Chennai-based software-as-a-service (SaaS) major Zoho is investing and betting big on manufacturing hardware devices like tech-enabled medical equipment, data centre-focused hardware devices and augmented reality (AR) equipment.
"In 10 years, I want to see Zoho as a wholistic technology company with both software and hardware integrated together along with a data centre, cloud and everything," Sridhar Vembu, co-founder and Chief Executive Officer (CEO) of Zoho told Moneycontrol, on the sidelines of the CIO Meet event conducted by Zoho and ManageEngine on Friday.
The firm also shipped medical devices in 2023, after being in the research phase for more than a decade.
"We already entered the medical devices market last year by acquiring a startup but now we have started shipping. This will be our initial foray into hardware manufacturing and we will expand from there," Vembu said.
In September 2021, Zoho invested close to $5 million in Voxelgrids, a Bengaluru-based startup, which builds Magnetic Resonance Imaging (MRI) scanners, for a 25 per cent stake. The company also invested around Rs 250 crore in five to six firms, including vTitan, a Chennai–based medtech company.
"In hardware, we are a very small player... This is the first year we have shipped medical equipment of around 300-400 devices. But we will be expanding in that phase, " Vembu said.
Zoho's plans to make data centre devices like servers to mainly cut internal costs, he said.
"We are also investing in making server technology devices because we spend a lot on our data centres. More than a market it will be very helpful within Zoho to save a lot of cost. And then we will market to other companies as well," He added.
While Vembu did not specify the investment in hardware, he added that the firm has deployed a team of 30-40 people working on the project presently.
The firm is also in the research phase to explore Field Programmable Gate Arrays (FPGA), which are basically integrated circuit devices used for making devices like semiconductor chips.
Building own Operating System (OS) for Zoho Laptops
Zoho launched its operating system for businesses, Zoho One, in 2017 and it provides a suite of 45 plus apps that help to manage every major business category, including sales, marketing, customer support, accounting and back-office operations.
The firm is planning to launch its own Zoho laptop with the OS developed in-house.
"Our aim is to become the top technology player in the world, Korea has a Samsung and we want to be that player in tech in India, " Vembu said.
Research and Development on AI and LLMs
The SaaS giant recently announced the launch of around 13 Generative AI Zoho application extensions and integrations, powered by ChatGPT. The firm is also blending third-party intelligence with Zia, Zoho's AI engine, which runs on Zoho's secure cloud.
In June 2023, Zoho said that the firm is also building its own large language model (LLM), similar to OpenAI's GPT and Google's PaLM 2 models. The project is being overseen by Vembu and is being worked on by the company's R&D team in India.
However, Vembu highlighted the present challenge of the availability of Graphics Processing Unit (GPU) manufacturing in the hands of a few players.
The GPU is a piece of hardware that is specially designed to handle image rendering for a display peripheral. Today, Nvidia and AMD are the two main players in the graphics card arena.
"Everything is now in the hands of one player which is NVIDIA, it is not only costly but it is also a high-margin and high-cost business. The margin in this business is around 80 percent. No one ever enjoyed this kind of margin, including intel. That is the problem right now, " Vembu said.
"In the longer term, we will see more companies coming on board. We are also working on more alternatives... In the next two-three years this will get resolved, " He added.
Vembu also said that more companies should get on board for setting up R&D on AI in India.
"Building LLMs are long-term projects... This means that a country should look at a $100 million investment just for GPUs. The amount is not that big for the industry but we will need strong R&D, privacy study and more players interested in this, " said Vembu.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
