Web-Based Applications Are The Next Wave: Zoho Shows The Way

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In the very near future more and more of the tools you will need to edit, write, collect and publish online, are going to be sitting and running on a remote server, and not on your local computer hard disk.

While many have long realized this, the largest part of Internet users has only seen glimpses of this new reality via the increased use of search engines, web-based social networking tools, image archives and online collaboration tools. But for the most part, the majority of users is still strongly anchored to their desktop based fortress, generally made up of Outlook or equivalent email program, Word and a set of more dedicated apps like Excel, PowerPoint, Photoshop, or a database tool.

Habit, good advertising, incompatibility with other formats and lack of true alternatives have made the use of these tools become more necessary than any open market and smart consumer would ever want. But now, that even Microsoft itself is awakening to the launch of an increasing number of web-based office applications, there can be no more doubt about where the future is going to take us.

Web-based applications are always up-to-date, require no physical purchase, no download, no installation and no setup. They run right away on any computer you may have: PC, Mac, Linux, or others. Web-based applications can be made more secure and reliable than many downloadable software tools available today.
Further web-based software is born with built-in collaboration abilities and with the potential to do many things more that are just not possible on the desktop.

Web-based apps also require much smaller marketing and sales budgets to distribute them globally, thus allowing many more companies to compete in this emerging new industry.

This is why I have taken the time to invite for an interview, Sridhar Vembu, CEO of Zoho, one of the early pioneering companies in this field. Zoho, supported by know-how and talent developed over ten years of enterprise management work, offers a set of web-based tools that are targeted at providing a true effective alternative to your typical Microsoft Office suite. As Dr Vembu said in this interview "...we definitely share your passion for affordable software. I come from India and I know $300, you know, paying $300 for a Microsoft Office suite is not by anybody's stretch of the imagination what can be called affordable.

When the income level in my country is like $600, asking for $300 for software just does not seem right to us, and particularly, thinking of university students and the like. So we definitely want to create an affordable alternative..."
Here is my 25-minute audio streaming interview with him as well as the full text transcript of this information-rich conversation. (also available as downloadable .mp3)

Click the play button and wait momentarily to listen to the interview

Sridhar Vembu, CEO of Zoho.com

Full text transcript of the audio interview with Sridhar Vembu, CEO of Zoho.com

Robin Good: Hello everyone, here is Robin Good, live from Rome in Italy, and today I have with me a very special person who is one of the key people behind new technologies that allows people to utilize traditional applications without ever having to purchase a disk, install software, or run a configuration file. Hello, good morning to you. What is your name?

Sridhar Vembu: My name is Sridhar Vembu. I am the CEO of AdventNet. We are the provider of the Zoho Writer suite of services. Thank you for having me Robin.

RG: Good morning Sridhar and thank you for connecting live with me today. Where are you connecting from?

Sridhar Vembu: I am actually connecting from Palo Alto, California. We are in the San Francisco Bay area.

RG: Fantastic, beautiful place, say hello to the sunshine you are likely seeing while here it is already dark at night. And you are the CEO of a company called AdventNet. Would you tell me in the shortest and most synthetic way possible, what does AdventNet do?

Sridhar Vembu: That is a good question. If you go look at our website you will see a whole collection of things. We do a lot of software. We got started about ten years ago in network management. That is where our initial start was. If you see the tabs on the top of our homepage, you will see the second tab is Enterprise Management. And then you will see the fourth tag, OEMs and Developers. So those are the areas where we got our start.

But then we branched out progressively as we grew as a company. And by the way, one interesting thing about us is that we never actually received any venture capital; we just grew organically.

We just shipped product, made some money, and then shipped more product and you know, that is the traditional kind of growth we had. And, we started progressively adding more to our line of products over the years.

The last two or three years have seen substantial growth. We have added a whole bunch of, you know, you can see the tabs on our site... and that is what AdventNet is today.

The Zoho suite of services is the most recent. We are just now starting to ship them, and that is our latest addition to the portfolio of products and services. We have recently branched out into web services in addition to offering software products.

