I found it interesting to read Bill Snyder of Computerworld put Salesforce.com CEO, Marc Benioff in what Snyder calls, “our Bozo Hall of Fame.”  He walks the reader through the drama that unfurled about a year ago when Salesforce.com began some type of talks with Zoho’s CEO, Sridhar Vembu about bringing the Zoho productivity suite to the Salesforce AppExchange.  Snyder attributes the “award” to Benioff for how the whole process went down and eventually fizzled to nothing.  What adds to the intrigue of this story is the timing of Salesforce’s strategic alliance with Google over the past year.  Though we don’t have many details from the article, here’s kind of what I’m kind of thinking went on.

Going back even a little further than this story recounts, I remember having a discussion with Salesforce back in 2006 about Zoho.  At the time, we had a Salesforce product manager and a few services guys in our office to discuss a project.  Off the cuff, I asked if the product manager had ever seen Zoho CRM.  Since he hadn’t seen it, I decided to take a few minutes and show him what I’d seen in it by getting a free Zoho CRM license.  We walked through the app a bit and honestly, we had a good laugh about just how similar Zoho and Salesforce really were, once you strip away the on-screen formatting.  While you can’t say that Zoho had nearly the features that Salesforce had at the time, it was still striking how much it appeared that Zoho emulated Salesforce CRM.  The Salesforce guys kind of laughed it off as imitation being the sincerest form of flattery.

We also found the Zoho CRM logo humorous.  Notice how the Zoho blocks are similar to the Salesforce “S Cube” logo which appears to now be retired.  And notice that the font of “CRM” appears to be strikingly like the signature logo of the company formerly known as Siebel.  What a coincidence?

Now fast forward to 2007.  The Google / Salesforce alliance gets it’s kickoff on June 5.  That alliance really started with Google Adwords and the launch of Salesforce Group Edition.  I’m going to guess that more than just AdWords talks had taken place during that year, though nothing more was released.  No doubt, talks about Google Apps were happening too 

Then, according to Snyder, sometime before Dreamforce 07, Salesforce asked Zoho to put development effort into integrating with Salesforce and offering it on the AppExchange.  Salesforce still had no office suite that was fully integrated to Salesforce CRM, so Zoho seemed to make sense.  Salesforce knew full-well that Zoho had a CRM product that would compete, but they wanted to see the office suite integration.  A later meeting between Salesforce and Zoho brought them to putting a stop to the offer to bring it to the AppExchange due to the competing CRM.  Salesforce then offered to buy Zoho out, though Zoho’s CEO refused.  Vembu wrote on the Zoho Blog on November 4 with the headline, “Mr. Benioff, Tear Down That Wall.”  Now if Zoho CRM had defined their company, I can see them being a little miffed at their flagship being absorbed (or annihilated) by a merger, but their many products defined Zoho, not just their CRM.  

Move forward to April 2008 and the launch of the full Google Apps suite, fully integrated with Salesforce.  That was a huge announcement which led to tons of possibilities and speculation.  While I know Google and Salesforce have become best pals, I wonder where that Google alliance would be today if Vembu had accepted Benioff’s offer to buyout Zoho.  Frankly, I’m glad Zoho walked away, but I wonder what Dreamforce 08 would have been like if Salesforce had it’s own office suite.

Though I can’t point to just when, I really thought I remember Marc Benioff being complimentary to Zoho in the past, on a quarterly earnings call when talk of office productivity suites came up.  Either way, now he gets to be complimentary to Google instead.

Regarding Snyder’s “Bozo” award, I can’t really say that I think it’s deserved.  Think of every corporate merger and buyout that happens.  If there are competing products in both the former companies, it’s not so unreasonable to expect the stronger one to win dominance and drive the other to obsolescence.  That’s business.  Not everyone will like it, but that’s the way it works.  Now he may be wishing that Salesforce had just let Zoho go out on the AppExchange as is.  But think about which one will drive more revenue to Salesforce.  Zoho on the AppExchange or Google Apps native in Salesforce? We know the answer, and that’s the way Marc Benioff has chosen to take his company.  Good for us.