Zoho is the face of India’s swadeshi tech push, but concerns remain

On September 22, Union IT Minister Ashwini Vaishnaw posted on X, “I am moving to Zoho — our own swadeshi platform for documents, spreadsheets and presentations.” Praising the software, he said, “This is phenomenal. I am so impressed with the capabilities of Zoho.”Two days later, Union Education Minister Dharmendra Pradhan joined in, urging users to switch to homegrown apps for staying connected with friends and family. His post endorsed Arattai, Zoho’s messaging app which offers functionality similar to WhatsApp, calling it “free, easy-to-use, secure, safe and made in India”.The ripple effect was immediate. Daily sign-ups for Arattai increased dramatically and the app climbed to number one position in the social networking category. Sharing the scale of the upswing, Zoho’s CEO Sridhar Vembu said: “We have faced a 100x increase in Arattai traffic in three days — from 3,000 new sign-ups per day to 3,50,000. We are adding infrastructure on an emergency basis for another potential 100x peak surge.”He added that the company had planned a major release with new features by November but the growth came “suddenly”. “Please give us some time,” he appealed. “Our team is working flat out. Thank you for your patience and support. Jai Hind.”On October 3, Zoho announced that Arattai had crossed 7.5 million downloads across Google Play Store and Apple App Store. By the time Home Minister Amit Shah also moved to Zoho, much of corporate India had already jumped on the bandwagon, claiming support for the Chennai-based company which won India’s Web Browser Challenge, organised by the Ministry of Electronics and Information Technology (MeitY) in March.Swadeshi swingSuddenly, Zoho is everywhere — hailed as a symbol of India’s digital self-reliance. Its bootstrapped, rural-focused model aligns neatly with the Aatmanirbhar Bharat vision, positioning it as India’s answer to Silicon Valley and China’s tech giants. Core offerings of Zoho’s unified cloud software include comprehensive customer relationship management (CRM), finance, HR, project management, communication and collaboration. Its recently launched Arattai app has gained attention as a potential WhatsApp alternative.The response, however, has been mixed. For some, Zoho represents India’s coming of age in the global tech space. For others, the government’s visible endorsement of a private company raises concerns about data privacy, transparency, and competition.The business aspectAs the buzz around Zoho increases, Bhavuk Chawla, CEO of Mohali-based training and consulting firm DataCouch, recalls adopting Zoho products back in 2016 — drawn largely by its affordability at a time when he was building his business.“Zoho’s CRM and ERP (enterprise resource planning) solutions tools were far more cost-effective than the global heavyweights. We began with Zoho Invoice, which later became Zoho Books, and then expanded to other services the company offered. Compared to buying separate ‘best-of-breed’ tools, in India, Zoho One can work out to be two to four times cheaper overall — once you factor in licence, integration, and maintenance costs. By contrast, enterprise suites like SAP, Salesforce, or Workday can be five to 10 times more expensive over a five-to-10-year period.”Chawla has also experimented with Arattai, though he admits it’s still evolving. “It is promising and offers practical features like video meetings, live location sharing and storing documents in a 'pocket' but there are a few gaps too. It lacks features like communities, broadcast lists, disappearing messages, etc,” he observes.Question of qualityAs a cybercrime investigator who faces a lot of issues with the intermediaries, data privacy consultant Ritesh Bhatia believes the push for indigenous platforms is understandable — but also potentially risky.“It’s very good to have homegrown alternatives, given how the cyberspace is evolving globally. Often, it becomes very difficult for Indian enforcement agencies to take action against cybercriminals. Even when companies like Google or Twitter have nodal offices in India, these are still controlled by the US. But moving entire official data to one private entity, even with tight controls, remains questionable — almost like privatising the army,” says Bhatia.For a country that proudly claims to be the talent hub of the world, why is it that “none of our IITs or government agencies like NIC, C-DOT or C-DAC have developed an office suite that meets modern usability standards that can be safely used?” he asks.What people want, he stresses, is quality and reliability. “Take, for instance, the case of the UPI app, which has been a gamechanger. It got readily accepted due to its efficiency and ease of use,” adds Bhatia, founder of V4WEB Cybersecurity.Privacy mattersPrivacy concerns are being flagged by some users of the Arattai messaging app. Presently, only voice and video calls have end-to-end-encryption while the feature is missing in text messages, making it vulnerable to surveillance, data mining and theft from hackers.A post by a social media