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Friday, March 31, 2023

Padma Shri Sridhar Vembu’s SaaS company Zoho clocks Rs.5230 cr turnover without raising any funds

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Sridhar Vembu, a Padma Shri, founded Zoho, a SaaS company, that has clocked a turnover of over Rs. 5000 crore. Zoho has managed to do without ever raising any funds.

Since it was founded. Zoho Corporation Private Limited started as a Network Management firm called AdventNet Inc. and eventually introduced ‘Zoho Remotely’ to facilitate ‘work from home’ in 2020. The Chennai-based SaaS company that was started in 1996 by Sridhar Vembu and Tony Thomas has touched almost every corner of software development and web-based business implements since it was founded.

On the occasion of India’s 72nd Republic Day, Sridhar Vembu was awarded the Padma Shri (2021). The company began operations in a modest apartment in Chennai’s outskirts. Initially known as ‘AdventNet,’ the only service offered by Zoho was network management. AdventNet was doing well, and it was gaining clients from the Bay Area and Silicon Valley.

However, when the dot-com boom burst in 2001, Zoho experienced a huge blow. It was when the number of clients was dropped from 150 to 3 in 2002 that Sridhar realized that the company needed to diversify its offerings in order to thrive.

As a result, AdventNet began to provide services other than network maintenance. Zoho now provides over 45 software solutions. In 2009, AdventNet was renamed Zoho Corporation, which now employs approximately 10,000 people.

Sridhar Vembu, the founder of Zoho, hails from a humble background. Sridhar was born in 1968 to a farmer in a little hamlet near Thanjavur, but he had huge goals! He aspired to study at an IIT and subsequently move to the United States, and he was able to realise his ambitions. Sridhar finally obtained a scholarship to Princeton University in New Jersey to pursue his Masters and Ph.D. in Electrical Engineering. In 1994, he began his work at Qualcomm. Two years later, in 1996, he launched his own company, AdventNet, with Tony Thomas, an IIT Madras alumnus and an old friend of Sridhar’s.

When Sridhar joined Tony as the Chief Evangelist to develop AdventNet, which eventually became known as Zoho since 2009, he had written a rough copy of networking software and needed help selling it.

Tony Thomas, a co-founder of Zoho, had worked at Bell Labs before creating AdventNet. Sridhar and Tony shared a passion for business and technology, which inspired them to create their big endeavour. To continue their firm, the two first chose to target Japanese electronics manufacturers, while Sridhar began to construct the vision of AdventNet, which will power it for generations. When the markets plummeted in 2001-2002, it was in 2001-2002!

The AdventNet customer base was cut from 150 to three, but they had enough money to survive and pivot.

ManageEngine, a leading IT operations suite for middle market and enterprise customers, was created in 2003 and quickly began to work with a list of firms, more than 60% of which were on the Fortune 500 list at the time. As a result, it rose to the top of its industry.

By that time, they had devised a successful formula, which included: Largest Product Suite at the Lowest Price; and Massive Engineering Base in India.

Sridhar quickly recognised the potential of Cloud and SaaS and set about developing an office suite in order to enter the consumer market. When Google Docs was released in 2005, he had to pivot yet again.

“We designed a CRM since it was easier to compete with Salesforce than Google,” Sridhar explained.

In 2007, Zoho had 600 engineers on staff, while Salesforce, had only 100, but now the company hires and trains hundreds of engineers straight out of high school and guides them through the schools that the firm has created for them.

The Zoho Schools of Learning instruct their students in the skills required for software development and pay them to attend their schools.

The students eventually develop into talented engineers, who are kept on by a combination of location and a large R&D budget. The Zoho Schools are based in Tamil Nadu, India. The schools allow their pupils to stay close to their families, most of whom are in Tamil Nadu’s rural districts.

The only reason for the successful business model is the high quality of the products. With its’freemium approach,’ Zoho allows for a free sign-up at first, followed by specific payments for premium upgrades. Zoho believes that roughly half of its income should be spent or reinvested in new projects.

Zoho’s overall spending is inherently lower because the company always lets the products speak for themselves and avoids overspending on marketing. It is stated that it spends about 5% of what its competitors do on marketing.

To say the least, Zoho’s branding has always been out of the ordinary. In fact, the corporation resorted to trolling Salesforce in 2013 by disrupting their worldwide user convention That branding aided the company’s pacing momentum, which is currently increasing at a rate of 30% each year.

Zoho has not raised any funds to yet, but it has invested in four firms and taken part in six investment rounds. Zoho’s operational sales increased by 22.3 percent, rising from Rs 4,274 crore ($570 Mn) in FY20 to Rs 5,230 crore ($697 Mn) in FY21. During FY21, the company’s total sales increased from Rs 4,385.9 crore to Rs 5,442.4 crore.

Zoho’s vision is to provide outstanding software that will solve all company difficulties. Rather than focusing on sales and marketing, the company’s investment is focused on product development and customer service.

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