RG: Yes, Sridhar, that is fascinating to learn about your experience. AdventNet, which your listeners and readers can find at www.adventnet.com, is truly interesting. But why do not you share for a few seconds more a little bit more about you. There are so many international users from around the planet who are interested also in what kind of person you are, how young you are, how many of you are behind this company.

I mean, what did it take you to get where you are? Has it been twenty years of work or are you a fresh graduate student out of Stanford? Let us know a little bit more about that too.

Sridhar Vembu: Actually, we were reasonably fresh out of graduate school but I myself have a PhD from Princeton University. I originally come from India, and I am from the Indian Institute of Technology in Madras that is now called Chennai. That is where I got my bachelors degree and then I came to Princeton University, in New Jersey.

My key partner, Tony Thomas, he also got a PhD from Johns Hopkins University. He was actually a couple of years ahead of me at Madras and that is how I knew him. And then there were my brothers in India, who actually were starting to work on something.

And we all came together around 1996, so it is exactly ten years now to do this. That is how - it initially started out as a small product we offered over the internet. And it just kind of grew by itself. Progressively we would see that more and more customers got interested.

Our initial customers mostly came from the networking industry, customers like Nokia and Cisco, Nortel and Lucent, those kinds of companies and Japanese companies like Minolta. So that is how we got our initial customer base.

Then we invested the profits in additional application development, and over the years we developed more and more.

The latest offering, and the most recent in our last three months we have got the Zoho Writer, that is up there, ZohoWriter.com, and we also offer additional Zoho services; Zoho.com is our brand name for our web services now.

RG: Yes, you heard it right, Zoho Writer, Zebra, Oregon, Hotel, Oregon, Writer, one word. ZohoWriter.com. W, W, W in the front, and you can find the flagship product of a family of online applications that require no software purchase in a physical way and allow you to run what you would expect to be just like traditional Office applications directly from the web. How did this idea come about, Sridhar?

Sridhar Vembu: We actually have been working on it, interestingly, for the last few years, so that our products themselves have moved to become web-based products. If you see our traditional network management products, they have all become - they used to be traditional software, say, five years ago with a user interface that is written in Java, Windows kind of user interface. But over the years customers asked for it, and we have started writing more web-based products. And that is how we got our entry into web services. About eight months ago we decided we would actually launch a whole bunch of web services ourselves rather than just offering traditional products.

And the most natural thing we looked at when we found that the whole Microsoft Office Suite had no good online alternative, so we decided maybe we would start on that and of course word processors as being the most obvious one, so that is how we got into that.

We have had actually now experience of four or five years now in which we have been developing web-based applications. And so that is you know, naturally, we gained expertise in this area.

RG: What are the key advantages for people who have not yet thought about using online application of using this new approach versus purchasing software and upgrading it in the traditional way?

Sridhar Vembu: To actually give an example, my father-in-law who actually is a regular computer user, he uses e-mail and he uses word processing; he keeps track of his documents and stuff. And about a couple of weeks ago I introduced Zoho Writer to him. Initially he was a little bit skeptical. He was not really convinced that it could do the job.

And just because, I told him, he started trying it, and within a couple of days he got really addicted to it. Some of the key advantages are that he can move from one computer to another, and he does not have to worry about it. He was already a Hotmail user before. So, web-based applications are not new to him.

But he was initially a little bit skeptical of whether a word processor could work, but once he started using it, he found that he uses it and it works.

He had concerns. Would it be fast enough? Would it lose my documents, and all of that? And once he started using it, within a few days he became addicted. Now he is actually almost a regular everyday user. He spends more time, about twenty, thirty minutes doing his documents on it.

So I think that this is the kind of thing we expect from this, the fact that we do not have to install, and the fact that there is no upgrade process and the fact that with any computer you can just quickly access it. These benefits are so enormous, and I think once people experience it, they will realize that it does the job well.

