In this special Zoho Day 2025 episode, Melody Brue sits down with Mani Vembu, the newly appointed CEO of Zoho to discuss his extensive journey within the company, Zoho’s evolving strategy, and the company’s plans for the future.
Key topics discussed:
- Mani’s Journey at Zoho: From joining as a software developer in 1996 to leading product management and eventually becoming CEO.
- Zoho’s Evolution: Transitioning from on-premise solutions to cloud, mobile, and now AI, while maintaining a culture of experimentation and bottom-up decision-making.
- Shift from Product-led to Regional-led Growth: Identifying industry-specific opportunities in regions like India (banking, financial services, auto-DMS) and expanding those strategies globally.
- Minimal Marketing, Maximum Impact: Leveraging organic, word-of-mouth growth while increasing visibility through enterprise events.
- Customer-centric Success Metrics: Focusing on adoption and usage metrics rather than aggressive monetization, exemplified by Zoho’s practice of advising customers to discontinue unused services.
- The Zoho Way: The advantages of being a privately held company, allowing for long-term strategic decisions without external investor pressures.
- Working with Sridhar Vembu: Insights into the collaborative dynamic between Mani and Zoho’s founder, now Chief Scientist, focusing on foundational AI advancements.
Watch the video here:
Listen to the audio here:
Disclaimer: This show is for information and entertainment purposes only. While we will discuss publicly traded companies on this show, its contents should not be taken as investment advice.
Transcript:
Melody Brue: Hi, I am Melody Brue from Moor Insights & Strategy, and I am here in Austin at Zoho Day. I am with Mani Vembu, who is the new CEO of the Zoho division. And we’re just going to have a little chat about what’s up, what’s new, and a new vision for Zoho. Thanks so much for joining me, Mani.
Mani Vembu: Thank you, Mel. Thank you for coming.
Melody Brue: Yeah, this has been a great couple of days.
Mani Vembu: Yes.
Melody Brue: I’m sure it’s a lot for you to get thrown into a bunch of analyst questions and have all of this feedback from everybody, but I want to start just going back with your history with the company. You’ve been with the company for a long time.
Mani Vembu: Yes.
Melody Brue: Talk me through a little bit of how you came up in the ranks with the company.
Mani Vembu: Yeah, so I joined this company in 1996, and I joined as a software developer. And then I moved into, say, different roles, and I started doing product management, working closely with the product teams, making sure that we understand the customer requirements and rates, building the right products for the right markets. And in early 2005, we started this cloud division, Zoho, and we started with our online word processor. We have been one of the first online word processors to launch in the market. Then we started in CRM project management, and I have been right through the journey of Zoho, starting from scratch to building all the 50 applications. So I’ve been through this journey, and in the last five years, I’ve been focusing on transitioning from an app vendor to a platform vendor, so that’s been my focus. And now I’m focusing more on from product-led growth to regional-led growth.
Melody Brue: Right. And in that long journey with Zoho, what do you think are the things that have one, stayed the same, and what are the things that have changed the most?
Mani Vembu: If you look at Zoho culture, we are a company where we encourage a lot of experimentation. Because we have started with the on-premise solution and we started with the telecom developer market focused, and then we transitioned already to different markets, to different, like say, from on-prem to cloud, from cloud to mobile. And now we are seeing cloud to AI. And in all these transitions, the way we look at it is, at the beginning of the transformation, we go into the exploration mode and then we get into the consolidation mode. So that means we explore a lot, we experiment a lot, we look at the rate. We don’t try to avoid every mistake, so we only ensure that the mistakes are not shipped to the customers, right? The customers are not impacted by the internal mistakes we do. So that’s when people will be free to experiment, try different things, and then come up with new ideas. And we remain as a bottom-up culture, let’s say, company. So we haven’t changed that fundamental culture of Zoho. And what we are seeing changing as we go is by enabling more partners and customers to do more with what we do instead of just… Actually, we started with the platform as a platform vendor, then we transitioned an app vendor. Now we are going back to our roots of becoming a platform vendor. That means allowing, empowering the partners and customers to do more with what we offer as a technology.
Melody Brue: And I think one of the things that I’ve heard consistently about Zoho is that there’s not a ton of marketing. It’s very much, there’s a lot of organic growth and there’s a lot of even word-of-mouth growth. But do you see that needing to change with a bigger push into enterprise?
Mani Vembu: Yeah, I see. Some things, like say, we want to get more visibility by going for more events, enterprise events, engaging with a lot of CEOs. So those things, as part of GTM, we want to do, but the same making sure that we go with the word-of-mouth reference, that is actually fundamental to how we want to grow. So that means not trying to grow the marketing first, sales first and then improve the platform. Rather, we took the other way where we first strengthened our platform and then now we are actually going for growth. So that way, the capabilities are already in the platform, so before we actually extend our reach. So that’s how we are looking at it. So in that sense, we also go with different regions, different industries and different verticals and different domains. Say, “What works where we have traction?” So what is the market dynamics and we want to be very regional.
That’s why I said from product-led growth, we are moving towards a regional-led growth, where in each region we identify the pockets of opportunities. Say for example, in India where I work closely, we identified banking and financial services as one industry. Then we identified auto-DMS as another industry. So these two industries, where we are investing a lot in terms of growth in the mid-enterprise segment. Whereas if you look at some other regions, it could be real estate, it could be construction industry. So based on the market opportunity, based on our strength in that market, so based on the references we have with the first initial few customers, we want to actually accelerate our growth in those segments.
