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Corporate Case Study | June 12, 2026
In 1996, two friends from IIT Madras started a software company in a small office near San Francisco to build network management tools for telecom equipment makers. They never raised a single dollar of outside capital. Thirty years later, that company, now called Zoho Corporation and headquartered in Chennai, posted revenue of Rs 13,544 crore in FY2025, employs roughly 17,000 people, runs over 45 integrated business applications under one subscription, and in late 2025 found itself at the centre of a national conversation when senior Indian government ministers publicly switched from Microsoft 365 and Google Workspace to Zoho’s productivity suite. This article traces Zoho’s journey from a bootstrapped networking startup to India’s largest privately held software company, examines its unusual rural employment model centred on Tenkasi, breaks down its FY2025 financials, and looks at what the 2025 government-led shift toward Zoho actually means, and does not mean, for Microsoft’s position in India.
Table of Contents
- Part I: From AdventNet to Zoho (1996 to 2009) The founding, WebNMS, the dot-com crash pivot, and the birth of Zoho CRM
- Part II: The Bootstrapped Philosophy and Ownership Structure Why Zoho never took funding, the Vembu family ownership split, and what it means for decision-making
- Part III: The Tenkasi Model and Zoho Schools of Learning Rural offices, hiring without degrees, and 20 years of Zoho Schools of Learning
- Part IV: FY2025 Financials and the Product Portfolio Rs 13,544 crore revenue, Rs 3,191 crore profit, and how Zoho Suite, ManageEngine, and Arattai contribute
- Part V: The 2025 Swadeshi Shift and the Microsoft Question Government adoption of Zoho Workplace, the Arattai surge, and what it does and does not mean for Microsoft
- Part VI: Global Footprint and Leadership Transition Offices in 80 countries, the Austin headquarters, and Sridhar Vembu’s move to Chief Scientist
- Frequently Asked Questions
Rs 13,544 cr
Total revenue including other income in FY2025, up 21% year on year. Operating revenue alone was Rs 12,313 crore, up 17.8% from Rs 10,456 crore in FY2024.
0
External funding raised by Zoho since its founding in 1996. The company has remained privately held by the Vembu family and co-founder Tony Thomas throughout.
45+
Integrated business applications available under the Zoho One bundle, spanning CRM, finance, HR, collaboration, and low-code app development.
Sep 2025
Month in which Zoho’s Arattai messaging app saw daily sign-ups rise from approximately 3,000 to 350,000 within three days, following endorsements from Union ministers.
Part IFrom AdventNet to Zoho (1996 to 2009)
The Founders and the First Product
Sridhar Vembu was born in 1968 in a village near Thanjavur, Tamil Nadu, to a family with modest means. He studied at a Tamil-medium government school before earning admission to the Indian Institute of Technology, Madras, where he completed a bachelor’s degree in electrical engineering in 1989. He went on to receive a master’s degree and a doctorate in electrical engineering from Princeton University in New Jersey. After a brief stint considering academia, Vembu took a job as a wireless engineer at Qualcomm in San Diego, California, in 1994.
In 1996, Vembu left Qualcomm and, together with fellow IIT Madras graduate Tony Thomas and members of his own family, founded a software company called AdventNet in the San Francisco Bay Area, with an early base in Pleasanton, California. The company’s first product was WebNMS, a network management software platform aimed at telecom equipment manufacturers and original equipment manufacturers who needed tools to monitor and manage large, complex networks. AdventNet built its early customer base among telecom infrastructure companies, competing for contracts against far larger and better-funded incumbents.
Why AdventNet was profitable from very early on: Unlike the typical venture-funded Silicon Valley startup of the late 1990s, AdventNet operated on revenue from paying telecom customers almost from the start, supplemented by capital contributed by Vembu’s own family members. This meant the company never had to optimise for the metrics that venture investors typically demand, such as rapid user growth at the expense of margins. It also meant that when the dot-com crash hit in 2000 and 2001, AdventNet did not face the same existential funding crunch that destroyed many of its venture-backed peers. The company had real customers paying real invoices for software that solved a real operational problem.
