Delayed Canadian data centre one of few Zoho setbacks in COVID response

Zoho has had a broad COVID response strategy involving multiple initiatives, which largely reflect its own philosophy as a company.

Sridhar Vembu, Zoho’s CEO

Cloud software suite vendor Zoho has addressed the COVID-19 pandemic with an aggressive strategy to provide additional support for its customer base, many of whom are smaller companies which have been more endangered by the disruptions COVID has created. Zoho was early to market with its Small Business Emergency Subscription Assistance Program (ESAP), and rolled out a new suite of apps, Remotely, to help companies make a smooth transition quickly to a Work From Home environment. Their plans to establish a Canadian data centre have been impacted by the pandemic however, so that instead of being up this year, next year is a much more likely target.

Zoho has a highly unusual corporate culture by the standard of the modern IT industry. The company’s global headquarters are in Chennai India. Many of their corporate philosophies are more akin to a 19th century British manufacturer, however. They are committed to organic growth, don’t do acquisitions, and are philosophically opposed to debt, with the company having been entirely bootstrapped. They also have a hearty contempt for venture capital firms and the way that they perceive the VCs inflating company values and distorting markets.

Zoho’s approach to its workforce reflects those views. For 16 years, they have run a training facility in India as an alternative to traditional higher education, designed to make students more serious and not force them to roll up debt. Originally called Zoho University, and now rebranded as Zoho School of Learning because they do not offer a formal credential, it offers students a two-year program with a curriculum focused on technology, business English, and business math. The students, many of whom are from underprivileged backgrounds, get paid a salary – and if they cut too many classes, can get fired. When they complete their program, instead of a diploma, they get a regular job at Zoho, with no student loans to repay.

Zoho’s employee relations philosophy is apparent in one of their new initiatives, which was not specifically designed for COVID-19, but dovetails nicely with it. They term this Rural Revival and Transnational Localism, and it refers to the establishment of rural-based satellite offices where home-based employees can occasionally go into an office.

“We have had a development centre with 450 employees, although it is on lockdown right now,” said Sridhar Vembu, Zoho’s CEO and founder. “We are now setting up about seven more development centres in rural areas. Work From Home is good, but people want an office nearby. These are satellite centres for Work From Home-based people, where they can go into work two or three times a week.

“These plans were in place before, but the pandemic accelerated them,” Vembu added.

In its COVID response strategy, Zoho was quick out of the gate with their ESAP program for small business. It provides a three-month subscription fee waiver for  small business customers who have fewer than 25 licenses.

“At the beginning of March, we saw that especially in the small business sector, there would be intense pain for a few months,” Vembu said. “So we announced this Emergency Subscription Assistance Program. About 12,000 of our 400,000 customers took advantage of it, 750 of whom are in Canada. We gave them three months of free subscriptions, although we have extended that to a few that still really need it.”

“Because ESAP was available to any organization with 25 or fewer employees, the 750 businesses in Canada means that we provided thousands of free licenses,” said LSP Chandrasekhar, Zoho’s Canadian Evangelist.

“We are committed to small business which has been our bread and butter, and this was a token of appreciation,” Vembu said. “We funded it by slashing our advertising budget and putting the money into helping customers in need.”

Another pandemic initiative was Remotely, a suite of apps that Zoho packaged together to help those who needed to transition quickly to Work From Home.

“We always had online applications and are used to working in the cloud,” Vembu said. “96% of our business was in the cloud – everything but software development, which was in house, although with the pandemic we have now pushed that into the cloud as well. Remotely is a remote suite bundle of 9 or 10 products, which we launched within a couple of weeks. We made it free until the pandemic is over.”

Unlike ESAP, Remotely isn’t limited to small companies.

“Addressing the remote needs of bigger organizations as well shows our commitment to making remote work available to more companies,” Vembu said.

Another new initiative is the COVID-19 App Program within their Zoho Creator low-code app development platform. Zoho is offering the platform and application building expertise free for government institutions and non-profit organizations that want to build a custom app to manage any COVID-related public activity, like patient monitoring, contact tracing, or food distribution.

One area where COVID has had a negative impact on Zoho is the establishment of a Canadian data centre.

“We have 10 data centres worldwide now, up from two a few years back,” Vembu said. “Canada is on the priority list. Establishing our Canadian data centre has been delayed for 3-4 months because of the pandemic, which makes it harder to get work like this done. By 2021 we should have it completed.”

“We are very bullish on setting up a Canadian data centre,” Chandrasekhar said.

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