An inveterate nationalist, Sridhar Vembu, Founder and CEO of Zoho Corp, is known for his penchant for everything grounded – quite literally. His office space is not a sprawling high-rise but a modest, eco-friendly thatched hut. Building a company that has been profitable from day one and one known for its inclusive culture and policy to hire and train talent from underprivileged backgrounds and skilling them, Vembu ensures the culture of Zoho remains intact.
In a crisp conversation with Outlook Business, Vembu and Shailesh Davey, Co-Founder and Vice President of Engineering of Zoho Corp, talk about their plans for Zoho University, ManageEngine -- the enterprise IT management division of Zoho, and the company's open-door policy. Edited Excerpts:
Zoho has been a profitable company from day one. How have you managed and worked towards that?
When we started building products and getting customers, we invested that money into R&D and started building better products, so we never needed to go for any funding. We were frugal in our approach and built a profitable organisation with the products being our backbone.
What's your advice to new-age startups who often don't plan for profits and are dependent on several rounds of funding from investors?
My advice to today's startups, particularly in the current scenario when VCs have become increasingly restrained in investing, is to take it slow and steady and keep their expansion and expense in check. They must focus on building high-quality products rather than raising the next round of investment. Investors are becoming highly conscious, so companies should not assume additional rounds of funds.
Zoho University has been the company's internal training programme through which scores of young individuals have joined the company. Any plans to scale it up further into a full-fledged educational platform – particularly to bridge the industry-academia gap?
We are expanding the strength of the Zoho School of Learning by hiring more faculty and taking in more students. But we will not change the model itself as it is not focused on merely handing out degrees but on providing skills to be employable. It is also an antidote to the extreme obsession with degrees and formal credentials developed over the years.
We want to stand for real skills, employment, employability, and debt-free education. We feel that young students should not be forced to take on debt to obtain mastery. We will expand it in more domains, including hardware or mechanical engineering, mechatronics, and other software courses.
Zoho's rural centres work towards tapping rural talent and developing a progressive ecosystem in the journey. Where do you plan to open the next set of such centres considering these can be game-changers in North and North-East India?
Currently, we have five hubs in Madurai, Coimbatore, Thanjavur, Tirunelveli and Tenkasi, and are scouting for one location in the North. We may have something to show in the next few months. But we would like to start cautiously with one and expand as we gain footing.
You are a nationalist who likes to go back to his roots. Do you plan to popularise and create a community of entrepreneurs who can help consolidate what you are doing and take it forward on a bigger scale?
Many people approach me on social media and say that they have moved back to their hometowns in rural areas, particularly technically-talented people. These entrepreneurs told me they are starting in their hometowns or villages. I am happy to see that.
There is also a broad recognition that we need a lot more self-reliance in technology, which means we have to invest heavily in R&D to maintain our sovereignty and independence. We have to have technological autonomy and self-reliance. That is clear to many people now, and many people are inspired to do this. The bubble complicated this matter because it is difficult to obtain or retain talent. Now that the bubble is winding down, many of these traits will accelerate.
How has been the journey so far for ManageEngine?
Shailesh: From ManageEngine's perspective, there is more focus on AI and ML. We have been working on it for the last five years and have engines that are home built and address various aspects of AI and ML. Concerning monitoring, it could be anomaly detection or root cause analysis, malware detection, phishing detection, etc. Many AI and ML applications are possible in infrastructure monitoring, service management, and IT Security. We operate and manage our own data centres worldwide; we have around 12 of them.
Three are coming up this year, three more next year and all these are operated using our tools. It gives us a lot more experience, which again improves our tools. Now that we have close to 50 different products, we focus a lot more on end-user solutions where we integrate them and give benefits out-of-the-box to end users.
It preceded Zoho. A lot of technology in Zoho got built during ManageEngine days and were repurposed into Zoho once it went into the cloud. From a technology and people perspective, many things from ManageEngine went into Zoho, but the same is happening vice-versa. Because Zoho went into the cloud first, many newer technologies were built on the same platform, to put it into the cloud. Similarly, IT security becomes paramount in the cloud; all those benefits flow back into ManageEngine.
ManageEngine is said to be Zoho's backbone. Can you elaborate on that, and the way forward?
Shailesh: There will be a lot more integration amongst the existing solutions. Second is a big focus on security as IT security is becoming critical, especially in a hybrid work setup. In such a scenario, if we do not do it well, the whole IT infrastructure can become challenging to manage.
Over the years, you have created a distinct culture in Zoho. How do you plan to expose the entire industry to that kind of culture for it to evolve?
We are hiring a lot more people. We are training them and providing them exposure to how we operate. That naturally creates a lot of talent that is helpful for the whole ecosystem, not just us, as these ideas then slowly percolate around. So, the idea is to create more jobs, which is the pressing need of our country right now.
When you created Zoho, what kind of company did you want to build apart from making world-class products?
When we started, there was a focus on the long haul. I knew early on that we were not here to make quick money; the idea was to build a durable company. I always looked up to Japanese companies, always mentioning Honda as an inspiration. Even after about 80 years, they still make good cars. That is the kind of company we want to be known for 50 to 75 years. So, Zoho's completion of 25 years is a good milestone, but we have another 25 years to go.
How difficult has onboarding and retaining talent been for you?
Hiring and retaining talent was always difficult – for everyone. Even if you go back to the 90s, the focus was on IT services. Those were the only companies that were considered actual software companies. The product company notion was an alien concept, at least in India.
Ours was a small company without any VC backing, and we weren't famous for anything. So, it has been tough since the early days for us. Companies bigger than us in IT services used to take most of the talent in IT services. That created a DNA of developing our own talent. That induced the created your talent ethos. That is what is keeping us going. It has continued during the recent bubble, and everyone has had trouble hiring since the talent shortage is real. But our approach to creating and nurturing the talent has helped.
What kind of HR policies do you stand by as far as employees are concerned?
We do not look for fancy credentials apart from talent, skill, potential and passion. That is a critical value of our HR. Second is, we give a lot of importance to keeping employees happy. Our HR tells managers that if their teammates are not happy, they will not do well themselves. We have an open-door culture; any engineer can approach me or anyone else from the top management for any problem. Even though we now have over 10,000 employees, we try to stick to this culture.
Periodically, we conduct town hall sessions where all employees participate, and we allow them to ask a lot of anonymous questions. These things keep the two-way dialogue going about employees' latest concerns, what are we doing well, what are we not doing well, etc.
Zoho is a true-blue Indian company which is making products for the world. What is the one thing you would like your Indian employees to imbibe from their western counterparts?
We have to create world-class products and are committed to that. And, it's not just in software. It can be electric cars or household products; the focus has to be on building products that stand up against the best in the world. Our entrepreneurs, our engineers and our employees have to commit to that. Only then can you hope to be a prosperous nation.
Any future products you would like to mention, specifically to metaverse…
No, we don't have plans for the metaverse because I often don't even understand what it stands for. You can brand this entire meeting also as metaverse (chuckles).
As ManageEngine, the enterprise IT management division of Zoho Corporation turned 20, it announced its plans to grow its Indian workforce by 1,000 employees in 2022. Since 2002, the company has served over 2,80,000 organisations in more than 190 countries.