Sridhar Vembu of Zoho: A Corporate Culture of Humility, Trust, Belief and Insane Ambition Is Key to Our Success

Forty-five million people use at least one of the 45 business apps Zoho offers in the cloud. And the vast majority of those fall under the heading small and midsize business users.  About 1,600 of these folks were in Austin, TX this week for the company’s big user conference Zoholics.

One of the things that stands out about the conference is just how connected and passionate Zoho’s customers are to the company. And they don’t just love the products and the pricing model. They also love the way the company treats them. It’s also obvious that the passion and respect customers feel for Zoho is mutual, as I have yet to meet a Zoho employee who isn’t friendly and always willing to help as much as they can.  And the other obvious thing is that is the culture of the company and it practiced by everyone, especially CEO and co-founder Sridhar Vembu.

A Conversation with Zoho CEO Sridhar Vembu

As busy as he was during the event, Vembu made time for the Small Business Trends community to do an “ask me anything” session with myself and SBT publisher Anita Campbell.  We covered a lot of ground with Sridhar thanks to the great questions sent in from the both the SBT and BizSugar communities, and we included a great deal of the discussion in the extended edited transcript below.  To get the full live streamed event watch the video above or the embedded SoundCloud player below.

Once again a big shout-out to Sridhar for sharing his time and wisdom with our community, and also a shout out to the community for the great questions!

Anita Campbell:  The first question is if you had to do it all over again, would you do it? Would you start Zoho and all the companies?

Sridhar Vembu:  If I had to do all over again, I would do it. But today’s circumstance, I mean the opportunities could be different so I will look for what the opportunity is, but I’d still do it. I’d still build the company similar to it. The focal area might be different area of technology, but I’d still be in technology, I assume.

What Would You Change about the Business If You Could?

Anita Campbell:  And so, what would you change? That’s the follow-up question. What would be different?

Sridhar Vembu:  Well, if I were to do it all over again, I’ll probably go into a vertical like healthcare where there’s lot of inefficiencies. I mean, in general, there’s an entrepreneurial rule, which is, whenever there is an inefficiency, an obvious market inefficiency, there’s an opportunity for someone to come and address that, fix that. So, that’s actually what we are doing with enterprise software, where there’s clearly we see an inefficiency, and we are addressing that. So, I see inefficiency in healthcare, so that’s what I would hope to fix. So …

Brent Leary: I want to ask one quick question before we open it up. You have a quote. Actually, Vijay [Zoho’s Chief Strategy Officer] said it during his session, but he was quoting you. You said that Zoho was good at leaving money on the table.

Sridhar Vembu:  Yes.

Brent Leary: Why is that a good thing?

Sridhar Vembu:  It sounds unusual, right? And I actually learned this lesson early on, that … and other people have said this, that you don’t want to be short-term greedy in this, and that’s what leaving money on the table really means. That if you really take care of the customer and you treat them right, and you leave money on the table, they stay with you long-term. In the end, they end up actually paying you more over the long haul. Particularly in our business, SaaS business, your lifetime value, I mean the length of time, period of time that customer stays with you is extremely critical.

Tell Us Something Personal about your Business

Anita Campbell: Actually, this is my question. I thought everybody would be interested in this. Here at Zoholics, the annual user conference, there was a slide when Sridhar was talking, and it showed some goats. So, tell us all about the goats, we want to hear something personal about you.

Sridhar Vembu:  Yeah. Actually, when we bought our home, which is a five acre ranch on the outside of Pleasanton, the goats actually, originally came with that ranch.

Brent Leary: Wait a minute, so the five acres, and they threw in the goats-

Sridhar Vembu:  They threw in the goats.

Brent Leary: … as part of the deal? Okay.

Sridhar Vembu:  As part of the deal. I mean, they were downsizing to a smaller home in retirement and all. They asked, “What do we do with the goats?” I said, “I’ll be happy to keep it.” So, I actually, the first time I owned goats. Even though I grew up in a village in India, I had a lot of background in the village, so I know farm animals. I knew cows and all of that, so I thought it would be fun to have goats around. Actually proved to be a blast. All the kids who visit, loved it. I mean it’s like a little … on a expedition for them. I loved it. I actually spend lots of time with them, when I’m playing with them. Then, it grew on us, and it also … There was a one acre fenced area where they took care of the grass, which, in that part where you ought to keep the grass cut. So, the goats take care of it automatically, so they also served a valuable function.

