Zoho Founder Sridhar Vembu Reveals Company-Wide Use of AI Coding Tools
Zoho’s customer growth exceeding 50% year-over-year demonstrates the company’s strategic momentum as founder Sridhar Vembu unveils his ambitious vision for AI-powered development. This remarkable growth comes precisely when competitors face mounting pressure from emerging AI platforms. Meanwhile, Vembu already observes AI delivering significant productivity gains for software engineers by automating preparatory and follow-up work, with potential for 10x improvements ahead.
The revelation emerges from a heated public debate with Y Combinator president Garry Tan over “vibe coding” – a controversial approach where non-technical teams create custom applications using AI tools. However, Vembu’s response reveals something much deeper: his personal R&D project focuses on combining compiler technology with AI to deliver quantum leaps in programmer productivity while maintaining security, privacy, and compliance standards.
Zoho AI Coding Tools Transform Development Landscape
Zoho Creator’s new AI assistant, CoCreator, facilitates faster app building using voice commands, written prompts, process flows, and business documents – all powered by Zia without requiring subscription add-ons. This comprehensive integration represents years of careful development rather than rushed market response.
The scope of Zoho AI coding tools extends far beyond simple code generation. AI Skills enable businesses to build applications with specialized capabilities that interpret natural language instructions, analyze business context, and coordinate complex action chains using specialized AI models. Furthermore, users can deploy custom AI models designed for context-specific requirements, including optical character recognition, predictive analysis, and object detection.
The platform’s Idea-to-App Generation service leverages ZohoAI or OpenAI to help users develop complete applications with contextual integrations, automations, permission sets, and dashboards using only text or voice input. This capability fundamentally changes how businesses approach software development timelines.
Massive Productivity Gains Drive Company Strategy
Vembu’s internal observations reveal striking productivity improvements. Currently, AI delivers 10-20% productivity gains depending on project nature, though not yet the revolutionary 10x or 100x improvements that could dramatically reshape employment. However, with better verification technologies, Vembu sees a clear pathway to 10x productivity improvements, though 100x gains may require fundamental breakthroughs over the next several years.
These gains become particularly significant when considering Zoho’s vast engineering operations. Zia has bridged the company’s full product suite since 2015, and Zoho’s complete technology stack ownership enables higher contextual AI integration than competitors, creating tools that understand data patterns and anticipate usage needs.
The company’s approach differs markedly from industry trends. While Vembu expresses enthusiasm for security analysis, pattern recognition, and programmer assistance through autonomous AI agents, he cautions these agents remain vastly overhyped and face challenges similar to self-driving cars.
Strategic Response to Market Pressures
Vembu’s emphasis on Zoho AI coding tools directly challenges the “vibe coding” movement advocated by major Silicon Valley figures. Without proper security, privacy, and compliance guarantees, vibe coding simply accumulates technical debt until systems collapse, creating unsustainable development practices.
Where are the vibe-coded alternatives to widely-used software categories like email, spreadsheets, accounting, or messaging applications, Vembu questions, while positioning Zoho’s AI development approach around security, privacy, and compliance requirements. This strategic positioning reflects deeper technical understanding rather than marketing rhetoric.
The timing proves crucial as corporate customers and analysts remain skeptical of AI promises, operating in “prove it to me” mode rather than embracing hyperbolic claims. Vembu’s measured approach acknowledges this reality while delivering tangible improvements.
Developer Experience Revolution
Zoho AI coding tools revolutionize how developers interact with complex systems. Code Generation and Optimization enables developers at various skill levels to use prompts for automatic generation of contextual code blocks tailored to application structures, while optimizing and annotating existing code for improved performance.
Advanced data cleansing and modeling capabilities allow users to quickly transform unstructured data from various file types and databases into structured applications, with AI-powered features designed to rectify inconsistencies and bring logical order to business data.
The integration extends throughout Zoho’s ecosystem. In CRM, teams can create reports and workflows using simple prompts, while Zia Agents guide users through next steps and generative AI creates content and suggestions, resulting in less clicking and more focus on deal progression.
Privacy-First AI Development Philosophy
Zoho’s AI models are not trained on consumer data and do not retain customer information, reflecting the company’s commitment to privacy-focused development. This approach differentiates Zoho from competitors who rely heavily on third-party AI services with less stringent data protection.
By positioning Zia LLM as a more privacy-conscious option and keeping customer data on Zoho’s servers across the US, India, and Europe, users access advanced AI capabilities without sending sensitive data to third-party clouds. This architectural decision supports long-term competitive advantages.
Zoho emphasizes balance between providing assistive AI technology for workers and maintaining affordability for consumers by avoiding unnecessary model complexity or additional costs. This philosophy guides product development decisions across the platform.
