Zoho Success Story: Idea, Growth, Challenges, and Future

Story of Zoho: Fully Bootstrapped US based Indian Company

By Aakarsh Arora May 2 2021 11:36PM 711 Read
Story of Zoho: Fully Bootstrapped US based Indian Company

Recent years have witnessed the rise of Indian entrepreneurs who have founded one of the most innovative startups in different parts of the world. Often some stories are glorified in the media, while some remain unknown and underrated.

But are you familiar with the success of a bootstrapped startup, Zoho?

Zoho Corporation has become a multi-million dollar company & is an Indian technology company based in California specializing in software development, cloud computing and web-based tools. But it is interesting to know how the company started from the tech boom in the late 1990s & has reached this position.

Fun Fact: A bootstrapped startup is a company that is built and ultimately grows without venture funding. Zoho Success Story: How it all started

Sridhar Vembu founded Zoho in 1996 during the time of the infamous tech boom going on in the USA. He is known to the entrepreneur who turned down venture capital funding. The story takes us down the memory lane that, in 1996, it all started with a Network Management Company named AdventNet. Initially, he partnered with Tony Thomas, who had a vision about the network management software. So, in the early days, Tony held the position of CEO.

It was a tentative step because the startup was founded with money from friends and family. It was completely bootstrapped, and at that time, many network companies were initiated in the Bay Area, but gradually AdventNet got its first client, Cisco.

The software named WebNMS, which the company was developing, got the attention of many Silicon Valley giants. Until 2001, they ventured into the Japanese Market.

Zoho Story: Falling Phase

America saw one of the most significant market recessions when the tech bubble burst in 2001. A massive number of .com companies fell into bankruptcy. It also took a heavy toll on AdventNet. The tech boom resulted in a drought of customers.

It was a B2B business, so it was on the verge of serious business problems. So, to facilitate the business's prospects, the founders emphasized the research and development of new technological innovations.

The innovative efforts led to the development of a product named ManageEngine. Apart from this, they aimed at enhancing their sales and marketing techniques which resultantly gave them an established position in the market.

Zoho Success Story: Growth

It got difficult for a company like Zoho to get the employees from Ivy League schools on board. So, Sridhar made them ground-breaking decisions by recruiting some young engineers from fewer premium institutes.

The interesting fact is that employed who were amateurs or college dropouts were provided special training for nine months to make them efficient at coding and programming like the students of premier engineering institutes.

Zoho realized the problem faced by businesses of neglecting to buy expensive software. With the growing penetration of the Internet, the Silicon Valley startup felt the need of every business to have an online presence.

So, to get the first-mover advantage, Zoho initiated providing software to companies for work. The business idea has done wonders now as it has customers across Europe, Asia and Japan.

In 2009, the company primarily divided work into three divisions, i.e. ManageEngine, Zoho.com and WebNMS. As of today, Zoho has more than 50 million users in the world, with revenue exceeding $500 million.

Zoho Business Model

Zoho facilitates companies from every industry such as Sales and Marketing, Finance, Communication etc. The prominent source of revenue from the company is its Customer Management Software provided to cater to specific needs of companies in domains like Travel, Restaurant, Banking, Media, and Freelancing etc.

The CRM lends a helping hand to these businesses to reach a wider customer set by enhancing their Sales and Marketing Tunnels.

It has a unique and innovative business model of Marketing through Engineering.

It provides a Freemium model to businesses which leads to a free sign up initially and then charging a premium for upgraded software products.

The Zoho Corporation has been divided into four domains.
  • ManageEngine: This domain is serving almost 120000 companies, including three Fortune 500 ones. ManageEngine provides almost 30 software products in the areas of Data Science, Networks etc.
  • Businesses have the prerogative to use the products on a free trial for 30 days and then paying an upfront premium. It is a SaaS model which leverages cloud computing to provide innovative software.
  • WebNMS: WebNMS is the Service Provider Software of Zoho Corporation supporting Multivendor Management and Internet of Things Application. They have products like Symphony network, Telco network Solutions, along with other IoT solutions.
  • Zoho University: University has proven to a rewarding step for the company as it has an indelible contribution to the success of the company. Under this model, they select students from Chennai and some rural areas.

The students enjoy a great learning period of 18 months where they are imparted training in Maths, Computer Science and English. Also, they are given the opportunity of doing an Internship within the organization. In 18 months, the students, irrespective of their educational background, learn to write code.

This Business Model has served the company's engineering and software needs.

Zoho Success Story: Future Plans

Zoho's have set up itself in cut-throat competition with tech giants like Microsoft and SalesForce by developing market fit innovative software products. One factor which has led to the consolidation of the company is providing its software at a pocket-friendly price vis-a-vis its competitor, i.e. SalesForce.

The future of the business world lies in the hands of developing economies like India and China, so the company is foreseeing revolutionary opportunity in the Indian Market.

Soon, it is venturing into the Indian Market and planning to get 1 million customers over the next five years.

Final Words

Zoho has been one of the rarest and exceptional success stories where there is no involvement of external funding. But, the most enthralling aspect of the company's successful journey is its sheer focus on R&D.

From getting a shock after Bubble Burst, the way the company altered its business model and software products keeping in mind the future of web-based products, has been the eminent factor behind the company's growth. The corporations' incessant innovations and technical developments suggest that a bright future is lying ahead of Zoho.

Aakarsh Arora
Aakarsh Arora View More Posts

I am a student pursuing my graduation from delhi university. I am a curious person exploring the field of content writing. I am looking for more career opportunities in the field

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