Brent Leary: Right.

Sridhar Vembu:  And nice thing about goats is they’re actually friendly and low maintenance in a way. Easy to care for.

Brent Leary: Making me want some goats now.

Anita Campbell:  Because they eat anything, right?

Sridhar Vembu:  Yeah, they eat anything. Actually, they eat everything.

What about Zoho One?

Anita Campbell:  Everything. Okay. So, Zoho One, we’ve heard a lot about that over the past year, and it’s a great deal. Is the Zoho One model a success yet?

Sridhar Vembu:  Absolutely. In this very event, we have maybe about 30, 40% of the customers are Zoho One customers, and lots of other customers now have expressed interest in moving to Zoho One. In fact, actually, once a customer comes into Zoho, and then they discover Zoho One, they actually fight the fight internally, to move everything to Zoho One. In fact, lots of customers asked us, how do I champion Zoho One in my organization? How do you help me champion this because it’s so good, and I want to spread this.

Brent Leary:  Yeah.

Sridhar Vembu:  And also, Zoho One actually has a growth engine where it has this negative churn. I mean, meaning that normally, churn is, you lose revenue, little bit of revenue. Zoho One has negative churn. It means that, actually, our existing customers keep adding more and more things to it. They see incredible value, so they add more and more divisions, more employees into this all the time. So, we are seeing tremendous growth from Zoho One.

Anita Campbell:  And so, if you would, for those who don’t know what Zoho One really means, describe what that is, and what’s so unique about it.

Sridhar Vembu:  Zoho One is all of our 40 plus, I guess 45 now, suite of applications, all of the mobile apps provided in one bundle, unlicensed, that are very affordable, extremely affordable. $30 per month, per employee model. So, it’s every employee in the business. All applications, they have access, any and all. Employees have access to which apps, but that is their choice. So, this takes out a lot of the pain point of software licensing, all of that. Now, the organization decides who needs which application, and then they can provide them access, and all of them are well-integrated, and at increasing a mode of integration going on all the time.

Are There Opportunities to Partner with Zoho in the Public Sector?

Anita Campbell:  We have a question here from Abraham Jenkins. He is the CEO of, and he says, “We are a SaaS company in the public sector, higher ed, and non-profit space with over 75 cities, across 11 states, using our applications.” What is Zoho’s presence in the U.S. public sector, and are there opportunities to partner?

Sridhar Vembu:  We actually have a public sector presence. We have lot of state and city governments using us now, and the federal level, we are actually going into it. Not in a big way yet, but that’s something that is in the works, but all of the city and the state level, we have penetration now. And definitely, this is something that we would like to partner with someone with a much more federal background as well.

Anita Campbell:  Brent, I know you have a question you’re dying to ask because you ask it all the time, about VCs and VC money.

Will Zoho Raise VC Funding or Go Public?

Brent Leary: Well, there’s always the Silicon Valley kind of progression for a tech business in particular; they start … a lot of them raise money, and then at some point in time, they decide they want to go public. That doesn’t seem to be your way of thinking, but do you ever foresee, is there any scenario that you could see either raising money or possibly going public?

Sridhar Vembu:  First of all, I want to make it clear, I’m not actually anti-VC or against VC, or any such thing. But just a preference because if you don’t need money, generally, you shouldn’t take it. That’s advice a lot of people who have taken money will give you. In fact, lot of the entrepreneurs who have raised lot of money, often when I meet them, they say, “Hey, we knew you guys. Actually you didn’t have to take money.” That’s actually a good thing. So, if you don’t need to take money, don’t take it. That’s the advice, and in our case, we don’t need to raise money. We already could go public. We have excellent financials, so which means it pretty much rules out any VC in the future as well.