It has some advantages even more than a traditional application in that you can collaborate and share documents. So I think people, once they experience it, they would see it exactly in the same way as web-based e-mail, which has become increasingly popular over the years, so that now, you know, more and more people are choosing web e-mail as even an alternative to the traditional Outlook.

Like in our own company we have this Zoho virtual office that we provide for that. And it is I think the same thing that we do expect an online application to proliferate over the next several years.

RG: Great. I guess one of the very first questions that novice users of online applications like Zoho Writer would be wanting to ask you is, "Where do the documents and data that are generated with your application end up? On my local hard disk? On Zoho Writer's servers?"

Sridhar Vembu: We actually store the documents in our server, in secure storage. And we also provide the ability to export and import documents in and out of that server at any time. So you can take your document and we provide a multitude of formats: Microsoft Word, Adobe PDF format, as well as the Open Office format to import and export documents.

I mean, for PDF, we only provide export right now, but other documents can be imported as well. So people can take a document, and of course the HTML, it is shown in the browser as HTML, and that itself can be saved and that can be imported too. So we provide a multitude of formats where people can get in and out of the system. But it is stored in our database as in pretty much HTML-centric format, I should say.

RG: Great, so you are able to capture and import all existing documents that I may have written in Microsoft Word or in any of the standard text editor formats I suppose, like RTF or so. And you can also export to PDF, Microsoft Word doc, and HTML standard formats...we know, for example, that Microsoft Word has a bad tradition of exporting to HTML including lots of garbage within that code. What is the situation with Zoho Writer in that respect?

Sridhar Vembu: Actually, Zoho Writer treats HTML as a kind of native format. So HTML is actually quite good. That is the native format here. We enhanced it with some additional information in the database, but pretty much your document is actually primarily in HTML. You can actually check that by doing a preview of the document and you can see the HTML yourself. I can, in fact, actually log in and see it.

RG: Great, and I understand this word processor is directed not only at the American users but at people anywhere around the world. What I am referring to is the ability and support for different languages and character sets. How do you handle that?

Sridhar Vembu: Within our first month of introduction, we have introduced support for international codes and for international character sets. Now we are finding that many international users are creating and saving documents in their own format.

We have found for example, formats from various European countries and Israel. We have even seen documents from India, where our development center is. We find documents in many languages now, and, I will not say that it is all perfect right now, because our software is still in beta, but we are tuning all of this and we, you know, when we ship it on the general available date, the international support and everything should be working then.

RG: Also bloggers and independent publishers may find some good benefits from using something like Zoho Writer instead of logging onto Movable Type or TypePad platforms, and typing with their finger crossed and hoping that everything goes smooth until they save and publish. Am I correct on this?

Sridhar Vembu: There is a publish feature that you can actually see the published link that publishes your document to your blog. And we support, I believe, SixApart Movable Type, as well as the WordPress systems and Blogger. And we are adding more support as we go on.

The other nice thing about the Zoho Writer is that everything is automatically saved for you, even if you do not save. Periodically, every few minutes or so, the documents are automatically saved. In fact if you see a lot of the documents, you see that auto-save thing on the left-hand side right next to the document. That indicates that it was automatically saved for the user. And if the user manually saves it, than that auto-save message goes away.

RG: I even see support for tags!

Sridhar Vembu: You can actually tag your documents and share them with other people. As far as classifying documents, we tend not to use folders and archiving folders. Instead, we put tags on all the documents and search for documents. That is some functionality we are introducing shortly so people do not have to hunt around for where they saved the document; they just search using the tag or even the content. That is something that we are introducing shortly.

RG: What about the online collaboration abilities that are provided through your share feature? Can you tell me more about this?

Sridhar Vembu: Yes, as of right now, you could actually share a document with other Zoho Writer users. And the share link right there that tells you all that means is that they would get access to that, and you can set privilege levels so that the documents are read-only or so that they have full edit permissions. That is something that we are putting in.

You can also e-mail to other people that do not have Zoho Writer accounts, and then the document can actually be made public. You can chose to make it public so they can actually access it just with a plain URL, and that is another feature that we provide for a user who is not in the system. That can be done as well.

