Over the last quarter of the century, India has emerged as a leader in the software industry. In the year 2019-20, its software exports amounted to around $128.6 billion, according to RBI-released data. There are several IT majors in India, but most of these focus on software services or solutions. However, another section of the industry caters to innovations known as software products slowly gaining cognizance in India. Here is one such success story about a man who rose from humble beginnings to founding one of the country’s most successful conglomerates with a net worth of $2.6 billion.
Sridhar Vembu, CEO of Zoho, was born in the small South Indian township of Thanjavur. Born to a high court stenographer and a homemaker mother (neither of whom attended college), he completed his early education from a Tamil-medium government-aided school. As talent would have, he went on to complete his undergraduate studies from IIT Madras.
More recently, he has been on a mission to conduct a novel experiment to tackle India’s unemployment issue by transforming the country’s remotest villages into global Technology centres. Following this, he earned his degree in Electrical Engineering from Princeton University in 1989.
Sridhar joined Qualcomm, San Diego, in 1994 after completing his PhD. As an Electrical Engineer, he worked on wireless communication for nearly two years, encompassing CDMA, power control, and highly complex communications issues.
During his time at Princeton, he developed a deep interest in Political Science and Economics, which led to him reading various books and researching the performance of markets such as Japan, Singapore, and Taiwan and how they had managed to expand so effectively. It was also the time he learned that several Indian engineers were working in critical positions at multi billion-dollar corporations all across the globe. Yet, only a few Indian firms were prominent rivals in the software industry.
He believed that the problem lay in India’s socialist economy and was determined to correct the situation. So, when his brother Kumar brought up the idea two years later, he decided to follow. He quit his work and returned home to try and repair the nation’s problems with the help of technology. They collaborated with Tony Thomas, who had sufficient experience and expertise in network administration software. Finally, in 1996, he founded Vembu Software from a modest flat in Chennai’s outskirts. Except for simple assistance from family and friends, the company received no outside funding.
Tony served as the company’s CEO and Chairman at first, while Sridhar served as its Chief Campaigner. Sridhar was in charge of promoting and marketing the company’s technologies. He also began approaching consumers in the Bay Area, where several networking firms originated. Soon after, they began getting clients – Cisco was one of the first. The software started selling successfully. Many firms in Silicon Valley would adopt it, as would Japan, a budding IT market. By 2000, the firm had grown to 115 engineers in India and seven individuals in the United States, bringing in a revenue of roughly $10 million.
When the dot-com bubble burst in 2001, the networking industry suffered as well. During the downtime, many businesses had difficulties, and Sridhar’s was no exception. In 2002, the firm took a big hit, and its client base shrank to barely three, resulting in a dramatic catastrophe. Sridhar had just taken over as CEO of the firm, and it was a crucial period for him. He, however, saw the situation positively and made some changes, observing that the organization could not thrive on a single service. The bubble bust did not destroy the firm but rather pointed it down the right path.
Sridhar brought about many changes in the next two years after Tony left to establish another enterprise. Not only did he start utilizing Google Ads to reach out to clients directly, but they also rebranded the firm, calling it AdventNet in 2005. He also launched an informal institution called Zoho University.
His innovative tenure came with some interesting observations.
According to NASSCOM, more than 90% of graduates and 75% of engineers are unemployable due to the enormous gap between the pedagogy and industry’s requirements. Even after four years of study, millions of engineering students lack the skills to work in the industry. Furthermore, multinational corporations recruit toppers and graduates from the best universities worldwide, filtering away others who may be talented but lack the ability to stay discernible.
Thinking and Doing Differently
Sridhar could not compete with the larger giants and decided to try something new. Instead of choosing engineers with high-flying degrees from prominent Institutes, he hired young professionals that others rejected. He opted to seek smartness rather than universities, degrees, or grades. They also went to disadvantaged high schools and employed talented students who had dropped out of college owing to financial constraints.
His institute was explicitly meant to empower young people from India’s countryside, where work and education are considered luxuries.
This project was unique because Zoho provided these underprivileged students with a stipend of 10,000 rupees each month for the two-year course duration instead of charging fees. During their intensive training, pupils are taught Mathematics, English programming, and every other topic necessary to transform an average child into an employable applicant. And, regardless of their degree, they were enrolled into the company with an outstanding package after completing the training. Through this job, these learners have a once-in-a-lifetime opportunity to bring their families out of poverty.
Today, at least 10% of Zoho’s entire workforce comprises ordinary kids who became capable engineers. They hail from the country’s remotest villages. Zoho is currently experimenting with this model across ten villages in Tamil Nadu, wherein 200 of its engineers, 20 in each town, will collaborate and build software for the world. Zoho’s management is working hard to expand its empowerment ideas to communities in Kerala and Andhra Pradesh.
The company had changed its name to Zoho Corporation in 2009. Since then, Zoho Corp also renewed its direction, and their youngest division, “Zoho.com,” began offering internet-based software for work.
In November 2012, Zoho Corp’s total revenue was close to $200 million.
This figure increased at breakneck speed, with sales jumping from $300 million to $500 million. The company’s user base grew, too, from 12 million users in 2015 to 18 million in 2016. They were from across the globe – the United States, Europe, West Asia, and Japan.
Sridhar Vembu is exceptional. He has offices across 21 countries, including the United States, China, and Australia, but chose to reside in a tiny town some 650 kilometres from Chennai and run his $5 billion firm from there. He is a legend due to his scalable company model, which multiple billion-dollar companies across the country can easily replicate. Instead of handing out donations for a short-term effect, businesses may use this approach to have a long-term impact while also making enough money. Imagine the sort of magical transformation that can occur if billion-dollar corporations could establish such institutes.