CEO to chief scientist: Tracing the 3-decade journey of Saas pioneer Sridhar Vembu
Sridhar Vembu, Zoho’s visionary founder, known for his rural roots and a simple lifestyle, steps down as CEO and dons the hat of chief scientist to steer the company’s R&D initiatives and pursue his personal mission for rural development.
It’s not every day you see a billionaire in a humble veshti, sitting in a small town in Tamil Nadu, mapping out ambitious plans for a global SaaS unicorn. In the buttoned-up world of tech entrepreneurs, Sridhar Vembu certainly stands apart, and not just for his sartorial choices.
Unlike many tech leaders focused on scaling their businesses in urban centres, Vembu has prioritised setting up offices in smaller towns and supporting talent from underprivileged backgrounds—all the while steering clear of hefty VC funding.
Revered in the tech circles for his audacious style of self-funded entrepreneurship and commitment to social development, Vembu is the driving force behind Zoho Corporation, as he reshapes enterprise software and ushers transformation across rural communities. He is also credited with building a SaaS hub in Chennai, a modest city that largely keeps a low profile compared to its celebrated neighbour Bengaluru.
Now, after nearly three decades of scaling Zoho from a small entity operating out of an apartment in the suburbs of Chennai to a global $1-billion tech behemoth, Vembu has decided to give up the front-facing role to get down and work behind the scenes.
He has stepped down as the CEO of the firm to don the mantle of ‘chief scientist’ as he plans to dive deep into research and development efforts.
This decision may not come as a surprise to those who have followed Vembu’s career trajectory over the years and his strong urge to create social impact. In fact, it was only five years after Zoho (Advent then) was founded that Vembu decided to take up the role of CEO, till then preferring to lead sales and build traction for the company.
Journey through the ages
Vembu’s beginnings can be traced back to a small village near Thanjavur in Chennai, where he studied in a Tamil-medium government school until class 10.
After graduating from IIT Madras in 1989, he secured a scholarship to pursue a master’s and a PhD in electrical engineering at Princeton University in the United States. Upon completion of his doctorate degree, Vembu took up a job as a lecturer at Australian National University in Canberra. However, this was not meant to be his calling, as he resigned in just two weeks.
Vembu then continued his career as an engineer at Qualcomm in San Diego, US.
Meanwhile, in 1996, his brothers Kumar Vembu and Shekhar Vembu, along with Tony Thomas, a batchmate at IIT Madras, set up AdventNet—a software development firm catering to network equipment providers—which was later renamed Zoho.
While his brothers worked from home in Chennai, Thomas managed the company’s operations in the US. Sridhar Vembu was initially not involved in the firm, as he was still at Qualcomm.
In 1997, during a trade show at Las Vegas, Thomas asked Vembu for help in recruiting a sales representative. Vembu volunteered to handle sales himself and even printed business cards identifying himself as the VP of marketing and business development at Advent Network Management.
The AdventNet team bagged multiple contracts at the event. From then on, Vembu began serving as Zoho’s sales lead in the US, while the Indian branch focused on R&D and product development.
All the money the founders made was reinvested in the firm. It was only after a year that they began taking out a modest salary.
“We crossed $350K in sales and we ploughed it all back into R&D for our next product (Web NMS) and did not pay ourselves. We still were operating as independent companies, one in India and one in the US, the India one doing product R&D, and the US one doing sales,” Sridhar Vembu stated in a blog in 2021.
WebNMS was a subsidiary that handled the IT needs of telecom clients.
“In 1998, our sales crossed $1 million and only in mid-1998, we started paying ourselves modest salaries. In 1999 sales more than doubled, helped by the adoption of Web NMS,” said Vembu.
Vembu continued to be the VP leading sales, resisting Thames’ attempts to get him to become the CEO, mainly due to the fact that he was the company’s sole salesperson.
It was only in 2001, a year after AdventNet hired a sales professional that Vembu finally agreed to take on the role of CEO.
