Taking on Google!

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It's the classic David versus Goliath battle being played out in the 21st century. And it's no surprise that this battle is being fought on the Web. We are talking of the great race between Web behemoth Google and Zoho, the Chennai-based underdog, to launch a suite of online office applications.

However, Sridhar Vembu, CEO of AdventNet, the company behind Zoho services, doesn't see it as an all-out battle. ``That would imply that there can be only one winner, which I don't agree with. Business is not like sports in that respect. It is perfectly possible to have a profitable, growing business without `winning' the market in the sense of being number one,'' he told Business Line in an exclusive interview.

Having said that, he adds that Zoho is working hard to offer "a really good suite of apps. I am confident we can keep this pace up, thanks to our outstanding engineering team in Chennai."

Blogs and Web sites covering Web 2.0 developments have been tracking the fight for a year now.

While Google has been going about its mission with a mix of buyouts and internally developed products, Zoho has a team of several hundred engineers focused on churning out one product after the other, sometimes within a span of a few weeks!

That team has built what is widely accepted as a set of world-class products. Vembu is a man who firmly believes that India has what it takes to build world-beating products, despite being most famous for concentrating on services.

"All remaining barriers are mostly in our mind. The reason most Indian companies concentrate on services is because of a certain aversion to risk, to trying out new things - an attitude of excessive caution."

That caution is understandable in anyone who grew up in pre-liberalisation India, he adds. "The good news is that a new generation is coming," without any such assumptions.

Zoho is part of a new wind blowing across the tech landscape - it's called software-as-a-service (SaaS). "I believe Web services represent the future of software. There are huge productivity benefits to individuals and businesses in SaaS, which is why it will take off."

Won't companies and individuals be worried about privacy and safety issues when it comes to allowing all their sensitive data to be in the hands of a third party provider? "On the contrary, there is nothing more unsafe than critical corporate data being stored in laptops. While there is no such thing as perfect safety, your data is much safer in a professionally managed data centre than in a relatively poorly managed end-user PC or laptop."

The Indian presence in this segment is relatively thin, which Vembu attributes to a conservative mindset among companies and, more importantly, low broadband penetration. "But both of these factors will change over the next few years."

On how a company very focused on the telecom market forayed into Web services, Vembu says: "When the telecom bubble burst, the company found itself with a lot of talented engineers. That's when Zoho was born. We decided to diversify out of telecom and it was obvious that Web-based applications was a key area of growth."

It also helped that Zoho has people on the ground in the US to evangelise the work the company was doing in the field. It has been a sponsor of TechCrunch, a blog covering Web 2.0 that is read by close to half a million people every day.

"Given that the early market for all of these Web services is primarily in the US, having a good presence there is extremely valuable. In today's connected world, it would be possible to do all this from India, just a little bit harder. Our TechCrunch sponsorship has certainly paid off in terms of global visibility, particularly among the technology early adopter crowd."

Zoho has gone beyond online word processing and spreadsheets to a completely Web-based CRM solution. Is ERP next on the cards? "ERP is not the same kind of technology beast as CRM, which is the reason has never stepped out of CRM. ERP is extremely industry-specific - it's practically a different product for each industry vertical."

AdventNet has also sponsored an open source CRM project called vtiger. Vembu believes that the key impact of open source is to level the playing field in software, enabling many new players to emerge.

"The Web as we know it today simply wouldn't exist without open source. Companies like Yahoo or Google are heavy users of open source as well as important contributors. From an enterprise perspective, the impact of open source is to lower IT costs. This cannot be overstated, particularly in the Indian context."

He goes on to add that AdventNet itself was a heavy user of Linux 10 years ago, much before Linux went mainstream.

In the decade or so of existence, AdventNet has not taken a cent in venture capital. Was this a conscious decision? "No, not at all. Actually, the venture capital environment in the mid-90s was vastly different from what you see today, even in Silicon Valley. It just wasn't so easy for a bunch of engineers with no business experience to get venture capital."

Which is why Vembu and company decided to make the pragmatic choice of building a company without venture capital. "That made us focus on turning a profit quickly, and once we became profitable, there just wasn't much motivation or urgency to seek venture capital."

Does he have anything against taking VC money? "I don't have anything philosophical or religious against it. It's just a strong personal preference for the operating freedom that comes from not having to answer to financial-minded investors, while being subject to the discipline of living within our own means."

He adds that in this issue there is no right or wrong. "Each company has to make its own decision, consistent with its goals and culture. I am an engineer at heart, and our company culture reflects that."

With independence being at the core of its culture, Zoho is unlikely to be gobbled up by an MNC with deep pockets. "We have a track record of patient engineering execution. Based on that history, I would say we will be around as an independent player, though in business one learns to never say never."

Does the engineer in him cheer the "less is more" philosophy being practised by startups that believe software should not do too much? "Everything should be as simple as possible, but no simpler. For 50 years, all you could do with a phone is to make a call, but now people expect a digital camera, music player and more in their phones.

"The designer faces the challenging task of integrating all these features in one device, of balancing the need for features against the need to keep the product simple. It is a question of striking the right balance, and that balance itself keeps evolving over time, as customer needs and fashions change."

Vembu co-founded what eventually became AdventNet in 1996, and served in a variety of roles in technology, marketing and sales before becoming CEO in 2000.

He obtained a B.Tech in Electrical Engineering from IIT-Madras in 1989 and a Ph.D in Electrical Engineering from Princeton University in 1994.

He worked in Qualcomm as a wireless systems engineer from 1994-96, but moved to software due to his passion for doing something in India.

AdventNet has a broad portfolio of products and Web services spanning a spectrum of verticals such as network and systems management, collaboration, CRM and office productivity, database search and migration and software test automation.

(This article was published in the Business Line print edition dated May 7, 2007)
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