We felt that Web Office vendor Zoho best represented the ‘LittleCo’ ethos this year, due to its David vs Goliath effort in competing head on with products from several very large companies: Microsoft Office, Google Apps, Salesforce.com’s core CRM platform.

Zoho not only competed with these bigcos, they were innovative and scrappy about it. And in a year that will be remembered for the economic downturn, Zoho is a reminder to us all that we can work ourselves out of a down economy.

Zoho made two of our year-end Top 10 Products list – in the International category and in the Enterprise catagory. It is an Indian startup that offers a number of office tools, project management software and CRM solutions. It made serious advances with its office productivity suite during 2008, reaching a milestone of 1 million users in August this year.

Some of the specific highlights this year include: updating Writer at the beginning of 2008 to include support for the DocX file format, along with several other features; adding support for Visual Basic compatible macros to Zoho Sheet in April, then macro record and playback four months later; releasing a marketplace in September; Zoho Mail emerging from private beta in October, while offering offline support via Google Gears.

Our one note of caution with Zoho is that, as you can see from the above screenshot, it has so many products that it potentially spreads itself too thin. Some of its products show a lack of depth as a result – we focused on some of those issues in a post in September. So we’re not claiming Zoho has the Web Office market cracked, just as Twitter had some issues last year when we chose it as our Best LittleCo. But overall, we applaud Zoho for its continued innovation and for competing effectively against the big guns!