The Dot-Com Crash and the Pivot to SaaS
The 2000-2001 dot-com crash significantly reduced AdventNet’s telecom customer base, as many telecom equipment makers cut spending or went out of business entirely. Vembu turned down acquisition offers during this period and instead used the company’s accumulated profits to fund a strategic pivot. He had observed that small and medium businesses were poorly served by enterprise software vendors, who priced their products for large corporations with large IT budgets. At the same time, the emergence of browser-based software delivery, what would later be called Software as a Service, made it technically feasible to deliver business applications over the internet without requiring customers to install anything locally.
AdventNet began building a suite of web-based business applications aimed at small and medium enterprises. Zoho CRM and Zoho Writer were released in 2005, marking the company’s first products under the Zoho brand, even though the parent company was still legally named AdventNet at the time. The Zoho CRM product in particular gained rapid traction, crossing one million users by 2008. In 2009, the company formally renamed itself from AdventNet, Inc. to Zoho Corporation, reflecting the fact that the Zoho suite of applications had become the company’s primary identity and growth driver, eclipsing the original networking software business that had given the company its start.
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1996AdventNet founded in California
Sridhar Vembu, Tony Thomas, and family members start AdventNet near San Francisco. First product is WebNMS, a network management platform for telecom equipment makers.
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1998Operations expand to Chennai
AdventNet relocates a significant part of its operations to Chennai, India, beginning the company’s long-term shift toward India as its primary base while retaining a US presence.
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2000 to 2002Dot-com crash forces a strategic pivot
The telecom customer base shrinks sharply. Vembu declines acquisition offers and redirects accumulated profits toward building web-based business applications for small and medium enterprises.
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2005Zoho CRM and Zoho Writer launched; Zoho University founded
The first products under the Zoho brand are released. The same year, AdventNet starts what later becomes Zoho Schools of Learning, with six students and two teachers in Chennai.
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2008Zoho CRM crosses one million users
The Zoho suite gains rapid traction among small and medium businesses globally, validating the SaaS pivot.
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2009AdventNet renamed Zoho Corporation
The company adopts the Zoho name at the corporate level, reflecting the shift in identity from a networking software vendor to a broad business applications company.
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2011First rural office opens in Tenkasi
Zoho opens a satellite office in Mathalamparai, near Tenkasi in Tamil Nadu, with six employees, the start of its distributed rural employment model.
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2016Zoho Desk released, developed from Tenkasi
Zoho’s helpdesk product, Zoho Desk, becomes the first major Zoho product developed primarily by the Tenkasi rural office, demonstrating that product-grade software could be built outside major cities.
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Jan 2021Arattai launched publicly
Zoho’s messaging and calling app, initially built and tested internally, is released publicly amid global interest in privacy-focused messaging alternatives following changes to WhatsApp’s terms of service.
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Apr 2025Zoho Schools of Learning marks 20th anniversary
ZSL announces two new campuses in Tharuvai and Kumbakonam, Tamil Nadu, expanding from its original Chennai and Tenkasi campuses. The programme has produced over 2,000 graduates who make up more than 10% of Zoho’s workforce.
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Sep 2025Arattai goes viral; government Swadeshi push
Following endorsements from Union ministers, Arattai’s daily sign-ups rise 100-fold in three days. The app briefly becomes the top-ranked app on Indian app stores.
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FY2025Leadership transition: Shailesh Kumar Davey becomes Group CEO
Sridhar Vembu transitions from his active executive role to the position of Chief Scientist. Shailesh Kumar Davey, a long-serving Zoho executive, is appointed Group CEO.
Part IIThe Bootstrapped Philosophy and Ownership Structure
Why Zoho Has Never Taken Outside Money
Zoho’s decision to remain entirely self-funded for thirty years is one of the most unusual characteristics of any company of its scale globally, not just in India. Sridhar Vembu has stated in multiple public interviews that he believes external venture capital pushes companies toward short-term growth metrics that often conflict with building durable, profitable products. Because AdventNet was cash-generative from its early telecom contracts, and because family capital was available to bridge any gaps, the company never needed to seek outside investors, and has stated it does not intend to pursue an initial public offering.
