Zoho has updated the Zoho One pricing - what does this mean for you?

20.09.18 10:49 AM By Matt Koopmans

NOTE: from February 15 2019 the Zoho has updated the price list for Zoho One, and the minimum requirement for 5 users is no longer in place. To  read more: https://www.aurelian-group.com/blogs/post/zoho-has-updated-the-price-of-zoho-one-again-and-it-is-great-news  

This week, Zoho introduced a new pricing structure for Zoho One - effective immediately. This pricing has a significant impact on small businesses with less than 5 employees - and I have received a number of queries on this. This blog entry sets out what the changes are, it is not a critique on the model. Overall - comparatively to the rest of the market, Zoho still has the most comprehensive offer of products at a very competitive price point.

Newly introduced "Flexible User" pricing

Zoho One used to be priced exclusively on a "Per Employee" basis - in other words, you were required to license all employees to Zoho One, regardless of their use of the programs (given there is Email, Productivity, and HR in the suite, this actually makes a lot of sense). Zoho has introduced a "Flexible User" Licence - which allows you to name the users you wish to provide access to as a subset of your employees. The price for this model is $125 per user per month (if paid monthly), dropping to $100 per user per month if paid annually.

Newly introduced minimum licences for "All Employee" pricing

Prior to the introduction of the price changes, Zoho One "All Employee" licences were available to any size business, with a minimum of One (the Solopreneur). With the new pricing model, there is a minimum of 5 employees to be able to access the price of $45 per employee per month ($35 per employee per month if paid annually). If you license less than 5 employees, you are automatically referred to the "Flexible User" pricing.

The mechanics behind the licence

Zoho One remains a bundle licence - whether it is the Flexible User licence, or the All Employee licence. In other words, you acquire the licence of a named user to access all 40 employees. This means that if you have two people accessing different applications (i.e. 1 person using Books, and 1 person using CRM), in the Zoho One Flexible User plan, you must license two users. Following table shows the implications for businesses up to 5 employees (all figures are in Australian Dollar and monthly fees, based on monthly or annual payment plans):

Number of licences Flexible monthlyAll employee monthlyFlexible annuallyAll employees annually
1$125$225 $100 $175

From the pricing table above, one can conclude that for organisations with 2 employees or more, the All Employee licence is cheaper - given the mix of applications (such as productivity, email and CRM) - it is the most feasible scenario. In effect it is a price increase for sub 5 employee companies. For companies with 5 or more employees, the "All Employees" plan is unchanged, other than the fact you cannot downgrade to below 5 licences.

Who is affected?
I am a current subscriber with more than 5 employees

Current subscribers with more than 5 employees, continue as usual, with the only caveat that you cannot downgrade to below 5 employees

I am a current subscriber with less than 5 employees

Current subscribers with less than 5 employees are part of the Grandfather Clause - you will be able to continue your current plan, unless you downgrade or cancel. I have been told that you will be able to incrementally upgrade (i.e. from 1 to 2, from 2 to 3, and from 3 to 4 employees, but I have not yet seen a formal statement on this from Zoho, but as soon as I do, I shall link it here. UPDATE: the requirement for minimum of 5 employees has been scrapped - therefore new and current subscribers will have no issue up or downgrading their subscription. https://www.aurelian-group.com/blogs/post/zoho-has-updated-the-price-of-zoho-one-again-and-it-is-great-news 

I am in a trial with less than 5 employees

If you have started the trial before the new price came into effect (September 15)- and you have not cancelled the trial, then Zoho has confirmed with me that the original pricing would be honoured (the price you were expecting when you started the trial). This is not an automatic process, so if you are thinking of converting, talk to your partner (or if you started the trial without a partner - you can contact me) and we will coordinate with Zoho for the conversion. A word of caution - this may take a few days to complete - don't wait till the last day of your trial.