Zoho vs. Salesforce.com Cloud CRM Rivalry Heats Up

SaaS CRM providers Zoho and Salesforce.com are intensifying their rivalry, taking the fight right to customers as they try to sway them one way or the other. Zoho, especially, has been very aggressive about airing Salesforce’s counter-maneuvers. Is there room for two browser-based CRM solutions in the IT marketplace? And how far is too far when it comes to making that push for the sale?

Exhibit A: On April 21, 2011, Zoho’s Raju Vegesna got his hands on a form letter that Salesforce.com was using to discourage potential customers from its competition. I won’t go over it point-by-point, but the short version is that Salesforce seems to think that Zoho’s offering is too unfocused to really develop a competitive, fully featured CRM solution. Naturally, Zoho said its complete SaaS ecosystem is what sets it apart, giving customers and Google Apps users alike the full range of capabilities needed to run a modern enterprise.

Exhibit B: The other major front in the Zoho vs. Salesforce mindshare war is price point. Zoho CRM is $25 per user per month for the enterprise edition, whereas Salesforce charges $125. Naturally, it’s Salesforce’s position that you get what you pay for. But yesterday, when Zoho discovered that its company name was a Salesforce coupon code that would bring the price down in line with what Zoho charged, company executives were downright gleeful.

In fact, its official blog entry on the matter encourages all Salesforce users to call their resellers and sales representatives and mention Zoho until they got that deal. Of course, Zoho noted that users who want all that functionality and savings without having to use a coupon code might want to look into the Zoho solution.

Marketing and customer-acquisition wars between IT service developers are nothing new, needless to say. Both companies have inspired a certain amount of loyalty in the solution provider marketplace, and there’s certainly a good case to be made for deploying either.

But while both of them are competing for the CRM marketplace, frankly, this kind of squabbling brings the whole tone down. Taking potshots at each other leads to the very strong possibility that all but the most rabidly cloud-positive customers will take a pass on SaaS until a market leader emerges.

Follow Talkin’ Cloud via RSS, Facebook and Twitter. Sign up for Talkin’ Cloud’s Weekly Newsletter, Webcasts and Resource Center. Read our editorial disclosures here.