This structure gives Zoho’s leadership a degree of strategic patience that few companies of comparable size possess. Decisions such as opening rural offices with single-digit headcounts, running a free two-year training school for high school graduates with no guaranteed return on investment within any fiscal year, or investing in long-gestation projects like a custom operating system and a privacy-focused web browser, are easier to justify when there is no quarterly earnings call and no external board demanding near-term returns.
Who Owns Zoho
As of the most recent public disclosures, Zoho Corporation’s ownership is concentrated within the Vembu family and the original co-founder. Radha Vembu, Sridhar Vembu’s sister and a long-time product leader for Zoho Mail, holds the largest individual stake at approximately 47.8%. Sekar Vembu, Sridhar’s brother, holds approximately 35.2%. Co-founder Tony Thomas holds approximately 8%, and Sridhar Vembu himself holds approximately 5%. This concentration means that strategic decisions, including the FY2025 leadership transition that moved Sridhar Vembu to the Chief Scientist role, are made within a small, aligned group rather than through the more dispersed shareholder bases typical of venture-backed or publicly listed technology companies.
What the ownership structure means in practice: A company with this ownership concentration can make decisions on multi-year time horizons without needing to manage external investor expectations quarter to quarter. It also means Zoho’s reported profitability, which has remained strong even as revenue has grown, is not artificially suppressed or inflated to satisfy any particular reporting narrative. The FY2025 results showed operating revenue growing nearly 18% while net profit declined slightly, from Rs 3,299 crore in FY2024 to Rs 3,191 crore in FY2025, a result the company attributed to higher employee costs, marketing investment, and expansion into new data centres and office locations. A founder-controlled, profitable company can choose to accept a temporary dip in margin in exchange for long-term market position, a trade-off that is harder to make under external investor pressure.
Part IIIThe Tenkasi Model and Zoho Schools of Learning
Building Software in Rural Tamil Nadu
In 2011, Zoho opened its first rural satellite office in Mathalamparai, a village near Tenkasi in the Western Ghats of Tamil Nadu, with just six employees relocated from Chennai to act as anchors for local hiring. The campus itself was built by converting an old fruit pulp processing factory. The choice of location was deliberate: Tenkasi had little economic activity outside of seasonal tourism tied to the Courtallam waterfalls, and the local government schools and polytechnics produced graduates with limited access to private sector technology jobs.
Zoho’s recruitment approach in Tenkasi does not rely on conventional college degrees. The company identifies promising students from local government schools and polytechnics, often before they have completed any formal higher education, and brings them through an internal training process before placing them into product teams. By 2016, the Tenkasi office had grown enough to develop and release Zoho Desk, the company’s customer support helpdesk product, as its first major independent product release, demonstrating that production-grade enterprise software could be built entirely from a rural campus. The Tenkasi campus has grown from its original six employees in 2011 to a workforce in the hundreds by the early 2020s and reportedly over a thousand by 2025, according to Zoho’s own published figures and independent reporting on the site.
An independent study on Tenkasi’s economic impact: Around Zoho’s 10th anniversary of operating in Tenkasi, a Chennai-based research group, the Economix Consulting Group, conducted a study on the office’s local economic effects. The study found increases in overall household income in the surrounding area, new high-tech skill development among youth who would otherwise have had limited access to such training, expanded employment opportunities that reduced the need for young people to migrate to cities for work, greater financial agency for women employed at the campus, and broader contributions to the socio-economic development of the Tenkasi region. While such studies are commissioned with the company’s cooperation and should be read with that context in mind, the underlying facts, such as the growth in local employment from six people in 2011 to several hundred within a decade, are independently verifiable.
Zoho Schools of Learning: An Alternative to College
Zoho Schools of Learning, originally called Zoho University, was started in 2005 with six students and two teachers in Chennai as an alternative pathway into the technology workforce for students who had completed Class 12 or a diploma course but did not want to, or could not afford to, pursue a traditional college degree. The programme runs for two years, includes a one-year internship within Zoho, charges no fees, and instead pays students a stipend throughout their training.
