ManageEngine, a provider of IT management solutions and part of Zoho, has opened two new data centres in Europe.
The facilities are located in Amsterdam and Dublin, and adhere to the data privacy and security standards of the European Union.
In an exclusive interview with em360tech.com, Rajesh Ganesan, director of product management at Zoho, says the EU location is likely to suit customers who prefer to keep their data as local as possible.
“Our European customers were directly telling us that as long as we had our data centres in the US, it would make life hard for them,” says Ganesan.
EU companies are subject to some of the world’s strictest data privacy regulations, which apply to both on-premises and cloud applications, he says.
Moreover, new EU laws require European companies to store their data in Europe only, partly because of the wide-ranging powers given to the National Security Agency by the US government.
“Because of new initiatives such as the US-EU Privacy Shield and other measures, things have been changing quite a bit for data being hosted in the US for EU customers. So we took the decision to invest in our own data centres in Europe.”
ManageEngine’s main data centre is the one “built from scratch” by the company in Amsterdam, with the Dublin facility operating as a disaster recovery and backup resource.
“The data centres we have now in Amsterdam and Dublin… we just hired the location, which provides good physical security, and insures power. Otherwise, we completely build and run our data centres ourselves. This is case in the US too.
“We architect with an operating system we have customised and built out of Linux, we build everything from scratch, and we have done the same with the EU data centres.
“We did not choose to go with AWS or Azure because the changes in terms of service when it comes to relying on third-party providers has come to bite us hard.”
The reason for choosing Amsterdam, says Ganesan, was partly because of Britain’s planned exit from the EU, or Brexit. “Last year we had this confusion of Brexit, so economically, politically, there was no clarity for foreign companies like ours to really look at the UK as an option.
“We also had to look at various things like how cost-effective the space was, the power and cooling technologies available, the tax options, and also because we’re based in Chennai, India, we had to choose somewhere that was as close as possible to our base.”
Zoho employs approximately 5,000 people, mainly at its location in India, with offices in the US and now Europe. Still privately held, the company’s financials are not made public, although it must have some money, judging by the $10 million it spent acquiring five companies recently.
The company has been on an impressive growth curve since it was established in 1996, as AdventNet, which provided network management tools.
The launch of its Zoho suite of applications, which is still growing, saw the company grow even faster, partly as a result of what was at the time an innovative business model – entirely cloud-based applications which did not need an army of consultants to install and run by users.
As a result of its success with Zoho apps, AdventNet changed its name to Zoho in 2009, by which time it had more than 1 million users.
Today, Zoho claims to have 25 million users, and ManageEngine is said to be used by more than 120,000 IT teams worldwide, including “three out of every five Fortune 500 companies”, according to the company.
The success of the company has led to a point where it is looking to grow to be a challenger to the market leaders, the giants of the space.
Digital business is a complex software market and like-for-like comparisons are not always straightforward. But if we look at the area of customer relations management software, the top five are Salesforce, Microsoft Dynamics, Oracle, SAP, and SaleLogix.
That’s according to CRM Switch, which surveyed 750 employees from different companies in the US. The study found that Zoho was well within the top 10.
“I’ve been with this company for 20 years now,” says Ganesan. “When I joined, I was number eight – today we are more than 4,000.
“When you ask how can we compete with the ‘big four’, we have this very firm conviction that enterprise software does not have to be so complex, and these companies intentionally make enterprise software complex.
“When I say complex, I mean it’s technically complex, the business model is complex, the operation… everything is complex and inefficient. That is our firm conviction.
“This is the first thing that we challenge. This does not have to be complex. We basically build an executable for Windows and Linux and put it online on our website for anybody to download.
“People download, see it working, and only then do they come to us, asking for more information, for example, where to buy the software.”
That’s how Zoho innovated the market in 2003, he says. The business model was very simple and effective. “It did not have any indirect pricing, or differential pricing – we had one price which we put out on the web, which is what our customers paid. Nothing hidden – no hidden costs, and no consulting costs. Any and all costs are mentioned clearly.”
ManageEngine also operated on the same business model, says Ganesan, adding that one of the company’s aims is to produce apps that can be downloaded and used within a matter of minutes and hours.
And part of the secret of its success is the proportion of its resources it invests in research and development. “We never sought external funding, we never over-marketed, we just said, ‘This is our software, try if you like, use, and then pay’.
“Word of mouth really, really worked for us, particularly with ManageEngine.”