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Zoho Seeks To Disrupt IT Helpdesk Market By Offering ServiceDesk For Free

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With enterprises looking to achieve cost savings as their top priority in managing their IT systems, the IT help desk market is getting commoditized very fast, leaving little room for any disruptive innovation. ManageEngine, a division of Zoho, is offering its flagship IT help desk software — ServiceDesk — for free starting today, underscoring just how competitive and commoditized this market has become. Starting today, over 60,000 customers of ServiceDesk Plus Standard Edition will not pay any additional fee, irrespective of whether they are using the software in the cloud or on premise. The offer includes unlimited number of agents, users and tickets raised, processed. Previously, ServiceDesk Plus Standard Edition was free for up to five technicians/agents, the company said in a statement.

The IT services Management (ITSM) market is dominated by older established rivals such as BMC’s Remedy and ServiceNow apart from newer entrants including Freshdesk, which is actually founded by former Zoho employees. Within this market, the IT help desk portion is getting increasingly commoditized because most of the processes are repetitive and can easily be automated.

Raj Sabhlok, the president of Zoho’s ManageEngine said in an interview that making ServiceDesk available for free is a bold step, especially because it’s also the highest revenue generating software for the division. Without disclosing current revenues earned by ManageEngine, he said it runs into “nine figures” (in USD). The division is growing at over 30% annually in terms of revenue. GE Capital, Barclays, Infosys, Thomas Cook and Sony are among top users of ManageEngine globally.

“Today, customers can and typically spend thousands of dollars on help desk software — look no further than help desk software from ServiceNow or BMC Remedy. Similarly, operating systems were once a significant cost of the computing environment, but today are viewed simply as a free enabling technology,” he said.

For its part, ManageEngine is hoping to make up for whatever loss in potential help desk revenue it will incur by gaining a bigger share of the IT management market. As we reported in January this year, ITSM market is dominated by slow growing but established incumbents such as IBM, CA, BMC (Remedy) and HP. This market witnessed one of its first disruptions when ServiceNow was launched in 2004 by Fred Luddy, a former CTO of Peregrine Systems. ServiceNow used SaaS model to woo existing customers of its much bigger rivals, and is expected to report over $400 million in revenue for 2013. It’s currently valued at around $8 billion.

Clearly, ManageEngine is taking aim at much bigger rivals by offering ServiceDesk for free.

“The help desk becomes the ‘operating system’ or the fundamental building block for companies trying to organize IT. Providing help desk software at no-cost is the first step on the road to service level maturity,” Sabhlok added.

The big question is how well Zoho’s help desk compares with much bigger products that offer far deeper expertise. Also, customers need to go for ManageEngine offerings to be able to get help desk software at no extra cost. But is that a functionality customers can afford to trust a free, commoditized product with?

“Last year, we made ITIL affordable for all businesses at just $995. This is not just ‘another help desk software.’ It is one of the best in the market with loads of thoughtfully built features,” he said.

“We always say that IT organizations should never pay more for tools, than what the tools are managing – which is often the case with many vendors,” Sabhlok said. 

ManageEngine ServiceDesk Plus – Rise of Free