Techaisle Blog

As an industry analyst, I attend numerous briefings where vendors discuss their commitment to the small and midsize business (SMB) market. The narrative is often similar, focusing on simplified features or tiered pricing. However, Zoho's recent SMZ analyst event offered a perspective that was profoundly different. It was not just about selling software; it was a cohesive, long-term philosophy for empowering businesses from the moment of conception. With a staggering 40% year-over-year growth in its global customer base in the first half of 2025, it is clear this philosophy is not just resonating – it is thriving. Zoho is proving that to truly serve the SMB market, one must be a partner in their entire lifecycle, from a simple idea to a flourishing enterprise.

The "SOHO" Soul of a Global Powerhouse

To understand Zoho's strategy today, one must look at its origin. The name "Zoho" itself is a nod to "SOHO," or Small Office/Home Office. This was not just a clever marketing acronym; it was the foundational principle of the company. From its earliest days, Zoho has focused on building tools for the smallest of businesses, understanding their unique constraints and aspirations. While the company has grown into a global technology giant with a vast portfolio of enterprise-grade applications, it has never lost this SOHO soul. This heritage provides Zoho with an authenticity that few competitors can claim. It is not an enterprise company scaling down; it is an SMB-focused company scaling up, and that distinction is critical to its success.

The Four Pillars of a Resonating Strategy

During his keynote, Raju Vegesna, Zoho's Global Chief Evangelist, articulated the strategy that is driving this impressive growth. It is a strategy built on four core tenets that align perfectly with the needs of modern SMBs.

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.

The Full Stack Unveiled: More Than Just an LLM

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.

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 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.