Zoho Announces New R&D Investments and $1 Billion in Revenue

The Chennai-headquartered global technology company has announced that it plans to open 100 network PoPs (point of presence) around the world in the next five years for providing users with faster network, and also double investment for technologies such as blockchain and AI (artificial intelligence). Zoho, which spends three times its marketing expenditure on R&D and has received 25 patents in the last three years, attributes its growth to strong R&D capabilities across categories and markets, its diversified portfolio and to businesses choosing unified offerings over single products.

"At Zoho, we have always believed that technologists should practice more humility," said Sridhar Vembu, CEO and Co-founder, Zoho Corp. on the sidelines of Zoholics India, the company's annual user conference. "After all, we cannot code more food, nor compile new energy. Unfortunately, recent developments in our industry amidst a backdrop of rapidly deteriorating global economic outlook, are a rude reminder of our own limits as technologists."

"Fundamentals matter now more than ever, and our industry has to learn to lower the friction of technology, so that technology becomes far more affordable," added Vembu. "We have also crossed an important milestone of $1 billion in annual revenue. While growth has slowed down quite a bit in 2022 over 2021, our diversified product portfolio and the fact that we save money for customers has helped us so far. We hope to continue to serve our customers by bringing the highest quality offerings at very affordable prices."

The company, known for its prudent spendings, has surpassed USD 1 billion in revenue, with India leading the growth. India's annual revenue increased by 77% in 2021. The company is seeing uptake of products across different categories, with the top five offerings in India being Zoho One (the operating system for business), CRM Plus (customer experience platform), EX offering - led by Zoho People (human resource management platform) and Zoho Workplace (enterprise collaboration platform), and the finance suite led by Zoho Books (GST-compliant accounting software).

By offering unified solutions across various categories (customer experience, employee experience, marketing, collaboration, etc), that also integrate well with third-party solutions, Zoho is witnessing increased adoption from mid-and-large size businesses as well, especially in India. While there's an uptake of Zoho CRM Plus, Zoho People Plus and Zoho One amongst mid-large sized businesses, Zoho Books and Zoho Workplace are seeing mass market adoption.

Building technologies from the ground up

Zoho has built its technology stack from scratch - from apps and platforms to network and datacenters. The stack is horizontally, vertically, and contextually unified. In order to offer unparalleled value and user experience across the tech stack, Zoho invests in developing core R&D capabilities, apart from product development. These capabilities can be categorised into data, database and datacenters.

Data - For better processing of data, Zoho is focusing its AI development on statistical machine learning, computer vision, and natural language processing (NLP). The technology developed by the central R&D team is utilised by products for different use cases. For example, receipt digitisation in Zoho Expense (expense management tool) utilises optical character recognition (OCR) technology while Zoho Analytics utilises mathematical techniques for analysing data and Zia (Zoho Intelligent Assistant) utilises NLP for conversational AI. Zoho's AI technology translates into optimised processes, increased ease of use, and maximised revenue for the users.

Zoho’s AI models are built with privacy at the core, whereby accurate results can be generated with less data and without personally identifiable information (PII). This lowers the barriers for even smaller businesses that have less amount of data to utilise AI technology, while large organisations can gain insights securely without violating the privacy of their users. Zoho's AI capabilities can be used through APIs with the help of Catalyst (Zoho’s serverless platform).

Database - In order to improve data processing, Zoho utilises proprietary technology that runs on Graphic Processing Units (GPUs). This allows Zoho to process data on its database servers up to 50 times faster. This results in reduced latency period for users, who can now get business insights pulled from data across different Zoho apps, quickly.

Datacentre - Zoho runs its own datacentres - currently 12 around the world, including two in India. It has around 14 network PoPs that run its proprietary software. The software is focused on accelerating network access, which in turn results in faster connectivity for users who get real-time updates. This is particularly critical in communication and collaboration applications that are a necessity in a hybrid work culture. Zoho also has over 150 monitoring PoPs that enable users to monitor functioning of their websites.

"Our R&D focus in the coming years is to further unify our technology stack so that we are able to elevate the user experience," added Sridhar Vembu. "We will add 100 more network PoPs around the world in the next five years for enhancing network access. We are also working on adding Indian language support for our AI and blockchain technology for universal validation. Our focus will be on technologies that businesses–regardless of their size and location–will be able to use securely."

"We were using multiple apps for different purposes and over time, running the business became very chaotic because the apps didn't integrate well with each other, leading to data silos. Pandemic led to a 'moment of truth' when I realized that the only way to scale up is to move to a unified software solution. That's when we decided to move to Zoho One. We replaced more than 10 apps overnight. It made sense because the apps talk to each other. For example, as a startup, we were able to gain insights our sales, support and marketing efforts through Zoho Analytics. Access to critical information like ARPU, user engagement, retention stats, and other ratios were readily available throughout the year. It makes all the difference. I'd say it's made us at least 50% more efficient as an organisation," said Tejas Khoday, CEO and Co-founder, Fyers.

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