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Zoho is partnering with MSME clusters to create digital literacy: Praval Singh, VP, Zoho Corp

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In an exclusive interview with  Express Computer,  Praval Singh, Vice President, Zoho Corp speaks about Zoho’s journey, the company’s functioning, its India specific initiatives, and an insight into the future of product and software market in the country

Can you tell us about Zoho’s journey of being a bootstrapped, privately held, and profitable company for the last 26 years?

The motivation of our inception dates back to 1996 when we asked ourselves: Why does India produce so much talent that goes abroad but does not build a homegrown technology powerhouse?

We wanted to build a product company, even though service companies were the norm at the time. We started with network management solutions, and diversified over the years into enterprise IT management (under brand ManageEngine) and cloud-business apps (under Zoho.com). Last year, we launched two other brands: Qntrl and TrainerCentral. Since the beginning, we have felt strongly about staying bootstrapped and debt-free. While it seems like a tough decision in the age where hyper-scale and valuations have the center stage, it came to us naturally. This is owing to our pillars: long-term R&D, focus on engineering, owning the entire technology stack, staying privacy focused, and being people first.

What is the main business division in Zoho.com? How has it been functioning?

Zoho.com is our B2B cloud services division. We do not have a main division, but rather offer more than 50 applications in nearly every major business category, including sales, marketing, customer support, accounting, HR management, low-code platform, and developer solutions.

All our products function on the same technology stack, that we have built from scratch over the past 25 years. We offer our products as stand-alone offerings, as suites or platforms targeted at specific functions, and under Zoho One—a unified platform that includes 45+ products and functions as the operating system for business. Apart from 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 platform), and Zoho Books (accounting software).

Offering our products as unified platforms has helped us reduce customer churn rate significantly, as it offers greater value to our customers. The full-stack approach also allows us to provide better privacy and security as we are not dependent on third-parties.

Another key aspect of Zoho is that we do not follow an ad-based revenue model, even for our free products. Our customers’ data is their own. We do not sell it.

What are the initiatives that have been taken by Zoho keeping focused in India?

While Zoho corp is running many initiatives across the country, I would like to highlight some of them:

Zoho School of Learning: The journey of ZSL 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 are given a stipend during their tenure. ZSL graduates make for 10% of Zoho’s total workforce. ZSL now has three arms—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 on fostering a deep-tech ecosystem in the country. So far, we have made seven investments towards this cause. The recent investments are Genrobotics, Voxelgrids, Ultraviolette, and the Kongu belt. However, we are not exit or liquidity focused but want to develop the technical know-how in each of those sectors. The founders of these companies share a similar philosophy to ours.
  • Nurturing and tapping the untapped talent: People are the heart of any organisation and they keep the values and the culture intact. We were also conscious that top talent has to move out of their native places to urban areas in the hunt for opportunities, leading to what we call ‘topsoil erosion’ of talent in those regions. Keeping this philosophy in mind, we deployed two strategies: transnational localism for our global expansion, and the second being hiring and expanding in non-urban and rural areas.
  • Zoho for Startups: Through this programme, Zoho partners with various incubators, accelerators and state departments to support early-stage startups by providing free credits that can be used for buying any of Zoho’s 50+ products, and conducting workshops and training sessions to help them leverage technology to catapult their growth.
  • Zoho Empower: Through Zoho Empower initiative, Zoho has been partnering with various MSME clusters in order to create digital literacy, help MSMEs overcome resistance to technology and digitally transform. It also aims to provide skill development and technology counseling, and creating a marketplace for them.

Please tell us about the current technology trends in terms of privacy, low-code, cybersecurity, SaaS and so on?

  • Increasing demand for unified solutions: Businesses are now reaching a stage where it is getting cumbersome to use multiple apps that create silos. They are looking out for contextual and collaborative unified platforms. Aligned with this market need, we have seen momentum in our suites like Zoho One, Zoho Workplace, and our CX and EX platforms.
  • Rise of low-code platforms: In recent years, we have seen an uptick in  low code and no code (LCNC) offerings. India’s LCNC market crossed US$ 400 million in 2021 and by 2025, the low code and no code landscape is estimated to touch 4.2 billion. Currently, the market majorly has two kinds of platforms, ones that are easy to use but cannot build complex solutions and others that can help build complex applications but are difficult to use. This is where Zoho Creator—company’s flagship low-code platform—helps bridge the gap. Intending to empower everyone to build powerful solutions easily, the platform offers analytics (industry-first) capabilities as well. At the same time, it addresses shadow IT by enabling IT teams to build guardrails within enterprises. To date, Creator has helped build seven million applications.
  • Need for privacy: In an era where cyberspace is ever-expanding, the threat to users’ privacy only increases. Given the rising need for privacy-conscious users, businesses need to step up and meet their needs. As a privacy-conscious company, we removed all third-party trackers from our website. Also, we don’t use or sell our customer data. We also never show any ads in our products, even in our free offerings. As more and more customers become privacy-conscious, businesses, particularly those dependent on ad-revenues, will be forced to adapt.
  • All apps will be collaboration apps: The pandemic showed how critical communication and collaboration is to every business function. Vendors that did not offer these capabilities are rushing to fill the gap through acquisitions. We are also witnessing that bigger players are increasing prices or removing free versions of their products in this space. We have been investing heavily in advancing our audio / video capabilities. We already had a strong enterprise collaboration offering (Zoho Workplace), which is doing exceedingly well thanks to soaring demand and migrations from other established players.

What is the future of the product and software market in India?

A recent report from NASSCOM indicates that by 2025 India’s software product industry is expected to post US$ 30 billion in yearly revenue.

When we started out, there were only a handful of players in the market. However, today, owing to multiple reasons, including increasing demand for digital acceleration, scale, the evolution of the requirements from the user etc, there is an influx of players in the landscape—big and small. While the scope of the industry is monolithic, given the number of players in the space in the long run, Darwin’s theory of ‘Survival of the Fittest’ applies here. Here, fittest would indicate enterprises that can provide a holistic and unified experience to the user and have a strong R&D core. Two primary trends arising owing to the dynamics in the industry:

  • Consolidation of SaaS: In recent years, we have seen many single-product acquisitions from major players in the market to diversify their portfolios coupled with inflated valuations and IPOs. However, the cost of efficiency is an implication faced by the users in this route. Historically, we haven’t raised prices except for correction for inflation to avoid passing on the cost 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 these markets have gained momentum and we have seen that exceptional CX is directly related to the company’s EX. Also, technology can aid the latter way beyond onboarding, training, and internal communication. When employees are empowered with the right tools, technology, environment and culture, they drive great customer experience.

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