By its 20th anniversary in April 2025, Zoho Schools of Learning had expanded from a single specialisation in technology to include a School of Design, School of Business, School of Graduate Studies, and School for Advanced Study, operating across two existing campuses in Chennai and Tenkasi. To mark the anniversary, Zoho announced two additional campuses in Tharuvai and Kumbakonam, both in Tamil Nadu, extending the programme’s reach into more Tier 2 towns. The programme now receives approximately 20,000 applications annually from across India and has produced more than 2,000 graduates, who collectively make up over 10% of Zoho Corporation’s total workforce.
Tenkasi Rural Campus: Employee Growth (2011 to 2025)
Approximate employee headcount at Zoho’s Mathalamparai (Tenkasi) campus over time, based on company disclosures and independent reporting.
Part IVFY2025 Financials and the Product Portfolio
Revenue and Profit: A Slowing Margin Amid Strong Growth
For the financial year ended March 2025, Zoho Corporation reported operating revenue of Rs 12,313 crore, up 17.8% from Rs 10,456 crore in FY2024. Including other income of Rs 1,231 crore, primarily interest and investment income generated from the company’s substantial cash reserves, total revenue rose 21% to Rs 13,544 crore. Net profit, however, declined slightly to Rs 3,191 crore from Rs 3,299 crore in FY2024, a fall of just over 3%. The company attributed the margin compression to increased employee benefit expenses, higher advertising and marketing spending, and continued investment in new data centres and international offices, including new facilities in the Middle East, Australia, the United Kingdom, and Israel.
Geographically, North America remained Zoho’s largest market by revenue contribution at approximately 41%, followed by Asia at approximately 30% and Europe at approximately 23%, with the remainder coming from Latin America, Africa, Australia, and New Zealand. This geographic spread is notable for an Indian software company: the majority of Zoho’s revenue continues to come from outside India, even as its domestic profile has grown substantially through 2025 government adoption.
Zoho Corporation: Revenue and Profit, FY2024 vs FY2025
All figures in Rs crore. Operating revenue excludes other income. Source: Zoho’s consolidated financial statements filed with the Registrar of Companies.
How Zoho Makes Money: The Product Portfolio
Zoho’s revenue is split across three broad reporting categories. The tabs below break down each.
Zoho Suite (Business Applications)
Rs 7,051 crFY2025 revenue, 57% of total operating revenue
45+Apps bundled in Zoho One
SMB FocusPricing aimed at cost-conscious small and mid-sized businesses
Zoho Suite is the company’s largest revenue contributor and includes the products most familiar to end users: Zoho CRM, Zoho Mail, Zoho Books (accounting), Zoho People (HR), Zoho Projects, Zoho Analytics, Zoho Creator (a low-code app builder), and the Zoho Workplace bundle, which itself includes Zoho Writer, Zoho Sheet, and Zoho Show as direct equivalents to Word, Excel, and PowerPoint. These applications are sold individually or as part of the Zoho One bundle, which packages over 45 applications under a single per-employee subscription.
The pricing strategy here is central to Zoho’s competitive positioning. Rather than charging separately for each application the way many enterprise software vendors do, Zoho One’s bundled pricing means a business that needs CRM, email, accounting, and project management can often get all of them for less than the cost of a single comparable product from a larger vendor, provided the business is comfortable working within Zoho’s ecosystem rather than mixing and matching best-in-class tools from different vendors.
ManageEngine (IT Management and Cybersecurity)
Rs 4,863 crFY2025 revenue, approximately 39% of operating revenue
B2B ITSold to enterprise IT departments, not end users
On-prem + CloudStrong in hybrid IT environments
ManageEngine is Zoho’s enterprise IT management division, selling tools for network monitoring, endpoint management, identity and access management, and cybersecurity to corporate IT departments. ManageEngine predates the Zoho brand in some respects, tracing its lineage back to AdventNet’s original network management software business. It operates largely independently of the consumer-facing Zoho Suite and has built a strong reputation in the IT operations and security tooling space, particularly among organisations running hybrid on-premises and cloud infrastructure.