As to, should you raise a lot, it is actually a very personal question about what your preferences are, what you want to do with the company, all of those. I prefer the freedom that comes with not taking outside money. Then, it allows us to change course, allows us to do unusual things. Lot of things we have done, today, even the Zoho One suite is unusually ambitious. I mean, in terms of the product depth and breadth. I don’t know that we see with a permitted amount of experimentation, the risk taking required for this, but of course, there is a risk bonding here, which is that we have to pay for it ourselves. So, it’s insanely ambitious at one level but another level, the fact that we had to pay for it also kept us grounded in a way. But if somebody gave us billions of dollars, maybe we wouldn’t have had the discipline. So, there is that aspect too.

So, it’s really, ultimately comes down to what are you looking to do with your company, and why are you starting the company in the first place. I valued freedom more than the money. So …

Brent Leary: Man, that says a lot. Matter of fact, in your opening keynote, you used that same term, insanely ambitious.

Sridhar Vembu:  The fact that we have pulled it off, and Zoho One works, and it has now about 20,000 organizations using it already, now, to me, the validation, tremendous validation of that vision, it’s … well, fastest-growing product right now in our portfolio.

What is the Greatest Threat to your Vision?

Anita Campbell:  Well, someone wants to know what would you say is the biggest threat to your vision for Zoho, and the role in helping small businesses?

Sridhar Vembu:  Always, I’d say the biggest threat to any company is ultimately itself.

Anita Campbell:  Okay.

Sridhar Vembu:  A long ago, I actually blogged this thought. I said companies don’t get killed by competition, they commit suicide. And it’s …

Brent Leary: That’s a good one.

Sridhar Vembu:  It’s true for every company, and that’s so I remind myself of that too. So, the biggest risk is that we lose our culture, we lose our values, we forget our customers. Those … biggest risks, and that’s true for any company. So …

What Do You Do When You’re Faced with a Difficult Problem?

Anita Campbell:  Question from…don’t know if I’m pronouncing this person’s name correctly … if I garble your name, Bernard Gerard. What do you do when you are faced with a difficult problem to solve?

Sridhar Vembu:  The most difficult problems that I have found involve interpersonal conflicts of one kind or the other, and it could be internally. I mean, obviously, we’re a large company, we have differing opinions. Often, those could become conflicts. And ultimately, those are the most difficult ones, and I first acknowledge that there’s no magic wand. I don’t have any special powers to solve these problems, and I don’t believe anybody does. So, I tell the parties often involved that, “Look, I don’t have any magic wand I can wave to make work together or make you resolve this conflict, but all I can say is that keep in mind the bigger purpose. Why are we here? And if you keep reminding yourself that, maybe you will find a way to resolve this.”

Often, that works out. Or sometimes people think I’ve just … it’s a carport on my part, not resolve a problem. But I have found that there’s no easy way to solve a lot of these issues. So, those are the hardest ones.

Anita Campbell:  All right. Well, Bernard, we’re going to give you twofer. You have the follow-up question. Okay, so, all right. What are the emotional reasons a person would want to use Zoho?

Brent Leary: That’s a really fascinating question.

Sridhar Vembu:  That question, yeah. Actually, it’s an interesting question. Yes, and that in fact, it addresses a particular thing I often talk about. We provide software. I mean, ultimately, it’s a piece of technology, it’s a tool, right? But we also describe it as our life’s work.

Brent Leary: Okay.

Sridhar Vembu:  So, that’s not a technology statement but life’s work that has a different meaning. It’s not just, you know … And I actually believe that all of us, we should think of our work. There has to be a purpose to it, and therefore there is a life’s work aspect to it. And if you think of that way, then you, as a customer of us, we want empower you to do your life’s work using our life’s work.

Brent Leary: Right.

Sridhar Vembu:  So, that is the emotion that I want to bring to this. And there is an emotion, and it goes beyond, I mean, just merely the material realm. It goes into the inner psychic reason that we use this thing. We have to have that connection.

Anita Campbell:  Yeah. Use our life’s work to do your life’s work.

Sridhar Vembu:  Life’s work. Yeah.

Does Zoho Avoid Hiring People with Degrees?

