By US software buyers have not stopped needing technology. AI costs and fast-changing conditions leave them unsure what their strategy should be, and budgets are being squeezed. For vendors, that uncertainty shows up as slower growth.
In this interview on TFiR, Tony Thomas, Co-founder at Zoho Corporation, breaks down why AI budget uncertainty is slowing US software growth and where growth is coming from instead.
Guest: Tony Thomas, Co-founder at Zoho Corporation
Show: The Agentic Enterprise
Watch the discussion on YouTube
Here is what every software executive needs to know.
Technical Deep Dive
Q: Why is AI budget uncertainty slowing US software growth?
Tony Thomas, Co-founder at Zoho Corporation, says the US is now the most challenging market because of AI and the uncertainty around it. Many businesses are asking what their strategy should be when everything is changing so fast. Thomas says that hesitation explains some of the growth challenges for software companies.
“The US may be facing the greatest challenges right now because of AI and all the uncertainty surrounding it.”Tony Thomas, Co-founder, Zoho Corporation
Q: Is slow US software growth a demand problem?
Thomas says the problem in the US is not that people do not need the technology. Businesses are wondering what they should be doing as conditions change quickly. The hesitation is about direction, not demand.
“Right now, people are just wondering what they should be doing.”Tony Thomas, Co-founder, Zoho Corporation
Q: How are AI costs affecting enterprise software budgets?
Thomas says AI budgets and the cost of everything are eating into business spending. That makes this a challenging time for most businesses. He ties that pressure to the growth challenges software companies face.
“So it is a challenging time for most businesses today, which explains some of the growth challenges for software companies.”Tony Thomas, Co-founder, Zoho Corporation
Q: Why is software growth stronger outside the US?
Thomas says the rest of the world is adopting technology and growing quite fast. Many countries are digitizing, their economies are growing, and businesses are getting more digital and more online. That gives Zoho tremendous potential worldwide, with great growth in many countries.
“The growth potential for Zoho across the world has been tremendous, and we are seeing strong growth in many countries.”Tony Thomas, Co-founder, Zoho Corporation
Q: How much of a software vendor’s business still comes from the US?
When Zoho first started, 100% of its market was the US, Thomas says. Today the US is about 30% of the business. Growth in the rest of the world has changed that mix.
“When we first started, 100% of our market was in the US. As you can imagine, it now accounts for about 30% of our business.”Tony Thomas, Co-founder, Zoho Corporation
Resources & Documentation
- Zoho Corporation, official site for Zoho Corporation’s products
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👇 Click to Read Full Raw Transcript
Swapnil Bhartiya: Are you targeting only the US market or are you looking at the global? Because you have EMEA, or of course Europe is a big market as well. India itself is a huge market. Of course, China can be a market as well. So when you look at from when you started and when you see now also this, I mean, the world we are living in has changed when you started. So how do you look at it scattering to? And also if you can talk about which markets are, is Zoho more, the presence is stronger versus other markets.
Tony Thomas: So when we first started, 100% of the market was the US. As you can imagine, now it’s about 30% of our business. So worldwide, the rest of the world is adopting technology and growing quite fast. As you might imagine, many countries are digitizing, and you know, the business and the growth in the economy itself is significant, as well as them getting more digital, more online. So the potential for Zoho across the world has been tremendous, and we are seeing great growth in many countries. The US may be the one that is most challenging now because of AI and all the uncertainty. A lot of businesses are now wondering what their strategy should be. You know, with everything changing so fast, what should we be doing? So the challenge in the US is not that people don’t need This technology. Right now, people are just wondering what they should be doing. And of course, the AI budgets and cost of everything is eating into their budgets. So it is a challenging time for most businesses today, which explains some of the growth challenges for software companies.