ManageEngine’s contribution of Rs 4,863 crore in FY2025 makes it the second-largest pillar of Zoho’s business after the core Zoho Suite, and its enterprise IT focus gives Zoho a foothold in corporate technology budgets that is distinct from, and complementary to, its productivity suite ambitions.
Arattai, Zoho Pay, and Other New Products
Rs 399 crFY2025 revenue from Arattai and other newer products, up from Rs 47.3 cr in FY2024
Jan 2021Arattai’s public launch date
Zoho PayConsumer fintech app integrated with Arattai chat
This category includes Arattai, Zoho’s messaging and calling app, along with other newer ventures such as Ulaa, a privacy-focused web browser, and Zoho Vani, a visual collaboration tool. Revenue from this category grew from Rs 47.3 crore in FY2024 to Rs 399 crore in FY2025, an eightfold increase, though it remains a small fraction of total revenue at roughly 3%.
During FY2025, Zoho also launched Zoho Pay, a consumer payments application integrated directly with Arattai, allowing users to send and receive money within chat conversations. This marks Zoho’s first direct entry into consumer fintech, an area distinct from its traditional enterprise and SMB software focus, and reflects the company’s broader strategy of using Arattai’s growing user base as a platform for new consumer services.
FY2025 Operating Revenue by Product Segment
Total operating revenue of Rs 12,313 crore split across Zoho’s three reported segments.
Part VThe 2025 Swadeshi Shift and the Microsoft Question
The Government Adoption Wave
In late September 2025, India’s Union Minister for Information Technology, Ashwini Vaishnaw, publicly announced that he had switched to Zoho’s productivity suite for his official work and encouraged other Indians to consider doing the same, framing the move as part of a broader push for technological self-reliance, often referred to in India as the Swadeshi movement. Around the same time, Union Home Minister Amit Shah and other senior ministers also stated they had moved to Zoho Mail for official correspondence, and the Ministry of Education reportedly directed its officials to use the Zoho Office Suite.
This government-level endorsement was followed by a substantial migration of central government email infrastructure to Zoho’s platform. Reports in late 2025 indicated that over 1.2 million central government employee email accounts had been migrated to Zoho’s email platform following a tender process and security audits, with subsequent reporting in early 2026 indicating the figure had grown to over 1.6 million government accounts. This represents one of the largest enterprise software deployments any Indian-developed SaaS company has secured from its own government.
What this migration involved technically: Migrating over a million government email accounts is not simply a matter of changing a login screen. It involves data migration of existing mailboxes, integration with government identity and authentication systems managed by the National Informatics Centre, compliance with government data security protocols, and training for end users who may have used Microsoft or other email platforms for years. The scale of this migration, and the fact that it proceeded through a formal tender and audit process rather than a purely symbolic gesture, distinguishes it from earlier instances of officials simply stating a preference for a particular product.
Arattai’s Viral Surge
Arattai, Zoho’s messaging and video calling application, had existed quietly since its public launch in January 2021 without gaining significant traction, recording fewer than 10,000 downloads in August 2025. That changed dramatically in late September 2025. Following endorsements from Union ministers including Ashwini Vaishnaw and Dharmendra Pradhan, who promoted Arattai as a Made in India alternative to WhatsApp and Telegram, the app’s daily sign-ups rose from approximately 3,000 to 350,000 within three days, a roughly hundredfold increase. Founder Sridhar Vembu stated publicly that the company added over 2 million new users in a single day during the peak, on October 1, 2025, and that Zoho was scaling its infrastructure on an emergency basis to handle a potential further hundredfold surge in traffic.
At its peak, Arattai briefly became the top-ranked application in the social networking category on both Apple’s App Store and Google’s Play Store in India, surpassing WhatsApp, Telegram, and Signal. The app crossed over 10 million downloads on the Google Play Store and surpassed one crore total Android installations. However, the surge proved difficult to sustain. By October 2025, Arattai had dropped from the top app rankings, and by later reporting, monthly active users, while still exceeding one million, had declined from their peak levels as initial curiosity-driven downloads did not all convert into sustained daily usage.