Anita Campbell:  I love that.  All right. Well, we were smiling earlier, Brent and I, because there was a question, and I know you’re going to have some fun with this, Sridhar. And the question is, which I don’t know if it’s true, I don’t think it is true but we’ll have you to answer it. Is it true that Zoho does not like to hire people with college degrees? Is that true?

Sridhar Vembu:  Well, I have a PhD. I should fire myself, if that’s true. For the record, about 80% of our employees do have college degree. I mean, 85, I think. But 15% of our employees don’t, and we’re proud of them. So, I’m not against people with a college degree. I’m against credentialism. There’s a difference here.

Most jobs, certainly every job in our company, almost every job does not require a formal credential, a formal degree or a certificate from some external authority. It’s essentially that we create, we can create the talent, and this is true for most employers, most jobs. There may be, if you are going to be a surgeon, yes, there is a credentialing, all that requirement. But most jobs are not that. I mean, software jobs are not that. A CEO job is not that. I mean, there’s so many famous CEOs who never had a degree. So, which means that, then why do we require these credentials? Why do we essentially, force then, people? I mean, force is the word I use, to go to college, take on debt, to earn the credential, when employers, in most cases, do not need the credential? So, that is my argument.

This doesn’t mean that we want to discriminate against people who have gone to college, and got the degree. I mean, still, majority of hiring is people with a college degree because that’s available in the market. But we want to make a difference to those people who either don’t want to go to college, or may not be able to afford to go to college, or don’t want to take on the debt. We want to create that alternative, so that is our Zoho University program, and that’s what we stress. So …

Brent Leary: And you’re bringing that to Austin too.

Sridhar Vembu:  We are bringing that to Austin now. That is now about 600 or 700 of our employees, about 15% almost now, of our engineering staff, they don’t have a college degree. And we are bringing that to Austin, and we are expanding the mission. Now, from marketing to sales, to support, a lot of jobs, we are going to create the cult by internally trading, and we are going to invest in that. That means that we, when we do this, we actually provide a stipend. It’s not just that the come and learn, we also pay them to learn because that … Actually, there is an accountability in the learner when you do that.

Brent Leary: All right.

Sridhar Vembu:  So, we passionately believe in this model. We believe every employer should do this. Then, this whole college debt crisis, a lot of this automatically get solved.

What is Zoho University?

Anita Campbell:  Zoho University. You mentioned that just a few minutes ago, and some people may not know exactly what that is, and it’s a pretty amazing program.  So, really, you are committed to people having knowledge and the right skills to work in the company, so much so that you actually created this whole …

Sridhar Vembu:  Yeah.

Anita Campbell:  It’s a formal program, isn’t it?

Sridhar Vembu:   Yes, yeah. Let’s step back a little bit, right? See, the fundamental challenge of any company, really, today, particularly today’s world, how do you create a talent, how do you understand that talent, how do you keep the talent, how do you empower the talent? These are the fundamental issues facing any company.

Brent Leary: All right.

Sridhar Vembu:  Because the particular business ultimately depends on the human, the talent pool that you have. I mean, that’s all there is to it.

Brent Leary: Right.

Sridhar Vembu:  The physical capital, the buildings, the computers, all that actually don’t matter. The human beings are far more valuable to any organization than any of those physical assets. So, that really means that companies, organizations have to find ways to create talent. That’s my belief, and Zoho University is a talent creation program, not just talent finding program. Which means that we take in these high school graduates, all the [inaudible 00:20:35] of the community college graduates, and then put them through our own rigorous, hands-on training, and critically, this thing runs within our own office premises so that they are surrounded by other employees who are doing their regular day-to-day jobs. That means that these students who are in training also get to see the context of a company around, and how people make a living. By itself, there is osmosis process, there is an education going on, there’s something being formerly taught in a classroom setting, in the lab setting. And then, there is all this osmosis going on across in a sort … over the air, so to speak, and the transmission.

