Whilst India is clearly a world leader in IT services, its success in IT products has been patchy. Zoho, an enterprise software company is one of the few success stories in this space. It is special not just because it is a rare success but also the way the company has got here. In a start up world with frenzied capital raising and valuation chasing, Zoho has built a billion dollar business with no external funding. Furthermore, it has chosen to remain private resisting the temptation of market valuations. But it has gained plenty in return:
“By developing the company on its own terms, Zoho has been able to build a strong internal culture steeped in R&D and product development, growing slowly but steadily without having to deal with any investor interference whatsoever.
Zoho’s product catalog, which exceeds 50 products, covers everything from a traditional office suite to business intelligence, finance, sales and marketing, customer service and too many other software categories to list here. Using a freemium model to drive usage, it competes with giants like Salesforce, Google, Microsoft and Oracle yet has found a way to thrive in spite of such a harsh competitive landscape.
…Laurie McCabe, co-founder and partner at SMB Group, a research and consultancy firm that focuses on technology geared toward small and medium businesses, said Vembu’s vision is a big reason for the company’s success.
“Zoho has a very visionary founder with deep convictions that have put it on a very different path than its competitors,” she told TechCrunch, adding that on the product side, Zoho provides “sophisticated yet easy-to-use and integrated software for lots of functions, at a low price.”
Brent Leary, founder and principal analyst at CRM Essentials, who keeps a close eye on Zoho, said that the company has taken its own unique route to success.
“Zoho’s ability to stay to true their core principles without being swayed by outside forces is why I think they’ve been able to be as successful as they have been,” he said. “Not taking VC money or going public allowed the company to do things in a manner and time frame that didn’t erode the culture and heart of the company.”
The other aspect of its unique culture is capitalism with a conscience:
“Vembu now lives in India, where he helps the local community in a variety of ways. “I moved to a rural village [in India]. I like rural living, and I also want to do projects to create jobs, create talent, all of that. So we run a school. We run a health clinic here. We are building a hospital and we also have a program called Zoho Schools of Learning (formerly Zoho University),” he said.
The latter is a program that has been running for 17 years. It’s designed to give students the knowledge to work at a company like Zoho, which recruited 250 students last year. Zoho pays them a stipend and teaches them about various aspects of technology like programming and design. If students make it through the program — and Vembu said most do — they get a job offer from Zoho.
The company also puts its employees front and center as part of this overall philosophy. As an example, Vembu said that when the pandemic hit in 2020, he vowed to avoid layoffs no matter how it played out. He acknowledged that if the economic impact dragged out, Zoho might eventually need to cut salaries, but it never came to that. And he said his attrition rate stayed low during the “Great Resignation,” something he attributed to the way his company operates.
…Vembu said this is all consistent with his overall beliefs about running a company — pouring money into developing products while taking some of the profits and giving back — and he sees that as being directly related to staying independent.
“It’s also coming from us staying private because a lot of our profit we earned from business is going into this. It’s going into R&D. It’s going into more figuring out complicated technology. And it is going into all these charitable activities. One thing it is not going into is buying a private jet for myself. That’s right; it’s not going into that because I’m not interested in it,” he said, chuckling.”
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