Market Position and Future Outlook
Vembu’s confidence in Zoho AI coding tools reflects deeper market understanding. Enterprise experience shows vibe coding rarely provides plug-and-play wins, as large organizations prefer ecosystems like Microsoft or Zoho for predictable service-level agreements, integrations, and lower long-term maintenance requirements.
Zia LLM and new agent tools are currently rolling out to early access customers, with full availability and pricing details expected by the end of 2025. This measured rollout allows for comprehensive testing and refinement based on real-world usage patterns.
Recent data shows AI code assistant usage among enterprise software engineers projected to surge from under 14% in early 2024 to 90% by 2028, while companies already build applications in days or weeks instead of months. Zoho positions itself at the forefront of this transformation.
Long-Term Industry Implications
Vembu’s warnings about software engineering employment carry weight given his track record. He regularly tells employees that software engineers’ higher salaries compared to mechanical engineers, civil engineers, chemists, or teachers represent no birthright and cannot be assumed permanent, emphasizing the need for continuous adaptation.
The productivity revolution coming to software development through LLMs and tooling could destroy many software jobs, requiring sobering but necessary internalization of this reality. This perspective influences Zoho’s development strategy and employee preparation programs.
International Monetary Fund estimates suggest 60% of jobs in advanced economies may face AI impact, with roughly half potentially benefiting from productivity gains while the remainder could experience reduced demand, wage compression, or obsolescence.
Implementation Across Business Functions
The integration of Zoho AI coding tools spans multiple business areas beyond traditional development. Support teams receive quiet boosts from Zia in Zoho Desk through guided conversations, auto-generated replies, sentiment monitoring in tickets, conversation summarization, and SLA tracking.
Ask Zia enables users to query data in plain language for automatic report and visualization generation, with predictive insights and design suggestions built in, allowing more team members to leverage data without complex dashboard knowledge. This democratization of data analysis significantly expands organizational capabilities.
Pre-trained AI agents integrate throughout Zoho’s business software, including updates to Ask Zia for data engineers and analysts, Customer Service Agents in Zoho Desk for ticket handling and triage, and Revenue Growth Specialists for identifying upselling and cross-selling opportunities.
Technical Architecture Advantages
Zoho maintains full ownership of its technology stack, providing more integrated and secure experiences compared to competitors while pursuing unique AI strategies for SaaS applications. This architectural control enables deeper optimization and customization.
Arattai’s messaging framework demonstrates this depth – built on 15 years of research with distributed frameworks enabling workload decentralization across servers and databases while providing fault tolerance, performance monitoring, and security through homegrown engineering frameworks.
To promote interoperability, Zoho adopts the Model Context Protocol (MCP) opening access to over 15 Zoho apps and workflows for external agents while respecting user-defined permissions, with Zoho Analytics and Zoho Flow integrated into the MCP ecosystem.
The comprehensive revelation of Zoho AI coding tools reflects Vembu’s calculated response to industry pressures while positioning the company for long-term competitive advantage. Rather than following trending approaches, Zoho builds foundational capabilities that address real business needs through privacy-conscious, productivity-focused development. This strategy may prove prescient as the AI landscape matures beyond initial hype cycles toward sustainable business value creation.
Frequently Asked Questions
What AI coding tools does Zoho use company-wide?
Zoho uses CoCreator (powered by Zia AI), custom AI models for OCR and prediction, AI Skills for natural language processing, and Code Generation tools integrated across their entire development platform.
How much productivity improvement does Sridhar Vembu report from AI coding?
Vembu reports current AI productivity gains of 10-20% depending on project nature, with potential for 10x improvements through better verification technologies, though 100x gains may require fundamental breakthroughs.
What makes Zoho’s AI approach different from competitors?
Zoho maintains full ownership of its technology stack, doesn’t train AI models on customer data, keeps data on their own servers across US/India/Europe, and focuses on privacy-first development with no additional subscription costs.
What is Sridhar Vembu’s position on “vibe coding”?
Vembu argues vibe coding accumulates technical debt without proper security, privacy, and compliance guarantees, questioning where successful vibe-coded alternatives exist for essential software categories like email or accounting.
How does Zoho integrate AI across different business functions?
Zoho integrates AI through Zia across CRM (automated reports/workflows), Desk (guided conversations/sentiment monitoring), Analytics (plain language data queries), and Mail (smart composition/filtering).
What are Zoho’s plans for AI development in 2025?
Zoho plans to scale Zia LLM model sizes, expand speech-to-text languages, introduce reasoning language models, add Finance and Customer Support skills to Ask Zia, and implement Agent2Agent protocol for collaborative AI agents.
What does Vembu predict about the future of software engineering jobs?
Vembu warns that the productivity revolution from LLMs and tooling could destroy many software jobs, cautioning engineers not to take high salaries for granted as AI capabilities continue advancing rapidly.
