“ManageEngine contributes more than 50% to Zoho’s revenue”

Sridhar Iyengar, VP, ManageEngine

Dataquest had a chance to interact with Sridhar Iyengar, Vice President, ManageEngine which is part of the Zoho Corp. This interaction was done quite  a while back. However, Sridhar Iyengar’s response to some of the important questions makes this interaction really fruitful to the readers. Excerpts:

Can you please explain what ManageEngine is?

For ManageEngine, the target customers were anyone who has IT within their organization, has IT team and proactively manage it. We also realized as IT was picking up, most of the businesses’ core function will depend on IT. We started building tools for Network monitoring, application monitoring.For instance, in net banking, someone has to ensure that the website is always up and running and is very responsive, else the bank will lose the business. We have similar products for Help Desk software, Bandwidth Management and Password Management and Active Directory. We have close to 25-30 different products. Our focus then was the SMB market. Since we started out, our philosophy has been to put out the best products and let the customers come in, rather than sending a sales guy and ask him to sell the product and get customers. We took this different approach to Enterprise IT management. All our products are available on our website for free trail, they can try it out for 30 days, satisfy themselves and then buy it (now every vendor does this but we started it in 2002). Our customers find us, download the product and then they would come to the sales team to say that they want to buy it.

Initially, we were called AdventNet.

In 2005, we were sensing the emergence of Cloud and then decided to get into Software-as-a-Service. When we were looking at markets, one of the lucrative ones was Online Office, which is what you now see as Zoho.com. By 2009, Zoho.com, which was all about Business Applications, became so popular that we renamed the parent company as Zoho Corporation (from AdventNet). This name was far more attractive and easy to pronounce. However, all the 3 divisions remain completely independent.

We have over 90,000 organizations using ManageEngine products worldwide. In India we have about 8,000-10,000 customers. After SMBs, we started seeing a lot of interest from Mid-sized and Govt. agencies, for example, NASA uses our products. 3 out of every 5 Fortune 500 companies is our customer.

How does ManageEngine diversify? From Cloud to Big Data to IoT, how does ManageEngine find customer requirements change and how has ManageEngine evolved over the years?

The Telecom market was small compared to Enterprise IT management. In Enterprise IT, the change in technology trend was much faster. Same with Zoho.com, where consumer/end-user base was larger. The evolution from WebNMS to ManageEngine to Zoho.com happened because we have been watching these trends. Since all these 3 divisions are with us, we have developed expertise like Cloud technology, while running our own Data Center. Zoho.com today serves over 10 million users where all the data is stored in our own Data Center. We use our own tools

(ManageEngine’s) to manage the Data Center. We brought our Cloud expertise to ManageEngine and build products in the SaaS model. Second thing is when trends such as BYOD come in, we realized that we had a product which did Desktop Management. We then introduced MDM (Mobile device management).

Similarly, on the Zoho side, we experimented with Social network – now available as Zoho Connect. We brought this into ManageEngine, where Social IT is offered to IT teams and they can collaboratively find solutions to IT problem.

What trends do you see with Zoho Connect? Are users more excited about these kinds of products or they just become part of their overall Enterprise network for being in touch constantly?

Zoho Connect is still relatively new. It is finding use among small groups/teams. Zoho internally also uses it. Zoho Corp is the test bed for all our products from ManageEngine or Zoho.com. So wherever there is a need to collaborate and requires quick turn-around, a social platform like this helps.

What is the revenue from ManageEngine?

ManageEngine contributes a significant part, more than 50% to the overall revenue. It is the largest for Zoho now.  Since we are privately held, I will not be able to reveal the numbers.

Out of these 90,000 customers, which are the biggest verticals who uses ManageEngine products, and what are the markets that contribute most to you?

BFSI is the largest vertical because they have the most to lose if IT goes down. They are extremely dependent on IT. For e.g. let’s take education, education is also a vertical that significantly contributes to us. We have education universities who are using our tools but the impact of something going wrong and to be rectified will cause a BFSI organization much more than someone from the education sector. BFSI, pharma is another sector where we have seen a lot of customer base, retail and government agencies are some of the predominant vertices.

Who are your Partners in India? 

In India there are a lot of SIs who take our products like IBM, TCS, Infosys, etc. All of them expertise in delivering solutions and they would take products from us and embedded into their overall solutions.

What is the attrition you are witnessing from the Indian market?

Indian market attrition is mainly from SIs and SMBs. Adoption levels have increased over the last 5 years because I think it also has to do with the importance that IT place within an organization. For e.g. 10 years back people will be very hesitant to pay. People will look for Open Source software but today the question is support for open source?

Churn rate can be very high in an IT organization,especially in India. I see overseas guys stay for a longer time in IT organization, but in India within one or two years there is a lot of stern jobs. Some of our customers approach us for recommendation to replace the people who have left the organization.

How do you see the R&D space doing in India? What are the opportunities and challenges faced?

The word R&D has been coined in such a way that it is done in a controlled manner. The idea is to be more creative and innovative. You can’t do it in a controlled way. You can’t say that I’m going to get an idea for one product tomorrow. You need to have a set of experimentation with zero expectation. You can’t say that I have so many people working on this product and this much revenue I will get out of it. In this case, it may or may not work. In R&D if people are going to put some timeline and have certain expectation from it like ROI it won’t help.