Israel-Hamas war adds new uncertainties to prevailing global challenges: Zoho Founder Vembu

Bengaluru: The Israel-Hamas war has compounded the prevailing global challenges, adding a "new level of uncertainty", tech firm Zoho's CEO and Co-founder Sridhar Vembu said on Monday, as he urged companies to now focus on business fundamentals and financial prudence more than ever.

In a free-wheeling interview with PTI, Vembu talked about being bullish on the India market, his optimism on power of AI, and added that government is doing a "careful balancing act" in nurturing tech innovation while putting guardrails for privacy and security.

Vembu said he has no plans to enter politics. The prominent social entrepreneur said he will continue his grassroot work with rural youth and communities without worrying about critics.

Vembu said he is optimistic about India and the country has indeed been a "bright spot", but added in the same breath that the interconnected nature of the global economy does cast a shadow.

Businesses in this challenged environment will need to focus on fundamentals, and avoid debt, he said advocating that financial prudence "can save the day in a downturn" and has become important now more than ever.

The top boss of Zoho further said challenges such as debt buildup arising out of financial crisis and the Russia-Ukraine war have posed a challenge for the industry, and the Israel-Hamas conflict now has added a new dimension to the already challenged environment globally.

"The global backdrop has got significantly more challenging even before all this...and now this adds a new level of uncertainty," he said. The Chennai-based SaaS unicorn has seen significant deceleration in the growth rate, although the growth itself continues.

"India has been a very bright spot for us. But because we are all globally connected, it (an impact) is inevitable...because of oil prices, and now there's all that uncertainty ahead," he explained.

He advised businesses to focus on fundamentals, prioritise customers, and avoid debt.

"Financial prudence is what saves the day in a downturn. I think it becomes more important now, than ever," he said.

Earlier, speaking at a briefing here, Vembu said India will be the top market for Zoho in coming 10 years, as he cited the strength of the country's demographics, growth rates, and projections.

India is the third largest market for Zoho, and the fastest growing.

Zoho is at a revenue of about USD 1.2 billion and "aspires to cross USD 10 billion, perhaps even USD 20 billion in ten years", he said.

The company is growing at a good rate, although the growth rates per se have come down, because of global headwinds. He emphasised that Zoho is well positioned in the market as customers seek deep value particularly when faced with tough economic scenarios.

"That's why I am optimistic about Zoho and also optimistic about India. But we still have to navigate these current challenges," he said citing the macroeconomic and geopolitical environment.

Vembu said Zoho is investing heavily in AI capabilities.

Asked about Sam Altman's (OpenAI) statement from earlier this year that it was “hopeless” for a young team from India with limited resources to build a foundational artificial intelligence model similar to OpenAI, Vembu said he disagreed with that view.

"It can be done, and we will do it. It may take time. And we, as a private company have the luxury of time, and patience," Vembu said.

Vembu said while he understood Altman saying it won't be easy for India to create something like ChatGPT, he completely disagreed that it cannot be done. Vembu said he is an optimist when it comes to power of AI, and added that the technology will be used for many good purposes.

"Obviously, it will also be put to some bad purposes....people, for example, launching fake videos, morphing stuff all of that...but overtime it will sort itself out where the legal protections and all will come in," he said.

AI is neutral, and like any technology it is about how people tend to use it. Government is doing a careful balancing act, nurturing innovation and putting guardrails so privacy and security safeguards are in place, he said referring to digital regulations being put in place.

Vembu said he has no plans to enter politics and emphasised that he is focused on rural development and grassroot social work with communities.

"I don't have any plans for politics right now. I am focused on rural development, social work on the ground... particularly because in rural areas, I see communities that definitely need investment. That sometimes attracts criticism, but I don't worry about critics," Vembu said adding he is focused on doing social good.