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Given this competitive landscape, it might seem counterintuitive that Zoho didn't decide to focus on one or two core applications, perfect them and see if other giants in the market take notice. But Vembu seems to be in this for the long haul: he says the diversification of the Zoho portfolio not only brings more value to his users, but it also will allow the company to remain independent.

"We believe the software market will consolidate," he says. "We felt offering a breadth of apps would help us stay independent, and we believe those apps have the depth to compete."

Despite that diversification, it drew acquisition interest from Salesforce.com prior to that company partnering with Google to offer Google Apps for free for Salesforce.com customers. Vembu says that Salesforce.com's CEO and chairman Marc Benioff offered to buy Zoho from AdventNet outright, but Vembu declined based on the belief that the two companies "would not be a good cultural fit" and that Zoho had more potential to grow.

It's hard to know what the price tag for the company would have been. Since Zoho remains privately owned, they don't specify how much money they make. But in an interview on Fox Business, when asked if they made $1 million a month, Vembu replied, "it's a lot more than that."

The great compromise: Why Zoho is the best of both the Microsoft and Google worlds

Since the launch of Google Apps, the product has been met with both praise and criticism, the latter centering around the fact that Google offers fewer features and functions than Microsoft Office and offers only limited offline access for users.

Zoho has focused on bringing the rich functionality of Microsoft Office to the Web, something Microsoft themselves have failed to do for fear of cannibalizing their current business model of delivering software on premise and with higher margins. Zoho also used a Google tool, Google Gears, to make portions of the Zoho applications suite work offline.

When asked what Office-like functions Zoho has that Google Apps does not, Vegesna is able to rattle off a laundry list. Zoho Writer, for instance, has pagination, thesaurus, equation editor, footnotes, endnotes, TOC, and use of the applications with a mobile device that doesn't have an internet connection.

Like Google, Zoho also recognizes that imagining a corporation just ditching Microsoft Office entirely seems unlikely just yet. As such, Zoho boasts better integration with the Office suite than Google Apps. While the latter allows you to write a file in Google Docs & Spreadsheets and then export it to Microsoft Word and Excel, Zoho has a plug in that allows you to write files in Office and move them to the Web (in other words, files can move both ways).