Zoho is Getting Serious About Vertical SaaS

Zoho spent more than two decades building software that could work across industries. Now, it is moving in two directions at once.

The company wants AI to make its broad suite feel like a single system. Zia Chat is the first part of that effort, bringing information and workflows across Zoho's applications into one AI interface.

At the same time, it is venturing into vertical SaaS—building software around the specific rules, workflows, and requirements of industries such as banking, healthcare, automotive, and retail.

Zia Chat is built into Zoho’s business applications and can connect with external systems through Model Context Protocol (MCP) integrations. It can retrieve information, analyse business data, create reports and presentations, draft emails, assign tasks, and trigger workflows based on a user’s permissions.

“Every day, employees waste their time navigating menus, hunting for dropdowns, and fighting with fragmented software interfaces. There is an interface crisis, and people spend too much time searching for the right context and data,” says Sridhar Vembu, Chief Scientist and Co-founder, Zoho.

“We strip away the UIs of different applications and give employees a single, unified AI interface across the business,” he adds.

Zia Chat can connect information across sales, marketing, support, HR and finance. Users can, for example, ask it to review a customer account, summarise support issues and payment history, identify risks, and prepare a presentation before drafting a follow-up email and creating tasks for the account team.

Vembu says Zia Chat combines the unstructured knowledge captured by large language models—such as from books, videos, newspapers and other sources—with the structured business information stored across enterprise systems. It brings together the data models used across Zoho's applications and connects them with AI. 

Vembu describes the company's broader approach as treating AI as a new form of interface for its software. “AI is the new UI…We call it ‘ubiquitous intelligence’,” he says.

Built with Guardrails

Vembu says connecting enterprise data to AI cannot be handled by simply giving a large language model access to company information.

Enterprise systems contain customer information, emails, confidential documents, and other sensitive data, while some businesses also have regulatory requirements around how information can be accessed and processed.

“You cannot simply just hook all the data and let the LLM take care of it because this data comes with guardrails,” Vembu says.

Zia Chat uses the authentication, privacy, security, and compliance controls already present across Zoho's applications.

It is also not tied to a single AI model. Vembu says Zoho plans to support frontier models, open-source models, and smaller specialised models trained for Zoho’s own information architecture.

Vertical SaaS Push

Zoho is expanding beyond its portfolio of horizontal business applications into vertical SaaS, launching industry-specific products across seven sectors, including automotive, financial services, healthcare, education, retail, real estate, and restaurants.

Anand Nergunam S, Vice President, Revenue Management and Growth at Zoho Corporation, says the company sees an opportunity to combine its existing suite of horizontal applications with software tailored to the workflows, regulations, and operating environments of specific industries.

Zoho has historically built a broad portfolio of applications covering functions such as CRM, finance, HR, marketing, and collaboration. The company brought these applications together through Zoho One, creating a common platform and shared data layer.

Nergunam says the next step is enabling interoperability across businesses. “They operate within their own industry practices, regulations, and customer expectations,” he notes.

Vertical applications, he says, can address specific workflows and compliance requirements that generic business software cannot fully cover. 

The company also sees fragmented technology stacks as a problem. A mid-sized business can use 175–200 applications, according to Nergunam, with larger organisations using even more. These applications are often loosely integrated, creating problems around data and context.

“When you put an agent on top of it, the whole thing gets super messy, and obviously agents go rogue,” he observes.

Understanding Industry Context

Zoho’s vertical SaaS strategy is also tied to its AI push. 

Nergunam says there are three levels of AI context: generic AI understands language, application-aware AI understands an application’s data, while industry-aware AI can connect industry-specific functionality with horizontal applications and an organisation's strategy.

“We are in a great position to be able to address this because we are offering a very large suite of tightly integrated horizontal apps. Now we are getting into the space where we are also coming up with vertical-specific solutions,” he says.

Zoho plans to connect the vertical applications with its existing products through a shared integration layer covering identity, data, and workflows. This, according to Nergunam, could give Zia Chat access to a deeper layer of customer and industry context.

Co-Creation Approach

Zoho is using two approaches for its vertical products. 

In automotive, financial services, education and healthcare, it has built applications from scratch for specific industry requirements. In retail, real estate, and food and beverages, it has taken existing products and adapted them to their needs.

Moreover, rather than building every vertical product entirely within its R&D teams, Zoho has spent the last three years working with what it calls ‘lighthouse customers’. The company works with a customer to build a solution, identifies what is common across multiple customers, and then productises those components for wider use.

In automotive, Zoho developed its AutoDMS with Mercedes-Benz and Force Motors. The platform covers sales, service, dealer management, and customer experience, while integrating with ERP and warranty management systems. It can also connect with Zoho applications such as Zoho Contracts, People Analytics, and Flow.

The rollout initially happened in India, with Zoho now expanding the product to other markets.

In financial services, Zoho worked with Cholamandalam Investment and Finance Company to develop a loan origination system called Zoho LOS. The platform handles the loan origination process and connects with credit bureaus, statutory validation systems, account aggregators, and loan management applications.

Retail is an area where Zoho already has a broad product presence. Its retail stack includes a point-of-sale system, ERP, payments, commerce tools, reputation management, and RetailIQ, a CRM built for retailers.

RetailIQ provides customer information such as buying patterns and preferences and connects with loyalty programmes and campaign tools. The system is also integrated with payment and POS systems.

In healthcare, Zoho is launching MedScribe, an AI tool for doctors and clinicians. With patient consent, it can record doctor-patient conversations, convert them into structured data and send the information to electronic health record systems.

In education, Zoho is extending Zoho Classes with Zoho Campus, which focuses on administrative workflows such as fee management, subject allocation and communication between administrators and teachers.

Zoho is also launching a real estate-specific CRM for India and the US. The product connects with property portals, advertising platforms, and multiple listing services, allowing realtors to manage the process from lead generation to deal closure.

For restaurants, Zoho is launching Zoho POS, building on its existing POS platform with features specific to restaurant operations. These include menu and kitchen management, dining and table service, omnichannel order management, self-ordering, catering, and event management.

The platform also connects natively with Swiggy and Zomato and can integrate with ERP systems.

The Bigger Picture

Zoho sees vertical SaaS as a new growth channel rather than an extension of its existing products.

The strategy is to enter an industry through one specific application and then expand into adjacent workflows. A retail POS product, for example, can lead to CRM, marketing automation, and ERP products tailored to retailers.

The broader goal, Nergunam says, is to build “one business operating system, purpose-built for every industry”.