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Israel-Palestine conflict could mean an uncertain future for tech, says Zoho CEO Sridhar Vembu

The Israel-Palestine conflict could result in massive uncertainty for the tech sector, according to Zoho CEO, Sridhar Vembu. In an exclusive chat with CNBC-TV18, Sridhar said that while the global IT scenario was already looking weak, the crisis in the Middle East could worsen the situation.

“The economy began slowing down even before the situation in the Middle East,” said Sridhar, “Today, nobody can be sure of what lies ahead for the tech sector until the Middle East crisis is resolved.”

The Zoho Co-Founder and CEO’s observations come even as the company saw a marked slowdown across products and geographies, since September: “In all of Zoho’s products and geographies, customer acquisitions and renewals decelerated across the board,” he said, “Our new customer acquisition growth dropped by 10 to 15%.”

What will encourage Zoho, however, is that its India growth continues to stay strong. The company reported a 37% growth in revenues for 2022 against 22% global growth in the same period. The Indian market, however, only accounts for a little over 10% of Zoho’s global revenues, although some change in the medium term could well be in the offing.

“India is Zoho’s fastest-growing market, and will be our number-one market in in five years,” said Sridhar, adding that the region has held up well even amid times of uncertainty. “The contribution from this region will exceed 20% by then, and if it goes up to 35% or 40%, it will become our largest market.”

Zoho Cliq gets an update, sees renewed growth

Even as multiple IT majors have begun asking employees to work from the office five days a week, Zoho has updated its Zoho Cliq app, which Sridhar describes as “WhatsApp for businesses”. According to the company, Cliq’s updates will enable all apps and capabilities to get onto one messaging interface.
“Cliq can help workspaces that follow the hub-and-spoke model where employees sign into work from far away places — not necessarily from home but from smaller offices,” said Sridhar. Incidentally, Zoho has reported a massive migration from existing technology stacks like MS Teams and Slack onto Zoho Cliq. “We are seeing a 35% in migrations to Cliq from users on Slack and MS Teams,” Sridhar added.

As a result, Zoho has reported a 150 percent revenue growth in Cliq for 2023 so far, with revenues growing 4x since 2020. According to Zoho, the app can service 100,000 employees per organization see as many as 30,000 active participants on a channel. Meetings can see 1,000 active participants, with LIVE events boasting a viewer count of up to 12,000.

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