In the end, about one to one and a half years, they become ready. And then, we induct them as apprentice employees, and then, within about six months to one year, depending on the particular discipline, all of that particular team, they become regular employees. So, somebody with a high school diploma, within about two years, maybe two and a half, could become a regular employee. During that time, they would have gotten paid a stipend, which also goes up when they become apprentice, and when they become regular employees, they get a regular paycheck. So, that’s the thing, and so they are wide deck entirely, the whole education is on us, and then there is a job. Of course, they have to complete it, they have to go through the whole rigorous program. Most of them do, our attrition rate is maybe about 5%. But actually, this year, we are taking about 150 students like that, from high schools, and the community college. And then, they go through this.

When will the First Class of Zoho University be Open?

Anita Campbell:  And when will the first class of Zoho University be open in Austin, Texas?

Sridhar Vembu:  Real soon, I hope, because we just actually took a larger space. We hope to dedicate some space. We’ll probably start small with maybe five to 10 students, and then expand as we go. Our goal is, a lot of our requirements should be coming from Zoho University. That is our goal long-term.

Anita Campbell:  And one other question, how do people apply for Zoho University? Do they have to know someone or is there a place online they apply? How does it work?

Sridhar Vembu:  Typically, we go to … In Austin, we’ll go to the nearby schools and community colleges, and the like. That’s maybe your first line of attack there. And then, we also go and put up webpages, we actually have a Zoho University webpage where you can actually apply online. But a lot of it is coming from the nearby … wherever we are, because we want it to be, even for the student, an easy adjustment process. Over time, we’ll expand this, as we grow. So …

Who Can Attend?

Brent Leary: Are there any age limits? Because maybe somebody a little older than a high school might be interested in this. Somebody like me. I’m glad to get paid to go to school. Learn to trade, yeah that’s great.

Sridhar Vembu:  Actually, it’s something that we are debating that because it’s going to be a mixed class, right? A lot of the high school grads will be there.

Brent Leary: Yeah.

Sridhar Vembu:  Then someone older. We have to think through this but yes, in principle, that should be possible because we also see … Actually, there’s another thing that I’m passionate about. It’s a topic that I actually haven’t talked about much. We actually see a world coming where a lot of older workers, even post, maybe they’re kind of retirement, but they’re still active, they’re physically active, they can do, still, work. We actually want to tap those skills now because the reason is, we have a major demographic burst coming worldwide. I mean, Japan is already there. The burst is already there. Every year, the population’s declining now, half a million or so, and it’s coming everywhere. It’s the birth rates dictated, this is like baking a cake right now. Which means that businesses have to scramble to find talent, and there are people … My dad is 76 and he’s still active, and he still does part-time work. So, I think that lot of people, even the 60s, maybe even 70s could do work, maybe part-time, and companies have to be open to that type of talent.

So, that’s something that I’m actually thinking about also instituting, because we have to do these things in order to first, A, keep them busy and active, B, tap their talent and wisdom.

Brent Leary: Right.

Sridhar Vembu:  So, these are some of the things I’m thinking about.

Brent Leary: That’s great to hear, actually.  I want to lob one in, if you don’t mind.

Anita Campbell: Yeah, that’s cool.

What Do You Wish You had Done Differently?

Brent Leary: Most people may not know that you guys have been around for 23 years. You started under a different name but you’ve been around for 23 year. You do a lot of stuff. What one thing do you wish you may have done differently over those years? Because you’ve done a lot of good things, a lot of things that have worked, but what one thing would you have like to have a do-over?

Sridhar Vembu:  If we probably would have gotten to the cloud sooner, if anything. I mean, we launched our first products in 2005, four, five, in the cloud, and until then, we were doing on premise products.

Brent Leary: Yeah.

Sridhar Vembu: Those things still sell well actually, for us. Those still are making money, and they’re doing very well. Our ManageEngine division. But I would have gotten to the cloud sooner, so that’s probably one thing if I do over. And actually, we were tying around with these ideas as early as ’99, 2000.

Brent Leary: Wow.

Sridhar Vembu:  Really. But then, this whole burst intervened, and it threw us off course. It threw a lot of companies off course.

Brent Leary: I remember. Yeah.

Sridhar Vembu:  You remember that, ’99, 2000. But we survived it, but the casualty, one of the price we paid was our cloud initiatives got derailed a lit bit. So …

How Does Zoho Empower eCommerce?

