AI is dusrupting industries across the world, and it’s also caused Indian companies to scramble and make changes.
Zoho CEO Sridhar Vembu has stepped down, and announced that he’d focus full-time on R&D initiatives. Vembu had founded Zoho in 1996, and had been its CEO for decades. Zoho co-founder Shailesh Kumar Davey will serve as our new group CEO for Zoho and replace Vembu.
“A new chapter begins today,” Vembu posted on X. “In view of the various challenges and opportunities facing us, including recent major developments in AI, it has been decided that it is best that I should focus full time on R&D initiatives, along with pursuing my personal rural development mission. I will step down as CEO of Zoho Corp and take a new role as Chief Scientist, responsible for deep R&D initiatives. Our co-founder Shailesh Kumar Davey will serve as our new group CEO. Our co-founder Tony Thomas will lead Zoho US. Rajesh Ganesan will lead our ManageEngine division and Mani Vembu will lead the Zoho.com division,” he said.
“The future of our company entirely depends on how well we navigate the R&D challenge and I am looking forward to my new assignment with energy and vigor. I am also very happy to get back to hands on technical work,” he added.
It perhaps makes sense for Zoho to take drastic steps to navigate the changes that AI might bring. Zoho provides software solutions for companies, but AI models have become so good that they can make new software solutions at a fraction of the cost as before. This could lead to many companies choosing to simply build their own software solutions as opposed to relying on third-party alternatives, which could not only reduce usage for SaaS products, but also put downward pressure on the prices they can charge their existing customers.
This scenario had been predicted by Microsoft CEO Satya Nadella, who’d said that the AI revolution could cause SaaS companies to collapse into a model where an AI layer would rule the roost, and companies would only serve as databases for storing data. Several initiatives have already begun to disrupt the SaaS industry, such as former Meta executive Chamath Palihapitya’s new incubator 80-90, which aims to offer 80 percent of features of existing SaaS companies at a 90 percent discount, enabled primarily by how easy AI has made it to replicate existing software.
On the other hand, there might be room for an SaaS Indian company to actually innovate and come up with original research and products. China’s DeepSeek has taken the world by storm by creating an AI model that’s at par with OpenAI’s top models, and is being offered it at a fraction of the cost. India, thus far, hasn’t had any breakout AI successes so far. And with existing software models looking poised for disruption, the country’s best minds would do well to take Sridhar Vembu’s lead and devote themselves to conducting deep R&D research instead of making marginal improvements in the software solutions they’ve been building for decades.