India's Software Industry Faces Structural Shift: Sridhar Vembu's Warning

Sridhar Vembu, former CEO of Zoho, has warned of a fundamental shift in India's software and IT services, driven by inefficiencies and not merely cyclical downturns or AI threats. He emphasizes rethinking industry strategies to navigate the structural changes reshaping its future.

Sridhar Vembu, co-founder of Zoho, has raised alarms about India's software and IT services sector, suggesting a looming fundamental transformation beyond just cyclic downturns or AI impacts. According to Vembu, this is the beginning of a structural shift destined to redefine the future over the coming decades.

In a recent social media update, Vembu criticized widespread inefficiencies that have long plagued the global software industry, noting how these inefficiencies have led to a prolonged asset bubble. Having stepped down as CEO to focus on research and development, Vembu warns that India, a major player in software exports, has adapted to these inefficiencies with millions of jobs depending on the sector's growth.

Analysts are increasingly concerned about the sector's future, with AI and automation posing disruptions to traditional business models. Vembu argues that AI-related changes and trade uncertainties are just part of the problem. The industry must address accumulated inefficiencies to prepare for an inevitable transformation.

(With inputs from agencies.)