Anita Campbell:  Someone wants to know could you talk a bit about how Zoho empowers eCommerce entrepreneurs? So, what are you doing for eCommerce entrepreneurs?

Sridhar Vembu:  We just launched a whole commerce suite yesterday, Commerce Plus, that is a full suite of eCommerce along with the inventory, along with the accounting, integrating with CRM, integrating with the marketing tools, all of it. It’s the integrations, the whole suite is like never before, so that’s something that we just launched yesterday. Please take a look on our website, Zoho Commerce Plus.

Anita Campbell:  That’s actually ambitious vision.

Sridhar Vembu:  Yeah, it is.

Anita Campbell:  And I think it’ll be welcomed by those who want to sell, and maybe they’re already using Zoho products now. You’ve really got a solution for them.

Sridhar Vembu:  Yes. Yeah, we really believe so.

What Advice Do You Have for Growing a Business?

Anita Campbell:  Someone wants to know as a startup or company starts growing, lots of opportunities and projects come in. What advice can you give to those that will really make you grow?

Sridhar Vembu:  You won’t always stretch yourself a little bit, in terms of … So, every project you evaluate in terms, first, of course, when you are a small business, you need cash. That’s a fundamental requirement. You got to stay in business, keep the lights on, put food on the table. So, that’s your first requirement, does it pay? Because if somebody cannot pay you, well, maybe as a small business, you cannot actually sell them, right? Unless you are independently wealthy, which I assume most are not. Most small businesses are not. And then, once you satisfied that fundamental requirement that you’ll get paid, the second one will be, does it stretch you a little bit outside of your current comfort zone?

It cannot stretch you too much because then you might break, or your organization might break, and may not deliver, but you always want to stretch yourself a little bit. And every project you take, if it stretches your capabilities, then the next project, it can stretch a little more. That is how we grow, and that’s what I hope you know you can do with this.

Anita Campbell:  Stretch.

Sridhar Vembu:  Stretch, stretch.

Anita Campbell:  And stretch some more. Yes.

Sridhar Vembu:  More, yeah. A little more, little more. Like yoga.

What Are Your Plans for Succession?

Anita Campbell:  Now, this person wishes to remain anonymous. I don’t know, this might be an employee of Zoho asking this [laughter] but they want to know what is your succession plan? Is there some news you … or are you planning to retire any time soon?

Sridhar Vembu:  No. I don’t know, maybe I look so old now. I’m not that old. But yeah, actually, I get asked inside [the company] this question. Our employees do ask, and truth is our employees are not afraid to ask the question

Brent Leary: That’s says something about your culture, that they’re able to ask that kind of question.

Sridhar Vembu:  Yeah, yeah. Because actually, look, I remind people all the time that everything … See, there’s a Buddhist philosophy, right? Everything is transient. I mean, astrophysics tells us this whole universe is transient. This earth is going to be consumed by the sun one day. That’s what the astrophysics tells us. So, everything is transient. We’re all going to die one day, as they say. But that means you are actually liberated in a way. You ought to feel that. Why do we stress about it so much? Enjoy it, enjoy the flow.

So, there is a very, really strong management group in Zoho. There is a lot of middle managers, very strong. In fact, this level of products cannot be built by one person running everything.

Brent Leary: Right.

Sridhar Vembu:  And I’m not that person, and it doesn’t happen that way. There is extremely capable people running various aspects of Zoho, and I’ve already designated successor in case something might happen to me, so that’s in place. Also long-term, meaning, I hope to be alive long-term. So, everybody is going to die but I don’t want to die soon. So, I definitely want to create a talent pool that is ready to take over and run the company, because I do want the company to outlive me, which like all of us, we want our children to outlive us, right? In the same way. So, that’s the idea.

Brent Leary: Great.

Talk About Your Services for Enterprises

Anita Campbell:  All right. So, you’ve talked about going to more serving enterprises, and in fact, you’ve had this division for a long time, that basically serves the Fortune 5000, I know.

Sridhar Vembu:  Yeah.