And we are adding and enhancing that, wherein people can actually add, you know, import and export documents even if they do not have an account. So, one example is that you can e-mail a document into the system if I supply you an e-mail address, you can e-mail me the document, just like an attachment. So you go into the system automatically.

Additionally, we are now working on integrating some chat and collaboration features into the system, so that you can collaboratively work on a document and you can chat. A small chat dialogue will appear and you can comment on it while you are working collaboratively. Those are some things that we are adding in the next couple of updates.

RG: What about the versioning capability? That is something that many people appreciate as we often go through several changes in a document and multiple alters or editors have to go through both in the publishing arena as well as within corporate information departments. There is much use of this. You seem to be offering something valuable in that direction. What is it?

Sridhar Vembu: We do provide versioning automatically for all documents. You do not have to do anything. And when it automatically saves, it automatically saves a prior version for you. And if you go into the "preview versions", and link that, you will see the old versions.

By default it stores something like ten or fifteen previous versions. The user can set the control on how many to save. And you can also see the differences between versions. For example, you can see the difference between the document that is the current version and a version saved two hours ago, or a day ago, or two days ago. So all of that is automatically done for you with no intervention on the user's part.

So this is something that we find extremely productive... so, even if you keep typing and you suddenly realize you did something, you deleted a whole bunch of sections that you did not intend to delete, you can always just go back to the previous version which was automatically saved for you.

So in many ways we are actually bringing some new functionality that is not there in a traditional word processor, to the online world. And the fact that everything is in a server also makes it instantly accessible. For example, if you saved a session, when you go back into your account, even from some other computer, your old document, whatever you were editing, comes up automatically in the very place that you left it.

So these are things that you know, you can do because it is an online application. That is, you just cannot do this in a regular desktop application. And so these are areas where, again, the user experience is even better that what you can obtain with a regular application.

RG: What about your business model? What do you have in mind to ask, if anything, out of your users in terms of pricing, cost, premium services, and the like?

Sridhar Vembu: We will always have a free edition. In fact, if you see our product line, every product, without exception, now comes with a free edition that is actually fairly generous. It is very usable. So in this case, the Zoho Writer case, the personal edition would always be offered free. That means, you know, for personal use. What I mean by personal edition is an individual using it, so it is not just a, we do not mean a non-commercial or non-copyright person; It is just anybody who is using it for one person's use.

And we would charge mainly for the collaborative edition kind of features, but in any realistic environment, your document is not just something you author and you send it to other people, but there are also multiple reviewers, multiple versions, all of that. So that is where that we enter the charge. We have not actually decided the fee, such as the product is still in beta, we would normally charge anybody, you
know, a few dollars per month kind of a thing. It is, you know, definitely under ten, but well under ten is our hope.

And we are also offering other Zoho services, so they will be tied to a bundle suite pricing. Not just for Zoho Writer, but for other things we are coming out with, and with services we have already come out with.

RG: Good, in fact I am going to ask you about those other products coming up in the near future, but before we do that, give me a little extra information about one little feature that I just discovered that is going to make many power-users happy out there, which is your Zoho Writer bookmarklet facility.

Sridhar Vembu: It is interesting because I am a regular user of Zoho Writer, and I just noticed this myself just a couple of days ago, and this is something that the development team introduced as a surprise just recently. But it is something that I use in other sites like deli.cio.us and in other web places. It is something that we are excited about... I am personally excited to have this, where you can any kind of page and essentially embed the content into Zoho Writer and following that, edit it. So that is something that many people want to do: take an existing page and add their comments or edits, and share it with other people... so, that is something that we have added. And you will see a lot more of such features in the product. I think that it is just the very beginning. In fact, it is something that came as a surprise, even to me. And you will see more of this.

RG: What about the other products in this set in which Zoho Writer is the flagship? Do you have plans to come up with an offering covering Excel, presentation, and even other typical Office applications existing out there? What is the plan?

