Zoho founder Sridhar Vembu accuses India’s IT industry of creating financial bubbles: “Absorb all oxygen”

Over the past years, India’s IT industry has been the main growth driver of the country’s economy, with exports, innovation and employment increasing. But Zoho founder Sridhar Vembu has a different view of the booming industry, saying “absorb all the oxygen.”

In an article on X, Vembu alerts the “financial bubble”, which may absorb resources and reduce our functionality. He said that in the case of India, the IT industry has acted as a financial bubble for a long time.

Vembu uses an analogy of flash torrents, which can cause structural damage.

“I used an analogy, “Floods of Floods will destroy existing ponds and leave less water after the flood subsides.” This is structural damage caused by Floods,” he said.

He compared the mountain flood to the financial bubble, which could have a similar impact on an industry.

“Financial bubbles (floods) are similar, they can have long-distance effects. When money pours into an industry, it absorbs resources and makes us less capable than before, and in other key sectors, these key sectors are ignored in the process of money flooding,” he said.

IT Issues

The Zoho founder also cites Intel’s example, which is reportedly a joint venture with Taiwan Semiconductor Manufacturing Corporation (TSMC). This is due to Intel’s struggle with financial struggles, which reported its first net loss since 1986.

“There is one reason Intel needs the help of TSMC right now – for at least one generation now, the smartest talent in Silicon Valley has not entered the fab. No investors will touch the field because there are no large exits,” Vembu said.

Zoho’s founders believe that the longer the financial bubble lasts, the more harmful it is.

“That’s why the financial bubble is so devastated. The longer the bubble lasts, the more structural (and cultural) damage it causes to more sectors.”

Vembu said that as the Indian IT industry “absorbs all the oxygen”, we must make up for the wasted time.

“In India, the IT industry has absorbed all the oxygen for a long time, resulting in damage and neglect in many other key industries. We have to make up for the lost time,” he said.

Agree to social media

Vembu’s observations resonate with many people on social media platforms.

One person said: “Especially the current generation blindly jumps into CS courses or work in them, regardless of any major they choose among graduates/graduates is a mirror to this argument.

“Sir, I agree – the manufacturing industry, the cruel skills and the builder mentality is the talent that has risen from manufacturing, the cruel talent. The industry has suffered a profound structural blow – automatic strength, the network breaks down. Rebuilding will take decades of investment and the right mindset,” another added.