In an exclusive interview with Express Computer, Praval Singh, VP of Zoho Corp, talks about Zoho’s journey, how the company works, its India-specific initiatives and a glimpse into the future of the market products and software in the country.
Can you tell us about Zoho’s journey as a seeded, private, and profitable company over the past 26 years?
The motivation for our creation dates back to 1996 when we asked ourselves: why is India producing so many talents who go abroad but not building a local technological powerhouse?
We wanted to build a product business, even though service businesses were the norm at the time. We started with network management solutions and branched out over the years into enterprise IT management (under the ManageEngine brand) and cloud-to-business applications (under Zoho.com). Last year we launched two more brands: Qntrl and TrainerCentral. From the beginning, we have been very keen on staying primed and debt-free. While this seems like a tough call in an era where hyperscale and valuations take center stage, it came naturally to us. This is due to our pillars: long-term R&D, focus on engineering, owning the entire technology stack, privacy protection and putting people first.
What is Zoho.com’s main business division? How did it work?
Zoho.com is our B2B cloud services division. We don’t have a main division, but rather offer more than 50 applications in almost every major business category, including sales, marketing, customer support, accounting, human resources management, platform. low-code form and development solutions.
All of our products run on the same technology stack, which we’ve built from the ground up over the past 25 years. We offer our products as standalone offerings, suites, or platforms targeted to specific functions, and under Zoho One, a unified platform that includes more than 45 products and operates as an operating system for businesses. . Besides Zoho One, our other popular offerings are: Zoho Workplace (enterprise collaboration and productivity suite), People Plus (HRMS suite), Zoho CRM Plus (customer experience platform), Zoho Creator low-code) and Zoho Books (accounting software).
Offering our products as unified platforms has helped us significantly reduce customer churn because it provides greater value to our customers. The full-stack approach also allows us to offer better privacy and security because we are not dependent on third parties.
Another key aspect of Zoho is that we don’t follow an ad-based revenue model, even for our free products. Our customers’ data is theirs. We don’t sell it.
What initiatives is Zoho taking to stay focused on India?
Although Zoho Corp runs many initiatives across the country, I would like to highlight some of them:
Zoho Learning School: ZSL’s journey began in 2005 when it was established as a meaningful alternative to conventional colleges to help bridge the growing gap between industry expectations and graduate talent. Under this initiative, students who have completed Class XII or Diploma (10+3) are trained for 24 months, and those who complete the course join us as employees. There is no fee for ZSL, instead graduates receive a stipend during their tenure. ZSL graduates represent 10% of Zoho’s total workforce. ZSL now has three branches – School of Technology, School of Business and School of Design, and is operational in two branches: Chennai and Tenkasi.
- Investment in deep-tech: We have been keen to foster a high-tech ecosystem in the country. So far, we have made seven investments for this cause. Recent investments are Genrobotics, Voxelgrids, Ultraviolet and the Kongu Belt. However, we are not focused on exit or liquidity, but want to develop the technical know-how in each of these areas. The founders of these companies share a philosophy similar to ours.
- Nurture and harness untapped talent: People are at the heart of any organization and they keep values and culture intact. We were also aware that top talent must leave their home locations for urban areas in search of opportunities, leading to what we call “topsoil erosion” of talent in these regions. With this philosophy in mind, we deployed two strategies: transnational localism for our global expansion, and the second being hiring and expansion into non-urban and rural areas.
- Zoho for startups: Through this program, Zoho partners with various incubators, accelerators, and state departments to support early-stage startups by providing free credits that can be used to purchase any of Zoho’s 50+ products, and hosting workshops and training sessions to help them leverage technology to catapult their growth.
- Zoho Empower: Through the Zoho Empower initiative, Zoho has partnered with various MSME clusters to create digital literacy, help MSMEs overcome resistance to technology and become digitally transformed. It also aims to provide advice on skills development and technology, and create a market for them.
Tell us about current technology trends in terms of privacy, low code, cybersecurity, SaaS, etc. ?
- Growing demand for unified solutions: Businesses are now reaching a stage where it becomes tedious to use multiple applications that create silos. They are looking for contextual and collaborative unified platforms. In line with this market need, we have seen momentum in our suites such as Zoho One, Zoho Workplace, and our CX and EX platforms.
- Rise of low-code platforms: In recent years, we have seen an increase in low code and no code (LCNC) offers. India’s LCNC market surpassed US$400 million in 2021 and by 2025, the low-code and no-code landscape is expected to touch 4.2 billion. Currently, the market mainly has two types of platforms, those which are easy to use but cannot create complex solutions and others which can help to create complex applications but are difficult to use. This is where Zoho Creator, the company’s flagship low-code platform, helps fill the gap. In an effort to make it easy for anyone to build powerful solutions, the platform also offers analytics capabilities (an industry first). At the same time, it addresses shadow IT by enabling IT teams to create safeguards within companies. To date, Creator has helped create seven million apps.
- Need for privacy: In an age of ever-expanding cyberspace, the threat to user privacy only increases. Given the growing need for privacy-conscious users, companies need to step up and meet their needs. As a privacy conscious company, we have removed all third party trackers from our website. Additionally, we do not use or sell our customer data. We also never show ads in our products, even in our free offers. As more and more customers become privacy-conscious, businesses, especially those dependent on advertising revenue, will be forced to adapt.
- All apps will be collaboration apps: The pandemic has shown how critical communication and collaboration are to every business function. Vendors that didn’t offer these capabilities are rushing to fill the void through acquisitions. We’re also seeing big players raise prices or remove free versions of their products in this space. We have invested heavily in improving our audio/video capabilities. We already had a strong enterprise collaboration offering (Zoho Workplace), which is doing extremely well thanks to growing demand and migrations from other established players.
What is the future of the product and software market in India?
A recent report by NASSCOM indicates that by 2025, the Indian software products industry is expected to post $30 billion in annual revenue.
When we started, there were only a handful of players in the market. However, today, for multiple reasons including growing demand for digital acceleration, scale, changing user requirements, etc., there is an influx of players into the landscape, large and small. While the scope of the industry is monolithic, given the number of players in the long-term space, Darwin’s theory of “survival of the fittest” applies here. Here, fittest would indicate companies that can deliver a holistic, unified user experience and have a strong R&D core. Two main trends stemming from the dynamics of the industry:
- Consolidation of SaaS: In recent years, we have seen many unique product acquisitions from major market players to diversify their portfolios, coupled with inflated valuations and IPOs. However, the cost of efficiency is an implication faced by users going this route. Historically, we have not raised prices except to correct for inflation to avoid passing the cost on to customers. Therefore, we will see consolidation in this space.
- The confluence of CX and EX: There is a paradigm shift in how customer experience (CX) and employee experience (EX) are viewed. Both of these markets have grown in size and we have seen that exceptional CX is directly linked to the company’s EX. Additionally, technology can help this latter path beyond onboarding, training, and internal communication. When employees have the right tools, technology, environment, and culture, they drive an exceptional customer experience.