user has gone viral: “I asked the Zoho founder how private the pictures shared between a husband and wife are when using the Arattai chat app. His response: ‘Trust me, bro’.”The viral post came after Vembu had responded to his privacy concerns: “I said this clearly. Our entire SaaS (Software as a Service) business is based on the trust that we do not access customer data and we do not use it for selling stuff to them. End-to-end encryption is a technical feature and that is coming. Trust is far far more precious and we are earning that trust daily in the global market. We will continue to fulfil that trust of every user of our product everywhere.”Even as the tech giant’s CEO has tried to allay concerns, the shortcomings can deter privacy-conscious users.Past lessonsAttempts in India to develop indigenous apps haven’t always fared well. Koo tried to challenge Twitter, Hike Messenger aspired to be a desi WhatsApp, and Mitron failed to replace TikTok despite the Chinese version getting banned. Community app Kutumb, touted as India’s Facebook, had a decent growth in tier 2 and 3 cities initially, but struggled to retain users against global competition.Vipin Tyagi, former Executive Director of C-DOT (Centre for Development of Telematics), draws parallels from the experience of Samwad, a secure communication app launched during the Jat reservation protests in 2016. “Critical mass is essential for an application’s sustainability. We launched Samwad to provide reliable communication for the police after WhatsApp was shut down during the protest. While it addressed the issue very well then, the app didn’t gather much traction later. Due to lack of enough network, there was no motivation for people to start using a new application,” he says.“Public launch requires upfront investment in cloud capacity, management and upgrade of compute and network infrastructure. C-DOT invested in development of applications and was looking for corporates to adopt secure corporate communications. Most venture capitalists in India look for previous use success cases,” he adds.“Indian equivalents of say Facebook or Twitter fail to work because these may not serve the purpose of connecting globally. For instance, I am a person who wants to connect with more professionals globally. I have my account on LinkedIn. But I can’t force them to come on a particular platform,” says tech analyst Faisal Kawoosa.Changing marketKawoosa, co-founder of Techarc, sees Zoho as one of the rare Indian success stories. “Very few Indian tech companies have built credibility at scale. Zoho is one. There has not been any major product-based company which has specifically catered to India, except maybe Tally, which is very less talked about despite pioneering digital accounting. Another meaningful player on the hardware side has been Lava.”The problem, he points out, is that “as Indian consumers, we have realised it very late that we have to pay for software”.“Earlier, the mindset was that software should be free or pirated. That’s probably why whosoever had software-making capability thought that India is not a market and aimed to develop software for a global audience. However, once things got onto cloud, it became possible for vendors to price their software differently and offer variable pricing models. For consumers, too, it became difficult to go ahead with a pirated version because these are always connected online. So now, you have the intent of consumers and there’s willingness to pay for software,” says Kawoosa.Need for fair playTech expert Dinesh C Sharma questions the wisdom of the current approach. “Of course we want to promote Indian homegrown companies. But can we compromise on quality or features and give monopoly status to one Indian company in the name of swadeshi? That is the larger question we need to ask ourselves. It is one thing to say that we prefer Indian companies and Indian-made products, but asking people to go in for a particular one is different,” says Sharma, author of ‘The Outsourcer: The Story of India’s IT Revoultion’.The National Informatics Centre (NIC) has long provided government email and security solutions, and agencies like C-DAC and C-DOT continue to develop indigenous software, yet their adoption remains limited, he points out.“Government policy should be clear regarding promoting Indian companies. Start with government offices. And leave the private market open for competition. Let there be a fair-playing field,” Sharma adds.

Zoho is the face of India’s swadeshi tech push, but concerns remain

The Chennai-based firm has become the poster child of India’s swadeshi tech push, thanks to a string of endorsements by top ministers. But as its adoption grows, so do questions on privacy, quality & monopoly

Seema Sachdeva

Zoho is the face of India’s swadeshi tech push, but concerns remain

The Chennai-based firm has become the poster child of India’s swadeshi tech push, thanks to a string of endorsements by top ministers. But as its adoption grows, so do questions on privacy, quality & monopoly

Seema Sachdeva

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