Tenkasi Days: Sridhar Vembu’s global village

Chitra Narayanan | Updated on January 31, 2021

The soul of India lives in its villages declared Mahatma Gandhi nearly a century ago. But it was the cities that moved the wheels of commerce and where the talent and spotlight shifted. Until Sridhar Vembu, the charismatic founder of Zoho Corp, took it upon himself to prove that the village could be a coding hub of creativity and commerce.

Vembu, recently awarded the Padma Shri award, argues that it was a decision based on first principles to move to a rural outpost near Tenkasi in southern Tamil Nadu nearly a decade ago, and no quixotic ideals. Cities were getting crowded, polluted, facing water shortage and things needed to change. But it’s taken a pandemic during which work from anywhere became an accepted notion to prove how far-sighted was his premise.

Vembu may have caught the world’s attention with his unique approach to location, as well as talent (skilling and empowering local rural youth, and challenging them to create world class software) but equally the products tumbling out of the software chest of Zoho Corp have created buzz too. “The core promise of Zoho is to serve the underserved,” he says. This reflects in both its talent philosophy and product philosophy, where the approach is to provide an alternative.

“People are always looking for alternatives - for three reasons. One they are curious and want to see what is being offered. Second is privacy. Third – they may want better products. And we do have better products,” he asserts.

Gone are the days when Zoho was mainly a CRM (customer relationship management) player pitching itself against Salesforce. Today, it is in the full productivity /collaboration suite where Microsoft and Google play with its Zoho Mail, Zoho Cliq (the Slack equivalent), Zoho Meeting (against MS Teams and Google Meeting) and so on. In December, taking everyone by surprise, it even unveiled a local alternative to Whatsapp with its chat offering Arattai (which means chat in Tamil). Vembu says Zoho will be ready to formally launch the app in the next few weeks and privacy is at the centre of its promise.

As for the expansion of its product offerings to encompass the full workflow range, he says, Zoho now calls itself the Operating System for Business. “We think this will be the big theme in the next five years. We anticipated that the front office, the back office, the collaborative software all have to be one integrated suite. And that’s what we call Zoho One,” he explains.

“Our systematic approach is to fill all the needs of an entire enterprise. We have been working diligently towards that. It’s a mammoth project. Very few companies can do that. But we have managed to pull off quite a bit. Now we are working on giving more breadth to these tools,” he says.

Vembu says Zoho One is doing quite well though analyst Sanchit Vir Gogia, founder and CEO of Greyhound Research, has some concerns. “While their Zoho One approach is ideally fit for an SMB audience that lacks the knowledge, budget and expertise to run enterprise-grade software products, it doesn’t always fit well for enterprise customers that are looking for domain experts rather than one provider for all their app needs,” he says.

“Also, one must not forget the force and footprint of the large software providers that come with both the teeth and the muscle to cater to a large base of client types,” adds Gogia.

But Vembu says that even if there are small shifts in market share from Google and MS, it is big growth for Zoho, which already has over 60 million users for its products.

Technology analyst Kashyap Kompella, CEO of RPA2AI, feels that in B2B productivity tools, there is room for Google, Microsoft, Zoho and many other specialist players. There can be multiple winners – each catering to different customer segments.

And as Gogia points out one of the key reasons why Zoho has been immensely successful is its ability to respond to market condition and competition rather quickly.

Indeed, though Vembu stresses that one has to be patient and give creators’ time – two years, four years even – to make products, Zoho showed amazing agility and versatility during the pandemic to meet the changed landscape of demand. Either rejigging and expanding the features of existing products or creating new ones. For instance, it really pushed Zoho Backstage (a virtual events tool) and Zoho Show Time (an online training platform) during the pandemic.

The work process at Zoho is best explained by Rajendran Dandapani, Director of Technology, Zoho, who in an email interview with this writer during the peak of the pandemic, had said, “Zoho doesn’t chase artificially imposed project-deadlines and try to “burn the midnight candle on both ends”! The long marathon, with ample pauses for introspection and market study and furious sprints of frenetic activity - those are what exemplify the day to day work style at Zoho.”

Dandapani, an unusual man, who dropped out of IIT, and has free schooled his son, also leads the Zoho School of Learning. He exemplifies the unusual talent at the company.

Zoho’s agility during the pandemic came from studying opportunities and being quick to recognise that the tools that empowered contact-less connection were seeing growth and demand. Be it employer to employee, employee to applicant, employee to customer, employee to partner, there were many combinations that Zoho to cater to.

Currently, 90 per cent of Zoho’s revenues come from global markets, with only 10 per cent domestic. “Over time, the balance will shift, but we will still remain a global company,” says Vembu. Interestingly, India which was its second largest market in 2018 actually slipped to becoming its third largest market in 2019. “We are not looking at which is our largest market or second largest market as much our growth rate in each country and whether we are growing faster than the market. India, Middle East, Latin America are all growing very fast but developed markets are also important for us,” he says.

Right now, Vembu is reading a book on trade wars, which explains the current global conflict between India and China. “It also is related to our Atmanirbhar stance,” he says.

He is also reading How Asia Works, an economics book on success and failure in the world’s most dynamic region.

When he was 23, says the IIT Madras, Princeton University (he did his PhD there) alumnus, he had no clue he would become a businessman. “I would have said it was impossible.” But when Vembu finally decided to set up a venture, he says, he studied a range of companies - Japanese, Swiss, German, American, Taiwanese, et al. “I would describe Zoho as an influence of Japanese, Swiss, German in one direction, Silicon Valley in another direction with a strong grounding in Indian culture and philosophy,” he says.

Humility, contentment, staying grounded and close to one’s roots are the values at Zoho, says Vembu.

The last movie he watched was Bahubali, which he caught up with only recently. “Pretty late, no,” he says deprecatingly, adding, “I don’t get the time. If I get an hour off, I would rather go for long walks or swim in the local pond.”

Life in Tenkasi is no slow Malgudi days clearly, though Vembu says he hobnobs with the villagers, visits them and has tea in the local joint. One of the things planned in a new location is a community kitchen. “Sharing food creates a spiritual bond. It’s in our culture and everybody – employees, visitors, anyone visiting the doors- is offered food,” he says. As for himself, he regards food as fuel and only has simple south Indian vegetarian food.

Published on January 31, 2021

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