Melody Brue: And part of your success in that is that you have people in those regions who live there, who work there, who really understand that, the culture, the way that people want to do business. So how does that translate when you say you’ve seen success in this one region? How do you then figure out how to translate that to another region? So for instance, seeing your success in the enterprise in India, how do you figure out how to bring that to the US?
Mani Vembu: Yeah, so see, if you look at the GTM efforts we’ve done in India. So we went back and identified the industries where we found the success, then we identified the customers who are the champions of that change. And then we started working in terms of our GTM is focused on towards those industries and those customer use cases, and then how do we reach more customers in that industry. So that’s how we started in India. So the same as what we are trying to do across regions. So first we go back to our existing customers and then see where they have used it and how in each of these industries varies our strength, varies our weakness, and test the weakness and then extend the GTM towards that.
Melody Brue: I like that you find the customer that can help champion, ’cause that really is going to be impactful, even if it’s somebody’s competitor. Seeing the success of how they’re using the platform could really sway somebody rather than more so than just reading a marketing material.
Mani Vembu: Yes.
Melody Brue: One of the things I think that has been a Zoho advantage is the Zoho way, which is you don’t answer to investors, you don’t answer to the street, you don’t answer to quarterly results. How does that influence how you think about, “What are my success measurements? Where do I need to be this year?,” because that’s really something that you all own internally. And how do you keep yourselves to that and how do you determine what those things are?
Mani Vembu: So for us, customer success is one, because we are answerable to our customers. At the end of the day, we have to make sure that their investments are protected. And so we look at the adoption metric, the usage metric very closely. That means how our customers… Say, “Are they using the software? Are they using our products? So are they finding value from the products we serve?” So that means, say for example, if we go in a CRM telephony, say, “How many calls are made using that? How many notes have been added? How many tasks have been completed? How many deals are getting closed?” So these are all the metrics that we measure. And then we also see how these metrics are improving and what we are doing to make sure if there is any friction in terms of usage, say, “How do we remove that friction from there?”
So that means it’s all about an option. So a lot of customers come and tell us, like, “Oh, you leave a lot of money on the table.” But that’s fine for us, that’s a good place to be in. So we don’t try to monetize everything. Even for example, with the AA, so we bundle the AA with our licenses, so we don’t actually charge extra. So the reason is because we want customers to… Say, as a consumer, wherever I use AA, the recommendation that comes, I know that it’s AA, so that’s why we call it as invisible AA So that means it’s bundled inside the product. We don’t ask the customer to go and enable separately. We don’t ask the customer to pay separately. So that’s been like our driving force is adoption. So we know that once customers adopt technology then the revenue is a byproduct of adoption. So that’s how we look at it.
Melody Brue: I had a situation where I was using a Zoho product for a specific project and there was a period of time that I wasn’t using it, and I got an email saying, “You’re not using this. You should probably stop paying for it,” in not those words. And I was like, “Who does that?” I mean, it’s impressive. But I was really quite surprised by that. But it’s nice, I never get an email from any other subscription I have that tells me to stop paying for something I’m not using.
Mani Vembu: Because, see, the way we look at it is, it’s finally about credibility and trust. So we have to earn the customer’s trust, we have to earn the credibility. So if we lose a customer, maybe we can win them again. But if we lose credibility, then we are not going to win them. There is no way we are going to win back, right?
Melody Brue: Yeah.
Mani Vembu: So we are very conscious about that. So even in opportunities where we see that our product may not fit, then we suggest the alternative for the customer rather than trying to oversell our sales rate. So we try to undersell rather than oversell because credibility is very important for us.
Melody Brue: That’s great. So as you go into this new role and you’re going to be working with Sridhar who has now stepped down from CEO to Chief Scientist, how do you look forward to working with him? What do you see that combination being like? And I ask this because a lot of CEOs have trouble letting go. Do you see him letting go or do you see him meddling in your business and what do you-
Mani Vembu: So see, if you look at the way Sridhar has built this organization, nothing is centralized. So we are a very decentralized organization where, everyone is empowered to make their own decisions. So for example, if I’m focusing on a market vertical, then I’m empowered to make the decision. So there is no day-to-day monitoring. We are not metric driven in that sense. Sridhar never likes to make every one of us metric driven. So in that sense, I see this as a continuity. And then if you look at Sridhar’s own focus areas, like say when we are doing the on-premise to cloud transition, so the whole cloud infrastructure, so in terms of say how we design it, because we didn’t host on a public cloud, so we actually built it from scratch.
So that means we have a separate IAM framework, we have a separate search framework. So the foundations, the foundational blocks have been decided, say 20 years back, and then we built on top of it. So the same way now he wants to focus on finding that foundation block for the AA transformation. His focus has always been that, so he always delegate the sales and numbers and rate marketing to us, and then he focuses most mainly on technology. So R&D is where his passion is. And so for us it’s the same. That means it’s a good outcome because this transformation is the biggest transformation we are going to have, and he’s going to refocus on that. Makes the foundation stronger for us. So that means the next 15 years or 10 years we can build upon that foundation. So that’s how we see it internally.
Melody Brue: Yeah. Well great. That’s awesome. Well, I wish you all the best in that, and I look forward to watching your journey as the new CEO.
Mani Vembu: Yes, thank you very much. Yeah, thanks a lot for having me. Thank you.
Melody Brue: And thank you for joining us, and I’m Melody Brue from Moor Insights and Strategy with the great opportunity to sit here with Mani Vembu as he takes on the new role of CEO of the Zoho division. We’re at Zoho Day 2025 and thanks for joining us.