Arattai Daily Sign-Ups: August to October 2025
Approximate daily new sign-ups before, during, and after the September 2025 surge. Source: public statements by Zoho founder Sridhar Vembu and app analytics reporting.
So, Is Zoho Actually Taking Microsoft’s Customers in India?
The honest answer is that the picture is mixed, and depends heavily on which segment of the market is being discussed. At the level of individual government ministries and central government email infrastructure, a real and substantial shift toward Zoho took place in late 2025, backed by a formal tender process and the migration of over a million accounts. This is not a symbolic switch: it represents actual displaced usage of whatever email platform the government previously used for those accounts.
At the level of small and medium businesses, Zoho has been gradually building share for years through its bundled, lower-cost Zoho One offering, well before the 2025 surge. Indian SMBs that are price-sensitive and do not require the deep enterprise integrations of Microsoft’s ecosystem, such as Azure cloud services, Power BI, or Dynamics 365, have found Zoho’s pricing, which can be significantly lower than Microsoft 365 for an equivalent set of applications, an attractive proposition. This shift has been incremental rather than dramatic, and predates the 2025 government endorsements by years.
At the level of large enterprises, the evidence does not support a major displacement of Microsoft 365 as of mid-2026. Large organisations have typically made multi-year commitments to Microsoft’s ecosystem, including Teams, SharePoint, Azure Active Directory, and Dynamics 365, and switching costs at this scale are substantial, involving not just licensing but staff retraining, custom integrations built over years, and compliance certifications. Industry commentary on the 2025 episode has consistently noted that while Zoho has clear momentum and government backing, Microsoft’s maturity, security certifications, and depth of enterprise integration keep it in a leading position for large organisations, at least in the near term.
Reading the Swadeshi moment accurately: The September 2025 episode combined three distinct things that are easy to conflate: a government policy preference for domestically developed software in official communications, driven partly by data sovereignty considerations and partly by the broader Swadeshi political push; a viral consumer moment around Arattai that was significantly amplified by ministerial endorsements on social media and which cooled off within weeks; and a longer-running, slower structural shift among price-sensitive Indian SMBs toward bundled Indian SaaS offerings. Treating all three as evidence of an imminent large-scale displacement of Microsoft in India would overstate the case. Treating the government email migration and the SMB pricing advantage as real and durable trends, while treating the Arattai download spike as a largely sentiment-driven event that requires sustained product investment to convert into lasting usage, is a more accurate reading of what actually happened.
Part VIGlobal Footprint and Leadership Transition
Offices in 80 Countries, Headquartered in Chennai
Despite its Indian roots and the renewed domestic attention in 2025, the majority of Zoho’s revenue has historically come from outside India, with North America alone contributing approximately 41% of FY2025 revenue. Zoho operates offices in approximately 80 countries, with its global headquarters in Chennai, Tamil Nadu, and a significant United States presence headquartered in Austin, Texas. During FY2025, the company continued its international expansion with new offices and data centres announced in Australia, the Middle East, the United Kingdom, and Tel Aviv, Israel, reflecting both demand growth in those regions and a strategy of maintaining local data residency, which is an increasingly important consideration for enterprise and government customers concerned about data sovereignty.
The Leadership Transition: Vembu to Chief Scientist
During FY2025, Sridhar Vembu transitioned from his long-held position as Chief Executive Officer to the newly created role of Chief Scientist, a position focused on research and development rather than day-to-day operational management. Shailesh Kumar Davey, a long-serving Zoho executive and one of the company’s earliest engineers, was appointed Group CEO in his place. Mani Vembu continues to serve as CEO of Zoho.com, the core business applications division, while Tony Thomas, the original co-founder, leads Zoho’s United States operations, and Rajesh Ganesan continues to lead ManageEngine.
This transition is notable because it represents a deliberate handover of operational responsibility within a company that has never had to manage a leadership succession under pressure from external shareholders. Vembu’s move to a research-focused role allows him to concentrate on long-horizon projects, including Zoho’s investments in semiconductor design, agricultural technology through his rural initiatives, and the company’s broader product research pipeline, while day-to-day execution passes to an executive team that has grown up within Zoho’s own engineering culture.
