The Grill: Sridhar Vembu

This cloud pioneer debunks the myths of traditional education.

Sridhar Vembu, the 41-year-old CEO of Zoho, an upstart maker of online applications, is an accidental software entrepreneur. After getting a doctoral degree from Princeton University, he went to work at Qualcomm when it was just a start-up. He says he would have stayed there but was drawn instead to the nascent Indian software business, and in 1996 he formed a company called AdventNet with two of his brothers and three friends. The company eventually built an IT management tool, Manage Engine, which remains its most profitable offering. But the company has become known for a broad suite of cloud applications called Zoho, and last year it adopted Zoho as its corporate name.

Author and philosopher Friedrich Hayek isn't your typical inspiration for technology entrepreneurs. I read The Road to Serfdom right after college. It taught me how to have a light touch as a manager. It also taught me how to respect people's individual differences. People think of companies as command-and-control, and Hayek saw that command-control breaks down rather quickly. We know from practice that the person who is actually doing the job has the best information. So you have to give them considerable autonomy.

You say you wouldn't get a Ph.D. if you had it to do again. Why's that? When I came to the U.S., my goal was to be a professor. But during the course of my [studies], I got turned off by the way the academic world works.

There is a certain level of abstraction for its own sake, and even in engineering it's become true. The field is highly mathematical, almost to the point where the math has become a kind of Sanskrit -- a tool to keep out people. Most of engineering is actually fairly common-sense and you can figure it out with the brain and hard work. Math is essential, but we've gone too far in that direction. It's become a kind of tool to show off.

Sanskrit was primarily the language of the priests. The IT world certainly has its own special languages and air-conditioned computer shrines. I don't see it that way. There is always a tendency to create a priesthood and exclude other people. But the IT world is the most open industry today, anywhere. Just to give a comparison: Biotech, medicine -- anything related to health care -- have all manner of priesthoods and guilds to keep people out.

Zoho's mostly a small-business tool. What's your experience in large enterprises? We face the same problems that large enterprises face. We have now about 1,200 employees, across three continents. It's become a fairly complex operation, far more than what I'd ever thought in the beginning. The Zoho suite is fully used inside, and we find substantial cost savings and productivity gains by using this.

We do have some big-company engagements. What we've seen so far is no big company is willing to throw out what they have and replace it with the cloud. Cloud computing is, to some extent, marketing, but there is something real going on here. The cost savings are real and tangible, and productivity gain is tangible. I believe the transformation to the cloud will happen over the next five or six years.

How does IT need to prepare for the cloud? We have built software that runs in people's data centers and built closed software. Now, we tend to break up software into little components because that scales better -- in our spreadsheet, our macro functionality is a distinct subsystem. It does nothing but process macros. That's very different from the way you conventionally build software.

Then there's the business model disruption. Revenue models are very different. Traditionally, I came and sold you a huge package, and you spent a lot of capital and consulting dollars upfront and hoped and prayed it all worked out. In this model, the vendor assumes the risk.

Microsoft says it will be able to make the shift to the cloud. I don't necessarily disagree with that. Microsoft is never to be underestimated. But cloud computing is part and parcel of the broader phenomenon of the Web, and it's much more open. Microsoft's traditional boon was control of the stack. In this more open world, it's unclear how they are going to play.

You have your own university. Yes, Zoho University. We didn't see a lot of correlation with grades and job performance. So why go to colleges at all? Why not [recruit at] high schools? Look at Gates, Dell, Ellison, Jobs, Zuckerberg -- they basically created the industry as it stands today. None of them actually finished college. Look at really good engineers: Some come from MIT and Stanford, and then there are people who had a couple years at community college. I really respect Google, but here I'm kind of un-Google. They believe in credentials, GPA, take this course. We don't.

Should IT departments try this? I really believe so. [Zoho University] is highly intensive training. [Attendees] spend eight to nine hours a day learning and experimenting. They mingle with people older than them, 23-, 24-, 25-year-olds, people over 30. Those values transmit to them.

Managing a bunch of college-age kids sounds like a nightmare. People complain that kids come out of college and don't have the right background, and I say they haven't really been challenged. A lot of education today takes a kid who's 18, 19 years old and asks them to focus on something really boring. [They're] not treated as the responsible young adults that they are. So they stay as kids and fulfill our expectations.

Fitzgerald is a freelance writer based outside of Boston.

Copyright © 2010 IDG Communications, Inc.

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