The comparison between on premises software (traditional) and cloud computing (emerging/maturing) are made on a variety of levels, with a primary element being cost.
The ROI of any technology is always far more than the price on the box. One needs to factor in the costs of administration, servicing, security, backup, training, availability, customisation and heck, the list is loooong.
Just hold that list in mind a moment and digest a comment made by Microsoft CEO Steve Ballmer at the 2011 Microsoft Worldwide Partner Conference...
For every $1 Microsoft makes on its software, partners make $8.70 in additional revenue servicing and customizing these products
Raju Vegesna at Zoho summed this up very succinctly.
"If integration costs more than software it is a bug, not a feature."
With close to 30 products offered Zoho obviously understands the value of integration. Early products were developed and the effort seemed to be on digging deeper and deeper to make very full featured standalone products.