What Zoho’s Trajectory Tells Us About Indian Software
Zoho’s story is unusual in Indian technology not because of any single product or any single year of growth, but because of the consistency of a set of choices made over three decades: stay private, stay profitable, hire from places most companies overlook, and build a broad portfolio of useful, affordably priced software rather than chasing a single breakout hit. The company crossed Rs 13,544 crore in total revenue in FY2025 without a single funding round, without a stock ticker, and with a significant share of its workforce drawn from rural Tamil Nadu through a training programme that charges no fees.
The events of September 2025 brought Zoho into a spotlight it had not previously occupied at this scale, with the company’s productivity suite name-checked by senior ministers and its messaging app briefly outranking WhatsApp on Indian app stores. What the data shows is that some of this attention translated into durable outcomes, most clearly the migration of over 1.6 million government email accounts to Zoho’s platform, while other parts, particularly the Arattai download surge, behaved like the viral spikes that many consumer apps experience: a sharp rise followed by a cooling period, with the longer-term outcome depending on whether the underlying product can retain the users it gained.
For Microsoft, the practical implication of 2025 is not an immediate loss of its large enterprise customer base in India, where switching costs and ecosystem depth remain significant advantages. The more relevant implication is that Zoho has demonstrated, at government scale, that a credible domestically built alternative exists, and that political and policy momentum can accelerate adoption of that alternative in segments where the switching costs are lower, such as government email and SMB productivity tools. Whether that momentum extends further into the large enterprise segment over the coming years will depend less on any single viral moment and more on whether Zoho continues to invest in the product depth, security certifications, and ecosystem integrations that large organisations require before they will consider a switch.
Frequently Asked Questions
Zoho, originally AdventNet, was profitable from its early years selling network management software to telecom equipment makers, which meant it generated its own operating capital rather than depending on venture funding. When the dot-com crash reduced its telecom customer base around 2000 and 2001, founder Sridhar Vembu used the company’s accumulated profits, supplemented by capital from family members, to fund a multi-year pivot toward web-based business applications for small and medium enterprises. Zoho CRM, launched in 2005, became the foundation for a broader suite of products that now spans over 45 applications under the Zoho One bundle.
Because the company never took on external investors, its ownership has remained concentrated within the Vembu family and original co-founder Tony Thomas. Radha Vembu holds approximately 47.8%, Sekar Vembu approximately 35.2%, Tony Thomas approximately 8%, and Sridhar Vembu approximately 5%. This concentrated ownership has allowed Zoho to make long-horizon decisions, such as investing in rural offices and a free training school, without needing to satisfy external investor return expectations on a quarterly basis.
In 2011, Zoho opened a satellite office in Mathalamparai, a village near Tenkasi in the Western Ghats of Tamil Nadu, starting with six employees relocated from Chennai. The office recruits local students directly from government schools and polytechnics, often before they complete any formal college degree, and trains them internally before placing them into product engineering teams. By 2016, the Tenkasi office had grown enough to independently develop and release Zoho Desk, the company’s helpdesk product, demonstrating that production-grade software could be built from a rural campus rather than a major city.
The rationale is both economic and philosophical. Economically, operating costs in rural Tamil Nadu are lower than in Chennai or Bengaluru, and rural talent, once trained, has proven highly capable. Philosophically, Sridhar Vembu has spoken about wanting to reduce the migration pressure that pulls young people away from their hometowns toward large cities in search of technology jobs. An independent study by the Economix Consulting Group around the Tenkasi office’s tenth anniversary found measurable increases in local household income, skill development, and employment opportunities in the surrounding area.
Zoho Schools of Learning, originally called Zoho University, started in 2005 in Chennai with six students and two teachers as an alternative to a traditional college education for students who had completed Class 12 or a diploma course. The programme runs for two years, including a one-year internship within Zoho’s product teams, charges no tuition fees, and instead pays students a stipend throughout the programme.
