 750,000, with over 100 million users across 150+ countries.

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