Tuesday, July 23, 2024

Global economy taking a turn for worse, caution ahead: Zoho’s Sridhar Vembu

Sridhar Vembu, Co-founder and CEO of software-as-a-service (SaaS) company Zoho, warned on Monday that the global economy is likely taking a turn for the worse, urging companies to exercise caution.

In a post on X (formerly Twitter), Vembu said that Zoho has seen a slow down in growth across geographies in September.

“We saw a fairly pronounced slow down in growth in September across countries and across products,” he posted.

Vembu said that given the geographically and product-wise diversified nature of our revenue streams, “I suspect the global economy is taking a turn for the worse”.

“Caution ahead,” he added.

As IT companies gear up for the July-September period earnings, brokerage firm Nomura has predicted continued weakness in demand, saying sustained macro uncertainty will adversely impact their financials.

“We believe the void created by the lower number of small-sized and discretionary projects along with delays in client decision-making and ramp-up of won projects in certain cases will lead to both revenue and margin disappointments in the near term, given the ‘sticky’ nature of costs,” the firm said in its latest report.

Last month, Zoho surpassed 100 million users across its more than 55 business applications.

The growth came on the heels of the company reaching $1 billion in annual revenue last year.

Zoho said it has increased its traction from 1 million users in 2008 to 100 million 15 years later — with the last 50 million users added within the past five years.

“This is an impressive milestone for any organisation, but it’s particularly sweet for us as a bootstrapped company that has never raised external capital. And we are not done yet,” according to Vembu.

Zoho has more than 700,000 businesses across more than 150 countries. Headquartered in Chennai, Zoho is privately held and profitable with more than 15,000 employees.

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