By its 20th anniversary in April 2025, the programme had expanded to include a School of Technology, School of Design, School of Business, School of Graduate Studies, and School for Advanced Study, operating across campuses in Chennai and Tenkasi, with two additional campuses announced in Tharuvai and Kumbakonam. The programme receives approximately 20,000 applications annually and has produced over 2,000 graduates, who now make up more than 10% of Zoho’s total workforce. The core idea is that Zoho values demonstrated skill and on-the-job learning over formal academic credentials, and the programme functions as both a social mobility initiative and a talent pipeline for the company.
It is a mix of both, depending on the segment. At the government level, the shift is real and substantial: over 1.6 million central government employee email accounts have been migrated to Zoho’s platform following a formal tender and security audit process, and several senior ministers, including the IT Minister, have publicly stated they use Zoho’s productivity suite for official work. This represents genuine displaced usage of whatever platform was previously used for those government accounts.
At the small and medium business level, Zoho has been gradually gaining share for years due to its lower-cost, bundled Zoho One pricing, a trend that predates the 2025 attention and continues independently of it. At the large enterprise level, however, there is no clear evidence of major displacement of Microsoft 365 as of mid-2026. Large organisations have deep, multi-year investments in Microsoft’s ecosystem, including Teams, Azure, and Dynamics 365, and the switching costs involved in moving away from that ecosystem remain substantial. The September 2025 viral surge in Zoho’s Arattai messaging app, while real in terms of download numbers, also cooled significantly within weeks, illustrating that attention-driven spikes do not automatically convert into durable market share shifts.
Arattai, Zoho’s messaging and video calling app, had existed since its public launch in January 2021 with limited traction, recording fewer than 10,000 downloads in August 2025. In late September 2025, following endorsements from Union ministers promoting it as a Made in India alternative to WhatsApp, daily sign-ups rose from approximately 3,000 to 350,000 within three days, and founder Sridhar Vembu reported the app added over 2 million new users in a single day at its peak on October 1, 2025. The app briefly became the top-ranked social networking app on both the Apple App Store and Google Play Store in India, and crossed over 10 million downloads on the Play Store, equivalent to over one crore installations on Android.
However, by October 2025, Arattai had dropped out of the top app rankings as the initial curiosity-driven download wave did not fully convert into sustained daily active usage. Monthly active users remained above one million, a meaningful base for an app that had almost no presence a month earlier, but well below the peak download figures. Zoho subsequently added features such as enhanced security and end-to-end encryption in response to user feedback. The episode illustrates a common pattern for apps that experience sudden, externally driven attention: the long-term outcome depends on whether the product can retain users once the initial wave of curiosity passes, which for Arattai remains an ongoing process as of mid-2026.
In FY2025, Zoho’s operating revenue of Rs 12,313 crore was split across three broad categories. Zoho Suite, the company’s core business applications including CRM, Mail, Books, People, Projects, and the Workplace office suite, generated Rs 7,051 crore, or approximately 57% of the total. ManageEngine, Zoho’s enterprise IT management and cybersecurity division, generated Rs 4,863 crore, or approximately 39% of the total. The remaining category, which includes Arattai, Zoho Pay, the Ulaa browser, and other newer products, generated Rs 399 crore, up sharply from Rs 47.3 crore in FY2024, though it still represents only about 3% of total operating revenue.
Geographically, North America remained the largest market at approximately 41% of revenue, followed by Asia at approximately 30% and Europe at approximately 23%. This means that despite the domestic attention Zoho received in late 2025, the majority of its revenue continues to come from international markets, particularly North America, where ManageEngine’s enterprise IT customer base and Zoho Suite’s small business customer base are both well established.
Disclaimer: This article is for informational and educational purposes only and is current as of June 10, 2026. Financial figures are sourced from Zoho Corporation’s consolidated financial statements filed with the Registrar of Companies for FY2025. Information on the Tenkasi campus and Zoho Schools of Learning is drawn from Zoho’s own published announcements and an independent study by the Economix Consulting Group. Information on the September 2025 government adoption and Arattai surge is drawn from public statements made by government ministers and Zoho’s founder. This article does not constitute investment advice.
