Going global, being local - Zoho's European Chief on buyers, business and Brexit
- A work-in-progress, but Zoho's European ambitions are taking place.
Zoho’s Zoholics gathering in London offered up a first for me - the first time I’ve been at a conference and the moderator has explicitly asked the audience for verbal GDPR consent for photographs to be taken and shared.
But then privacy is a big deal for Zoho which stakes a claim to trying to keep ahead of regulation rather than waiting for it to be enforced - and to do this on a global level playing field. That’s something that ought to be a requirement for buyers to tick off the list in 2019, even if some countries - yup, that’s you we’re looking at, USA - haven’t had the memo.
Sridhar Iyengar, Zoho’s Head of Europe, argues that people in Europe take privacy very seriously so regulation grew out there first, but he does see other nations, including Zoho’s country of origin, India, modelling their own approaches to data protection on GDPR:
The Indian data protection laws have taken a lot of good things from GDPR. It makes sense, reusing what is good stuff already, So what that means is if you are compliant with GDPR anyway, then you can be compliant in other countries. Our own thinking about how we regard data privacy and customer data. Our business model has always been to sell software and charge for it and then grow by that means. So there is no advertising and there's no monetization of customer data. The customer data sits in the software that's used by the customer. They own the data. We do not. So if they sign out, they delete the software, the data has gone forever.
He’s less certain when asked if he expects the much-debated ‘GDPR-US’ will come to pass, but argues that Zoho US customers are already ticking the privacy boxes:
What we've done is ensure that the GDPR guidelines that we follow and are compliant with are applicable in all our data centers. What we're saying is if all of our data centers are compliant to the same extent and irrespective of where you are, if you're in our data center, you're automatically compliant. So then we don't have to think about all the customers and we don't have to play the 'if's or else' policies. We just apply the most stringent one and we're automatically making it easy for users to be compliant.
Iyengar is on the frontline of Zoho’s European expansion, with the firm opening up a regional HQ in Utrecht, as well as offices in the UK and France. The reasons for going with the Netherlands as a European jumping-off point are pragmatic - and, he hastens to emphasize, nothing to do with Brexit! Rather it’s about ease of use:
From a geographical standpoint of being accessible to various markets, be it the UK or Western Europe or Eastern Europe, it's very strategically conveniently located. You can connect with the Nordics or southern Europe. The second thing is, and not that it mattered, but also it has a huge English speaking population and then we don't have a problem with English. Of course that's a secondary consideration, not a primary concern. We've set up in Utrecht. There are two reasons for that. One is it's of course a quieter place than Amsterdam, with all the tourists and the pot culture. It's also got a very good university, Utrecht University, that we hope to tap into. It's also centrally located in the Netherlands. It has the biggest train network in the Netherlands, connecting with Germany, France, all of that. Of course UK is not too far. away,
Geographically not far at any rate, but with the continuing chaos around Brexit, it might feel like the UK is some distance away from the rest of Europe. Iyengar says however that he’s not seeing any ‘Brexit pushback’ from buyers:
At the end of the day, businesses do need software tools and the mechanisms to run efficiently. In situations like Brexit, everyone is looking at tools that make them efficient, but are also affordable, easier to use. So what we've noticed, in times of crisis, people look at individual ways to find better solutions that then can do the job better. So we haven't really faced a problem due to Brexit. Brexit is something that's on people's minds, but not necessarily for the business software and the skills that they use. Larger customers ask us questions on, you know, what do the impact that you have on Zoho and Zoho applications. But we have to comply to whatever decision is made. So we just tell them that we will be compliant to whatever decisions are made. So from our standpoint, people are focused on efficient ways to run their businesses and they're looking at tools and products.
That said, there could be complications ahead. Zoho has two in-region data centers - one in Utrecht, one in Dublin. If the UK crashes out of the European Union without reaching a data adequacy agreement with Brussels, there might be some tricky data transfer questions to answer, especially if you pride yourself on your data privacy and protection standards. It’s a scenario Iyengar acknowledges, but with without alarm:
The impact of that is that you would need to have a data center in the UK. We are hoping that it wouldn't come to that, but if it did, then opportunistically we would set up data centers in a different location. There's never been a problem because we expand our data centers across the world. We set one up in India recently, one in Australia, New Zealand is coming up. So we are used to looking at different geographies to set up data centers to serve our customers better. So if the need comes up, we can set up very quickly.
That’s an important claim to be able to make as Zoho is now in pretty aggressive International expansion mode after a long period of focus on the US. Iyengar explains:
The US was our first market, the biggest market. For a lot of software vendor, that's typically the first order of problem to solve and then when you're successful that you look at other markets…having said that, we were doing very little in other regions and that was the reason a lot of growth was focused in the stage one, all the growth was attributed primarily the US. All the other regions were being served digitally. So we are now in stage two, where we are expanding geographically because the markets are ready and the products are ready.
The way we are going about these regional expansions is of course the leadership is from India - I moved from India to Holland - but then we're hiring folks locally. So the team in France is basically all people locally, or in Netherlands. So it's a local team, but with a strong connection to the mothership, having leaders or mentors who know how the company operates, who know the products, who know the mindset of users and all that. Otherwise it's going to be remote offices with no connection. Sometimes it takes some kind of customized capability to serve the local market. That's why we are expanding globally, setting up offices to be closer to our markets and to serve our customers better. That's really why we set up the European office last year.
A lot of value is added when you're closer to the market. You understand the pains and you're listening to customers first hand and that makes you understand the market better….If you are in Europe and we have employees who can speak French or German or Dutch, you can always look at it the way a Dutch user or a French user would look at it and see if it makes sense. And the product's been vetted by a person who understands the local language to make sure that it's a product that the customer needs.
One mistake that’s been made by US vendors in the past has been to regard the EU as ‘Europe’ with one culture. Zoho’s Indian origins have been useful here, suggests Iyengar:
We seen the diversity within India, when you go from north to south or east to west. We tend to see Europe in the same way. There's a lot of diversity. What works in France won't work in Germany or in the UK. So you have to do things which are specific to the country. A lot of that also ties into the product strategy, which means that if you're offering a finance product has to be compliant with local laws, financial regulations before you can launch it in the local market. That understanding is possible only when you're in Europe and you're connecting with customers, you are understanding the local laws and legislation and you can translate that to the products.
Another challenge is to get on more buyers radars in Europe and that’s on the to-do list, says Iyengar:
Of course awareness of our company is much higher in the US and India than it is in Europe. A lot of people who find us do so because they have a need and they go on the web to research new products. That's the new consumer and they find us because we are very highly optimized for visibility on Google or other digital channels. What you want to do is augment that with other ways so that people know about us and what our products can do for them. In terms of that, I would say it's early days. There's still a lot of people who don't know us and that's why we have an office here to change the perception.
The Zoholics gathering in London was one where delegates attending were in learning and sharing mode. In a sector where user conferences now take over entire cities, there was an intimacy about the event that suited where Zoho is in terms of its expansion into Europe. Other cities around the EU are playing host to similar events over the coming weeks, part of the brand-raising work that Iyengar refers to. Zoho in Europe is undoubtedly a work-in-progress, but once upon a time so was the likes of Salesforce. And anyone leaving the City of London venue housing the Zoholics gathering need only to have looked to their right and way up into the sky to see how that’s ended up…