The ongoing Israel-Palestine conflict is casting a shadow of uncertainty over the tech sector, warns Sridhar Vembu, CEO of Zoho. In an exclusive conversation with Media, Vembu expressed concerns that the already fragile global IT landscape might further deteriorate due to the Middle East crisis.
Global IT Under Pressure
Sridhar Vembu noted, “The economy began slowing down even before the situation in the Middle East. Today, nobody can be sure of what lies ahead for the tech sector until the Middle East crisis is resolved.” This statement comes as Zoho, the multinational software company, witnesses a significant slowdown across its product lines and geographical markets since September.
Zoho’s Challenges Amidst Slowdown
“In all of Zoho’s products and geographies, customer acquisitions and renewals decelerated across the board,” Vembu stated. He pointed out that new customer acquisition growth dropped by 10 to 15%, indicating the impact of the turbulent economic environment.
Bright Spot: Zoho’s Growth in India
Despite the global challenges, Zoho finds encouragement in its strong growth in the Indian market. The company reported an impressive 37% growth in revenues for 2022, in contrast to the 22% global growth during the same period. However, it’s worth noting that the Indian market currently contributes slightly over 10% of Zoho’s global revenues. Nevertheless, Sridhar Vembu believes that significant changes are on the horizon.
India’s Ascension in Zoho’s Global Strategy
“India is Zoho’s fastest-growing market, and will be our number-one market in five years,” affirmed Vembu. He emphasized that the region has shown resilience even in times of uncertainty. He anticipates that India’s contribution to Zoho’s revenues will exceed 20% within five years, and potentially climb to 35% or even 40%, making it the company’s largest market.
Zoho Cliq: Bridging the Gap
In a parallel development, Zoho has enhanced its Zoho Cliq app, which Vembu likened to “WhatsApp for businesses.” The updated Cliq is designed to consolidate all apps and functionalities into a single messaging interface.
Embracing Remote Workspaces
“Cliq can facilitate workspaces that adopt the hub-and-spoke model, where employees operate from various locations, not necessarily confined to their homes but smaller offices,” explained Vembu. Notably, Zoho has observed a substantial migration from existing technology stacks like Microsoft Teams and Slack to Zoho Cliq. “We are witnessing a 35% increase in migrations to Cliq from users of Slack and Microsoft Teams,” Vembu added.
Impressive Growth in Cliq
As a result of these developments, Zoho has reported a remarkable 150% revenue growth in Cliq for the year 2023, marking a fourfold increase since 2020. The company asserts that Cliq can accommodate up to 100,000 employees per organization, with as many as 30,000 active participants on a channel. Meetings can host up to 1,000 active participants, while live events can draw an audience of up to 12,000 viewers.
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