Salesforce-Acquisition-Mindset vs Zoho-Innovation-Mindset

Slack’s acquisition by Salesforce is not a shocking deal despite the fact a container-full of $27.7 Bn is paid. In fact, it is the second largest acquisition deal in the tech world after IBM acquired RedHat for $34 Bn in 2018. Salesforce is very well known for its history of acquisitions, some of the major ones are shown in the following image.

There are speculations that the Slack’s acquisition all started when Slack approached Salesforce to buy Quip, because Slack wanted to enhance its offerings by augmenting document collaboration features. Though the circumstances changed lately and to compete with its rival Microsoft Teams, Slack could not resist itself to join Salesforce in return of a mouth-full $27.7 Bn.

All good so far from the dollar value, but one big thing I am intriguing is the LACK OF INNOVATION!

Are we now left to just trade these SaaS products or do we really have any engineering left to build something from scratch. Slack-Salesforce is not a sort of first of such acquisitions, these deals keep often happening in the industry nowadays. Another recent one to mention is the acquisition of SignRequest by Box for $55 M.

Acquisition-Mindset vs Innovation-Mindset:

“Technology companies believe in two certainties: to survive, you have to grow, and to grow you have to innovate. There are two ways to innovate; organically leveraging internal R&D and inorganically through partnering, M&A and corporate investment arms.” - by Patrick Moorhead as Forbes Contributor?

The CRM giant Salesforce has no scarcity of resources (brains and molah) to invest in product building, but I believe the monopoly has taken over technology largely. Instead of going back to the drawing board and hitting the sketch to create wire-frames, companies have started focusing on easy money. This is what I am referring to as Acquisition-Mindset. The major disadvantage of this mindset is the real competition, and as a result only one company (the prominent one) will thrive. It would have a negative impact on the end-user as they would get less features (or at a slower rate) to taste and may be compelled to pay any asked amount for.?

While on the other hand we have companies like Zoho Corp. which believes in taking its spade always along, and the moment something of necessity is asked for, digging the field is their lovable task. These companies evolve better because they are not based on the depth of their pocket to participate in acquisition auctions but totally reliable for their research-and-development, creativity and product building strength. No wonder why this Innovative-Mindset has helped Zoho to bring Zoho Remotely within a quick timeline (I believe following Agile) when Covid19 outbroke last year. Following Zoho’s epitome, over the last five years Zoho has invented close to 25 unique business applications. If we analyse the graph this has resulted in reaping the acquisition of “USERS” by a fourfold growth within this timeline from 15 M to 60 M, which is expected to touch “1 Bn USERS” by 2023. So the difference is utterly visible between these two mindsets.

• Acquisition-Mindset (Going Bn dollars out - I agree that the number of users increase too but on the cost of innovation and guts of building something from scratch).
• Innovation-Mindset (Coming Bn users in - while obviously increase the profit side in the balance sheet and with a courage of doing something fresh)?

In 2017, Zoho had already launched the alternative of Slack as Zoho Cliq which is giving? eye-focused fierce competition to Slack and others. Zoho Cliq lets you save a fortune for almost the same features of Slack, so for 100 users a potential cost of Slack is ~ $15K whereas Zoho Cliq charges you ~ $3.2K.

A detailed comparison of Zoho Cliq and Slack (feature-by-feature) can be accessed here.

Now, let's delve a bit more in comparing the solution each of these mindsets embraced for the same market over a period of the last couple of years.

Salesforce-Tableau Deal vs Zoho’s Revamp of Reports to Analytics:

Salesforce's quest of improving the capabilities of business intelligence features within and out of its own products, ended with a deal of $15.7 Bn to acquire Tableau in 2019. By the way, it is claimed to be the most successful Salesforce’s acquisition so far.?

On the other hand, Zoho had its home-grown intermediate reporting tool Zoho Reports, which they revamped to bring intuitiveness along with enterprise features for the BI world to compete the advancement. It all happened a bit earlier than Tableau’s acquisition, somewhere in 2018, when Zoho Analytics emerged.

Salesforce could have also tried building its own BI and decision analysis product, but it chose to shell out money for the easy job. Zoho stood firm and its product team geared up to bring all imagination under one hood called Zoho Analytics. It is serving 2 million users currently. In fact many of Salesforce customers are also using Zoho Analytics, because it does the job and that too on a feathery cost.

Salesforce-Quip Deal vs Zoho Workplace:

Marc Benioff liked Quip so much that he bought it for $750 M in 2016, as it was called “marriage of communication and content”. Quip is a document collaboration product similar to Google Docs and Sheets with added team collaboration features which can be accessed right within the Salesforce interface.

One of Zoho’s flagship products is Zoho Writer (an online document editor), launched in 2005 followed by Zoho Sheets in 2006. Zoho did not just end it here, understanding the market’s trend Zoho brought an integrated centralised team collaboration solution as Zoho Workplace, which actually does ten times more than what Quip does. Zoho Workplace has 9 of Zoho’s own-farmed applications focused on - word processing, spreadsheet, presentation, team collaboration, intra-chat, document management, online meeting, email hosting and so on.

Now, post acquisition Quip is updated with releases of features, but could not extend itself from documents, spreadsheets and chat. They tried adding slides (presentation) but it only lasted for two years and in early months of 2021 it was killed. Salesforce stated the reason as “Quip’s collaboration-first environment and deepening Salesforce integrations are ultimately better suited to documents and spreadsheets than to presentations”; this excuse is nothing but could possibly be the lack of innovation!

Salesforce-AcumenSolutions vs Zoho’s Professional Services:

Salesforce saw a lucrative opportunity in generating revenue from the consulting services, which is generally done by its partners and solution providers. Last year when initializing the acquisition of Slack, Salesforce announced its grab of Acumen Solutions on the same day. The idea behind this is to give a personal touch to bridge the gap between the solution and the product.

The people-driven company Zoho, on the other hand, has a long history of helping its customers for solution mapping, technical glitches in the form of instant supporting channels such as live support chat. To add more slices of quality, Zoho had announced its professional services a bit earlier; almost two years ago. The notable point here is that Zoho’s professional services are to be provided by its own team which builds the product, not? by a third party hired (acquired) in return for money.

Salesforce’s move to Acumen has brought a hot topic in its partners ecosystem as they fear of losing customers in competing with the principal company.

Ending

I am not anti-Salesforce, or this article is not about Zoho vs Salesforce, instead it is about discussing two different mindsets which reflect on the willpower & courage of cultivating the industry with crazy innovative ideas on one side and creating an atmosphere of big-money-buys-the-small-money concept on the other side. I will go to find other innovative ideas while leaving the rest of it to you.