Zoho's Strategic Focus on Indigenous AI: Shailesh Davey Shares Vision for the Future

 

Zoho's Strategic Focus on Indigenous AI: Shailesh Davey Shares Vision for the Future

In a recent interview with IndyaStory, Shailesh Davey, the new CEO of Zoho Corp, discussed the company’s evolving AI strategy and the significant investments it’s making into building homegrown AI solutions. His insights provide a roadmap for how Zoho plans to navigate the rapidly changing landscape of artificial intelligence, with a particular focus on foundational models and AI-driven automation.

Shifting Focus to AI and Foundational Models

AI has become the new frontier in the tech industry, with companies scrambling to harness its potential. For Zoho, the focus is not just on adopting AI, but on creating its own AI models that are tailored to the unique needs of its customer base. Davey emphasized that building AI solutions is much like conducting experiments—some will succeed, and others will not. This approach has been integral to Zoho's strategy, and it’s evident in their ongoing efforts to launch two foundational models by the end of 2025.

For Zoho, which has already adapted to technological changes multiple times over the past two decades—such as pivoting from a network management platform to a CRM solution—the transition to AI-driven solutions is seen as another natural evolution. Davey also touched on the importance of having a stable leadership team, many of whom have worked together for over 20 years, which provides a strong foundation for making bold, transformative decisions.

The Role of AI Agents and Technological Developments

When asked about the company’s plans for AI agents, Davey acknowledged the excitement around reasoning engines and the ability of large language models (LLMs) to explain their decision-making process. He pointed out that the technology is still in its infancy, but Zoho’s experience with object-oriented principles places it in a good position to build AI systems that are highly relevant for enterprise use. Davey hinted that the company’s AI agents would be designed with these principles in mind, ensuring they can deliver value in complex business environments.

India’s Growing Role in AI and Zoho’s $20 Million Investment

One of the most intriguing parts of the interview was Davey’s thoughts on India’s position in the AI landscape. He believes that India’s AI ecosystem is still in its early stages but that it has the potential to follow a trajectory similar to that of relational databases in the past. Just as databases like Oracle and MySQL became ubiquitous over time, foundational AI models may one day be standardized across the world, with every nation developing its own set of models to address local needs and concerns.

Zoho has already committed $20 million over the last two years to AI development, with a focus on training a 3-13 billion parameter model. Davey was clear that the primary limitation is not financial but rather the pace at which the company is learning about AI technologies. As Zoho continues to refine its understanding and implementation, it plans to scale its investments and develop expertise in this rapidly evolving space.

Overcoming Data and Compute Constraints

A significant challenge Zoho faces in AI development is the resource constraints imposed by limited data and compute power, especially for languages and regions where training data is sparse. Davey mentioned that Zoho is working on solutions that would allow them to build efficient AI models even in these resource-constrained environments. This focus on right-sizing models and aligning them with specific customer use cases highlights Zoho’s product management-driven approach to AI development.

AI’s Role in IT Security and the Growth of ManageEngine

Zoho’s IT management arm, ManageEngine, is also benefiting from AI, particularly in the area of IT security. According to Davey, AI’s ability to sift through large volumes of data and identify anomalies makes it invaluable in cybersecurity. As security generates enormous amounts of data, AI can help pinpoint critical issues faster, making it a key driver of growth for ManageEngine, which is expected to hit $1 billion in revenue soon.

Embracing Change: Zoho’s Approach to the AI Revolution

As AI continues to reshape the software industry, Davey stressed that companies must remain adaptable. For Zoho, this means not just reacting to change but also anticipating and driving it. Drawing on its history of successful pivots, such as the shift from network management to cloud solutions, Zoho plans to stay agile in the face of the AI revolution.

Despite the rapid rise of AI, Davey believes traditional SaaS models aren’t necessarily dying, but rather evolving. Zoho’s engineering-driven culture and its ability to embrace change position the company to stay relevant as the landscape continues to transform. Zoho's proactive approach to AI ensures that it will remain at the forefront of innovation in the years to come.

Conclusion

Shailesh Davey’s vision for Zoho is clear: invest in the development of indigenous AI solutions that can serve both global and local needs. With a focus on foundational models, AI-driven automation, and right-sized enterprise solutions, Zoho is positioning itself as a key player in the rapidly changing AI ecosystem. As the company continues to innovate and adapt, it’s clear that Zoho is ready to meet the challenges of the future head-on.