Finding Zoho! What works for Sridhar Vembu's tech firm?  

Enterprise software and tech company Zoho's India business grew 37 per cent in 2022, despite trends of cutbacks in discretionary IT and tech spending observed across the economy, CEO Sridhar Vembu said on Monday at the tech major's annual conference Zoholics. This has made India Zoho's fastest growing market.

Zoho's 2022 India growth

The CEO explained that Zoho's growth in India is driven by its diverse portfolio of products and suites that are witnessing increased upmarket as well as mass-market adoption. Products driving the growth in India are Zoho One, Zoho CX suite (CRM and CRM Plus), Zoho People, Zoho Books and Zoho Workplace. Moreover, the industries witnessing adoption of Zoho in India are-- IT Hardware, BFSI, manufacturing, education, and retail. 

Zoho has also grown its partner network in India by 30 per cent YoY. To support its rising upmarket growth in India, the company has opened sales offices in ‌Delhi, Mumbai, Bengaluru, Kolkata, and Hyderabad, and expanded its SI (System integration) partner network, Vembu added.

Latest product launch

Apart from India numbers, the CEO also spoke of the latest product launched by the company, Zoho Cliq. In Vembu's words, Zoho's enterprise software is the mix of Zoom, Slack, and MS Team's capabilities, all rolled into one.

"Zoho Cliq is the most refined collaborative platform in the world. Zoho offers the operating system for business and we call Cliq the operating system for Zoho. The entire functionality of the Zoho suite is increasingly available through Cliq, with its beautiful messaging interface. This allows employees across a large organisation, like Zoho Corp. itself, to communicate and collaborate, provide data in real time to apps, and consume reports, all from the world-class interface, across the desktop and mobile platforms," he explained.

What works for Zoho amid cutbacks in tech spends?

Vembu spoke on the cutbacks in tech spends globally and Zoho's growth and product launches. 

He told Business Today, "Due to the debt and demographics across major economies, I have a cautious outlook. But if you see our product, it is the most affordable of all in same categories because we invest our money in R&D to improve our product instead of putting it in Marketing and Sales. Look at Slack under Salesforce. They spend a lot on marketing but not on R&D. We also work closely with the customers to hand hold them and help them out when needed. That way our product has an edge, and a lower CAC (Customer Acquisition Cost) too since we don't have a lot of marketing spends."

Israel- Palestine Conflict and Zoho

The CEO also spoke of the growing conflict between Israel and Palestine and its likely impact on his business. He said, "Everything is very uncertain, anything can happen witnessing the latest developments. And we are keeping a close eye since Middle East is our second fastest growing markets, just behind India."

Zoho's AI investments

Vembu also highlighted Zoho's AI plans. "NVIDIA holds a monopoly over the whole GPU supply, AMD is trying but they are not there yet. We are also investing in GPUs but if you see, the wait time is over 6 months, the investment is huge, and regulations are shaping up," he noted.

The CEO of the tech company has been quite vocal about need of regulations in AI development and deployment, to counter misuse as well as to protect low skilled labour from losing their livelihood. In April, he co-wrote a letter calling for halting AI development for six months to arrive at a solution for these problems.

At Zoholics, Vembu noted the drop in usage of ChatGPT, OpenAI's chatbot. "The novelty has worn off. The use time has dropped significantly as compared to say three or four months. You are now able to see the flaws, like hallucinations, etc," he noted.

Zoho's 2022 financials

The company's revenue from operations climbed 28.3 per cent to Rs 6,711 crore in FY22 from Rs 5,230 crore in FY21, according to its consolidated annual financial statements with the Registrar of Companies (RoC). The company's profit crossed Rs 2,749 crore, up 43.3 per cent.