Is R&D The Elixir Of ZOHO Corporation That Has Kept It So Robust That It Can Hire Even Through Economic Downturns?

Zoho, an Indian Software-as-a-Service company(SaaS), is looking to hire roughly 1,300 people for its new office in the Kappalur region at Madurai. According to Sridhar Vembu, who informed this on Twitter, even while recruiting has slowed, the long-term growth strategy of the company is rural. In November 2019, Zoho creator Sridhar Vembu relocated from Silicon Valley to a community in Tamil Nadu’s Tenkasi district to strengthen rural populations. Is it R&D that keeps the wheels of Zoho moving?

What was the study that confirmed the methodology and aims of ZOHO can ramp up its rural revitalization efforts?

Zoho hired Economix Consulting Group to research the socioeconomic impact of its business in Tenkasi. According to the research, which included 7,300 minutes of interactions with almost 300 stakeholders, and launched a decade ago in 2011, has increased job possibilities and quality of life for the district’s residents.

How did ZOHO recruit amid an economic downturn, and what did it do to survive in the face of adversity?

If a company is recruiting, it implies that the firm has a robust business model. Let’s learn the business model of ZOHO.

Zoho Corporation has maintained a conservative corporate approach, particularly when it comes to cash management. It chooses to invest its income in research and development rather than high-volume marketing. This strategy has allowed the firm to remain growth-oriented since its inception, surviving the dot-com crash in 2000 and the Great Financial Recession in 2008. Furthermore, according to Sivaramakrishnan Iswaran, worldwide head of Zoho Finance and Operations Suite, the technology firm emerged stronger through these difficult times because it was capable to pivot its business models.

Why is ZOHO so focused on R&D; is it the elixir of ZOHO corporation?

Businesses that do not invest in innovation are exited from the market as they are incapable of keeping up with fast change and keep the momentum.

One characteristic that distinguishes Zoho and its founders is their lack of pretension and flash. Even if the firm declared that it has good yearly revenue, the focus of Zoho is not only on hypergrowth but also on sustainability. When most businesses cut expenses and save cash till the macroeconomic slump is over, Zoho has committed to boosting its R&D investment over the next five years to develop a strong tech foundation.

Indian lands are the building blocks of ZOHO’s R&D.

What is essential to Zoho’s profitability is that the R&D staff is wholly headquartered in India, allowing the firm to retain a relatively cheap cost of tech development.

Startups frequently claim that India lacks major R&D infrastructure for technological progress, with many referring to Indians working in Silicon Valley to construct building blocks for large tech enterprises. Instead of glancing around, Zoho chose to face the R&D problem full-on. It is best seen by Mr. Vembu’s mention of vertical integration, which creates cohesiveness and interplay among 55+ products of ZOHO.

While many other firms have struggled to manage a big product portfolio in the present economic situation and have had to withdraw from markets, Zoho is doubling down. Furthermore, in a depressed market, the fact that Zoho solutions cut certain operational overheads for small enterprises has been a major selling element.

How ZOHO can compete with Big Technologies?

With the loss of Intuit-owned Quickbooks from the Indian market, Zoho has made inroads in the SMB accounting software area. Quickbooks will be unavailable in India after April 2023, and according to Mr. Vembu, Zoho is already preparing to take market share.

The CEO shifts the emphasis back to R&D, centered on data, data processing, and data storage. Small and medium-sized enterprises, in his opinion, are increasingly becoming concerned about giant internet players utilizing their confidential data to become competitors or consume their business. He believes that R&D expenditures in India have increased not just the process of adoption but also the opportunity for cross-selling and upselling to current clients, which is critical to financial sustainability.

There is hope at the end of the darkness.

When global companies are recklessly laying off thousands of employees, Indian firms shed some light of positivity on the faces of job seekers. Not only ZOHO, but earlier, TATA group has also opened its doors to laid-off employees from foreign lands. Though there are many loopholes in the Indian entrepreneurial system, corporations like ZOHO and ZERODHA give good hopes and show resilience in their companies with justified business models.

Edited by Prakriti Arora