New Delhi: Electronics and information technology minister Ashwani Vaishnaw shared a video on X Monday, saying he is switching to Zoho Office Suite. This single post has given the Chennai-based company its biggest lift to be at the forefront of PM Narendra Modi’s swadeshi push.
“It is phenomenal. I am so impressed with the capabilities of Zoho writer, Zoho sheets, and Zoho presentation. This is really good. I think I will be shifting to Zoho at the earliest,” he said.
This top-level ministerial boost for Zoho came two days after PM Modi pushed for buying swadeshi (India-made products) in his address Sunday. The Modi government is promoting homegrown products and services to make the country self-reliant. But this is not the first time Zoho has made headlines.
According to a report by Hindustan Times in 2023, Zoho was shortlisted by the Modi government to manage email services and a host of other internet-based office products. The newspaper had earlier reported that the government had planned to involve a third party to take some of the work from National Informatics Centre (NIC).
Zoho was founded in 1996 by Tony Thomas, Sridhar Vembu and his siblings. At the time of its launch around 29 years ago, Zoho was called AdventNet Inc. It was headquartered in Silicon Valley, US. But most of the development activities were carried out from Chennai. Thomas, a good friend and a senior to Vembu, became the CEO of the company, while Vembu stayed in the US, marketing their products as America was their biggest target market.
Soon after the tweet, X users jumped into comparing the tech giant with Google and Microsoft Office products. One Janmejay Singh applauded Zoho. “Zoho is the only platform offering such a diverse set of solutions with a freemium pricing model.”
Born in the US
The company caters both to Indian and international clients, including Amazon, IIFL Finance, Zomato, Spice Jet, Max Life, Dell, Ikea, Toyota, Bosch, and FedEx. Zoho recorded a consolidated revenue of Rs 8,703 crore in 2023 — 30 per cent up from the previous financial year.
One of the first areas Zoho explored was network service providers for businesses. It introduced WebNMS, providing remote solutions to companies. That was just the beginning for Zoho to make a global name for itself. In 2005, the company launched its first software as a service (SaaS)-based product, Zoho Writer, an online word processing application, and in the following year, Zoho launched one of its most successful products, Zoho CRM(Customer Relationship Management).
Over the next few years, Zoho witnessed a major growth in SaaS applications for users. This was when Vembu decided to rename his company as Zoho Corporation. In 2009, the company shifted its headquarters to Chennai in Tamil Nadu. But Vembu wanted to do more.
In his book, The Earnicorns, author Dhruv Nath wrote that Vembu was perturbed by the poverty and unemployment in India and wanted to do something. He decided to build a software development centre for Zoho in a small village of Tamil Nadu. The company bought four acres of land in Mathalamparai, in Tenkasi district. By 2011, the office was up and running. Now, even though the company is headquartered in Chennai, its major operations take place from the tiny village of Mathalamparai.
Zoho’s presence in rural India
Vembu’s idea behind setting up a unit in Mathalamparai was to give a chance to villagers, boost rural economy, and decentralise operations. One of the popular Zoho products, Zoho Desk, was created out of the unit in this village. Vembu kept working on the idea of boosting rural economy. Currently, he has set up units in villages of Andhra Pradesh and Telangana.
Vembu himself operates from the village. In 2019, he packed his bags and shifted to the village. Nath has written in his book that the founder starts his day at 4 am and after attending meetings with global clients, heads out to the fields adjoining his office where he practices farming.
“It is easy to run a software company from Silicon Valley, but it is impressive to see how a world-class software company is running from a village in Tamil Nadu,” said Nath.
Vembu’s push for rural development came when he introduced Zoho Schools. The company started taking students from every social and economic background to train them. The two-year programme focussed on providing theoretical and practical knowledge to students keen on learning software development. A believer in skills over formal education, Vembu brought in people from the village and nearby areas.
After completing their school education, most of these students were absorbed into Zoho. Today, around 15 per cent of Zoho’s workforce comes from these schools.
What makes Zoho unique
The Zoho Schools project made the company stand out among all software companies in the country. It not only helped it reduce workforce cost, but also ensured a healthy profit margin.
“Zoho became probably the only one in India that provided software products. All of their work is product based. Once you develop the product, the scalability is immense,” said Nath.
Vembu, unlike other SaaS companies, started with small clients. His company provided cheaper and integrated products compared to other giants in the market. Gradually, Zoho’s popularity grew, and it garnered the attention of big businesses.
All these made Zoho stand out in the market. Its village distribution system focuses on rural development and value of customer privacy. Since the company saw the doors of success, a lot of venture capitalists tried to invest, but Vembu was against it. The company has received investments only from friends and family. In fact, Radha Vembu, who is Sridhar Vembu’s sister, is the largest shareholder in the company.
Nath said that the reason the company has remained a private affair is because Vembu prioritises customer privacy. Zoho Corporation is also developing a data centre in Nagpur, Maharashtra.
Problems with the platform
A former sales manager for a healthcare IT company in Gurugram, who has used Zoho’s CRM, wasn’t impressed with the platform’s interface.
ZohoCRM’s UI/UX is not user-friendly when compared to its competitors. “The application is heavily dependent on Zoho engineers on any kind of customisation that the users might require. It also puts limitations in integrating non-Zoho applications.”
The person quoted above, who used Zoho for running day-to-day sales and marketing operations, said that Zoho Office Suite is similar to that of Microsoft Office Suite and Google Workspace.
Some users have also given their feedback on the software on Reddit, raising grievances against the company. An anonymous complaint by a user detailed how their data was deleted from ZohoBooks (an online accounting software) because their emails were inactive for a month.
However, Zoho’s products were praised by the healthcare professional quoted above.
“What makes Zoho better is all of their products and services integrated with each other,” said the user.
(Edited by Prashant)
India should have transitioned to Zoho products long time back. We were too satisfied with using other products when a compelling local product is available. This will only spur more high quality home grown products