Spurred by increasing adoption of cloud-based business solutions by enterprise clients and a number of recent wins in that segment, the India business of US- and Chennai-headquartered software-as-a-service (SaaS) firm Zoho Corporation Pvt Ltd is growing at a much faster pace than its global business, according to a top company official.
Sridhar Vembu, founder and chief executive officer of Zoho said, “In India, we are getting into a lot of shortlists, even in leading enterprises. We keep landing bigger and bigger enterprises as customers... Our business in India is growing much faster than our global business."
With over 300,000 customers, Zoho has a large base of small and medium businesses (SMBs) and an increasing number of enterprise clients, he said. “We are seeing substantial traction in the larger enterprises, in the last two or three years," he said.
The cloud business software provider offers software solutions that are relatively more affordable, especially for SMBs. Zoho One is suite of over 45 applications across business categories such as sales, customer support, back office operations, and collaboration tools.
“We recently launched our Catalyst service offering (a full-stack serverless platform for developers) and we will do more in that area," he added.
Zoho has offices in several countries including Japan, China, Mexico, Australia, the Netherlands, and United Arab Emirates. Vembu explained that the company is now growing “evenly across the world". “The revenue mix is shifting, the US is well below 50% now," he said.
"We are growing much faster in Europe, Asia Pacific, India, Middle East, Latin America and Africa. In all these markets, it is well-established, mature businesses who want to get on to digital transformation," he added.
The privately-held company is believed to have a topline of over $500 million, and has close to 8,000 employees. Zoho competes with Salesforce, Microsoft and other SaaS companies such as Freshworks.
Vembu said that their business model and structure gives Zoho a competitive advantage. “We have never sought external funding. We prefer to stay the way we are. Customers have come to appreciate a company like us...long-term focused, private, and not subject to quarterly shareholder pressure," he said.
"We have always been profitable. And we are growing at a solid clip," he said.
Mohsin Baig, Market Analyst, Enterprise Software at IDC India, said that the rapid adoption of SaaS solutions by both the enterprise and SMB segments in India is “driven by tactical decisions, where you can see the benefits within 6-12 months".
Compared to on-premise solutions that require intensive capital investments, SMBs continue to opt for SaaS solutions that enables them to purchase only the solutions they need instead of the entire suite.
Ease of deployment of SaaS solutions, guaranteed implementation of service level agreements (SLAs), abundant availability of workforce for technical support and software development, improved features and functionalities of these products are some of the main reasons for rapid adoption of cloud-based solutions, Baig said.
According to research firm Gartner, the worldwide public cloud services market is forecast to grow by 17% in 2020 to over $266 billion. SaaS, it said, will remain the largest market segment, forecast to grow to $116 billion next year.
In a statement in June this year, Gartner had said that India ranked among the nine countries whose growth rate (of public cloud services revenue) will be higher than the global average growth rate. Gartner estimated India’s SaaS revenue to grow 23% to $1.15 billion, this year.