“They (the sales professional) taught me real sales by tripling revenue in 2000 and we were on our way to $10 million in revenue. Finally Tony persuaded me it was time for me to become CEO and that was that,” said Vembu.
Following a major pivot to software-as-a-service (SaaS), after the dot-com crash in 2001, Advent launched new products, including IT management solution ManageEngine and cloud division Zoho.com.
In 2009, the company rebranded itself as Zoho Corporation, focusing on delivering SaaS solutions for CRM (customer relationship management) and other business services.
Vembu has not only built a large SaaS empire without investors but has also inspired countless other tech founders to follow their dreams, thus turning Chennai into a SaaS epicentre.
Zoho currently boasts over 15,000 employees, 55+ products, and a user base exceeding 100 million. It serves customers across 150 countries, including China, Singapore and Japan.
The company, which turned a unicorn in 2023, has surpassed $1 billion in sales, generating an operating revenue of Rs 8,703 crore for FY23—up 29% from Rs 6,710 crore earned in the previous fiscal year.
Push towards R&D and small towns
Now Zoho seems to be set for another major pivot with a focus on R&D.
Announcing his resignation as CEO, Vembu stated that he is shifting his focus “full-time on R&D initiatives” while pursuing his “personal rural development mission.”
Incidentally, R&D is not a newfound fascination for Vembu who has always nursed a desire to build advanced technologies across various allied sectors.
In an exclusive interaction with YourStory in 2023, Vembu shared that Zoho’s research and development (R&D) team is working on multiple projects. He likened the entire journey to carving a path through an “unknown territory”.
“There’s no recipe or formula to it. If it were, everybody would do it. In any real R&D project, often in project management, people give the analogy of trains arriving on time. But that’s not the right analogy. The right analogy is cutting a path through an unknown jungle and territory. Or as the phrase goes—‘unknown unknowns’,” said Vembu.
He mentioned that Zoho is actively engaged in various initiatives through investments, partnerships, and self-driven projects–all of which are in their early stages. These include projects in advanced farming technologies (such as automated irrigation systems and drones to deter wild boars from damaging crops), telemedicine, and computer-aided design.
In a bid to deepen its deeptech manufacturing capabilities, Zoho recently backed two manufacturing startups, Karuvi, a mechatronics company, and Yali Aerospace, for an undisclosed amount.
Vembu, who has always believed in creating opportunities in smaller communities, sees the next wave of growth emerging from Tier II and Tier III cities in India.
“Coimbatore has grown much faster than Chennai within Tamil Nadu. Next, you would see faster growth in a town like Trichy and Tenkasi. Geographic growth is spreading,” said Vembu, in the interview to YourStory.
In fact, five years ago, Vembu moved to Tenkasi, a small town in Tamil Nadu, from where he strategises various ways to grow Zoho and empower youth in small towns.
Zoho has actively expanded its presence in Tier II and III cities across India, establishing multiple hub-and-spoke offices to tap into local talent and contribute to regional development. As of early 2023, the company was operating five hub offices and 30 spoke offices in these areas. Approximately 2,000 employees work across these locations, and 50% of them are local recruits.
More than an entrepreneur
Vembu is not just seen as a successful entrepreneur but is also recognised for his commitment to building a robust tech ecosystem in the country while nurturing domestic talent.
In 2021, he was honoured with the Padma Shri, India’s fourth-highest civilian award, and was appointed to India’s National Security Advisory Board. Last year, he was ranked the 39th richest person in India by Forbes, with a net worth of $5.85 billion.
Recently, he was appointed the co-chair of an apex committee to oversee the implementation of AI centres of excellence in healthcare, agriculture, and sustainable cities.
As a veteran in the SaaS space, Vembu has often voiced his opinions on a range of issues pertaining to the industry—including corporate layoffs and prioritising ethics over short-term profits.
Edited by Swetha Kannan