Anita Campbell:  But someone wants to know what is the impact on small businesses as you get these bigger customers? Are you going to leave small businesses behind?

Sridhar Vembu:  Yeah. That’s a very legitimate, very good question. Lot of companies have done that. My personal guarantee is that’s not going to happen. You look at our product and our pricing, how we are expanding the Zone One suite. In fact, yesterday we added two new products into Zoho One. So, the very smallest business inherits all of these powerful technologies at that same price, the $30 per employee, per month. So, it’s an incredible offer there, so we will continue this. That itself is our commitment, so we … See, we remember our roots, and we remember where we came from. We don’t forget that. That rootedness is part of our culture, very much of our company culture, so we definitely will continue to serve this, even as we serve larger customers. Because they also come, they also see the value and so on.

Anita Campbell:  And just to add a little editorial comment there. From the small business perspective, that’s so important to hear.

Sridhar Vembu:  Yes.

Anita Campbell:  Because there have been many instances where small businesses have started with a product, and then you just get left behind. I mean-

Sridhar Vembu:  Yeah.

Anita Campbell:  The product-

Sridhar Vembu:  One-

Anita Campbell:  … gets increasingly more expensive and …

Sridhar Vembu:  That’s a key one, actually, watch whether we are raising the prices on the lowest tiers, all of that. We actually have learned on that. In fact, we’re lowering prices often. So …

What is the Biggest Challenge Coming for Small Business?

Anita Campbell:  All right. So, someone wants to know … Actually, this is Bernard wants to know in five year’s time, what do you think will be the biggest business challenged, and what is Zoho building now that’s going to be able to respond?

Sridhar Vembu:  Yeah. In technology industry, one interesting trend is now vertical integration; the best way to describe is the Apple model. How Apple goes from semi-conductor, to software, to the iCloud. That model. And increasingly, tech companies are becoming vertically integrated. In fact, this is also a challenge to a lot of cloud software application vendors because they tend to be shallow where they depend on somebody else’s layers and layers and layers below it, which I believe is going to pose challenges long-term.

Brent Leary: Yeah. I want to ask one quick question.

Sridhar Vembu:  Yeah.

Brent Leary: You hear all the things that Amazon has done, and you have AWS, and a lot of small businesses have built their business on top of that. Zoho has a lot of business applications, you guys have a huge amount of technology, technical power. Have you ever thought of ZWS?

Sridhar Vembu:  Actually, we launched something called Zoho Catalyst in this event, that’s like the beginnings of this. We have a fairly sizable infrastructure now, eight data centers around the world, all of that. We are starting to expose all of these through our own equivalent of those cloud services, and we also do deep R & D stack. We have the full stack that I was talking about, which I believe is going to be very critical. This is the challenge that every cloud company faces, this whole vertical integration and that, the need to invest in all of the R & D to keep up, and we are going to expose all of this to customers. Zoho Catalyst is the beginning of it, but we are working on more projects on that front.

Brent Leary: Awesome. Did you have one last question from the audience or …?

Anita Campbell:  Okay, one last question then, real quick. What’s the one thing Zoho customers do not know or may not know, but should, about the company?

Sridhar Vembu:  That’s a tough one. That’s a tough one, actually. What’s the one thing that …

If you go to, you’ll see three divisions there. is one of our divisions. There’s ManageEngine and there’s Web NMS, and these two divisions, ManageEngine sells IT management software to enterprises. So, we actually have very large enterprises as customers there, in that division, and then we have Web NMS, which actually is IoT, the Internet of Things, and telecom software, the telecom players. These are things that are not well-known about us, most people don’t know. Most Zoho customers have never seen those but I would invite you to go take a look at, and they’ll see these three things, and they can look up. This is all the same company, but the same offices, same everything. But it’s just that people don’t know that we have these three divisions.

This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.

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Brent Leary Brent Leary is the host of the Small Business Trends One-on-One interview series and co-founder of CRM Essentials LLC, an Atlanta-based CRM advisory firm covering tools and strategies for improving business relationships. Brent is a CRM industry analyst, advisor, author, speaker and award-winning blogger.