Sridhar Vembu: We actually already ship a product called Zoho Virtual Office that actually provides a kind of web-based collaboration suite if you will. It actually employs much of the functionality you find in an Outlook or Exchange system, from e-mail, to calendaring, to discussions and all of that. It provides document sharing kind of functions. And that is actually shipped as a product today, but we would actually introduce this as a Zoho service in the Zoho suite of services. We actually intend to provide this both as a product as well as a service. You know, we feel that some users may want to run it in their timing. Some people may want to run it by us. So that is the Zoho Virtual Office you see right there on Zoho.com.

And, we have another product that is called - Zoho Planner - that is a product management kind of utility tool type of thing. It is not yet in the range of MS Project, but definitely for small teams it provides you the functionality you need to create lists and create notes and appointments and things like that. And this is actually being offered as another service, but it will also be integrated into the whole suite of services we are planning.

We are also working on a spreadsheet that should be available within this month as a beta, in January. And of course the PowerPoint-type of presentation thing is also coming.

By the way, if you zip back to Zoho.com one second, you can also see a service called Zoho Creator. That is something that we are quite excited about.

This tool is actually used to create web applications online. What is actually out right now is an invitation mode, but it should be out in a week or so that you know, anybody can sign up.

It is a tool for creating online database applications. If a spreadsheet is a small database, Zoho Creator is a new type of SQL engine to create a family of interesting set of web applications, entirely from a browser. Nothing is required to be installed, no development tool, nothing is required. You are just online, you go and create new things with this Creator application. This is one of the Zoho services.

So we have about three currently available, and we have another two or three coming in the next few weeks, actually. The Zoho Spreadsheet should be coming in this month, and the Zoho Creator should be available, generally available you know, for at least anybody to test in the next week or so. And we have a PowerPoint that is in the works that should be definitely in February, if not in January.

RG: Fantastic information, that was really outstanding. Well, thank you absolutely, Sridhar, for the very interesting information you have provided on your tools, technology, and ability to provide users with a true alternative to traditional software, disk-based applications which have to be physically purchased and have to be upgraded every year, if not much more frequently in some cases.

With the Zoho set of applications, you basically go online, and you can start, first of all, to use these applications for free without being slotted as a criminal. You can do this legally and carry out your work to find out whether you like these tools, whether they are compatible with your documents, whether they work well, and if you like them, you can go on and adopt the basic level without having to incur any further cost and paying premium prices only for really special services like sharing documents online and the like.

So, kudos for this outstanding work in this direction. I think it is much needed and I think you have great opportunities yet. I also think that the competition is going soon to heat up in this sector but you have some good advantage.

So, my compliments to you, and from Robin Good, here in Rome, this is all for today, but I leave it to you Sridhar for any question you may have for me before you leave me, or for any closing remarks.

Sridhar Vembu: Thank you, Robin. We definitely are excited ourselves, and we share the same thought that the whole application space is due for a massive change. The old way is not working for users and it is not working for companies.

We have been in the business for ten years and there is time for a change and we want to offer a compelling suite of online applications at really attractive prices. In fact for any kind of personal use, especially students and universities, they should never have to pay for any of this. That is what we believe in.

So we are very excited ourselves to be offering that, and thank you for giving me the opportunity to present this information to your readership and your listenership I should say. We would definitely love to hear feedback, criticisms, and please, criticize us. We want to know where we fall short, what things we can improve, and how we can serve even better and what kind of pricing models users like. These are the things that we would like feedback from you.

Finally, we definitely share your passion for affordable software. I come from India and I know $300, you know, paying $300 for a Microsoft Office suite is not by anybody's stretch of the imagination what can be called affordable. When the income level in my country is like $600, asking for $300 for software just does not seem right to us, and particularly, thinking of university students and the like. So we definitely want to create an affordable alternative to all of that.

RG: Thank you, Sridhar. I could not agree more and I truly appreciated your contribution. Out of good use, we can make your tool an even better one. And I think you are doing your best.

Thanks again for your time, and all the best.