‘I always ask employees to calmly contemplate our death,’ says Sridhar Vembu about Zoho surviving the AI wave

Zoho co‑founder Sridhar Vembu said the future of software‑as‑a‑service (SaaS) companies is under threat in the age of AI‑assisted coding. He added that a company’s ability to quickly adapt to rapid structural changes would determine its survival.

Sridhar Vembu's take on SaaS companies facing threat from AI wave

In a post on X, the veteran entrepreneur remarked that the stock market’s growing pessimism towards SaaS companies was not sudden, but overdue.

Vembu reasoned that even before the current AI wave, the SaaS industry was “ripe for consolidation,” having grown on a model that prioritised sales and marketing spending over engineering and product development.

“The venture capital bubble and then the stock market bubble funded a fundamentally flawed, unsustainable model for too long,” Vembu wrote, noting that artificial intelligence (AI) is now “the pin that is popping this inflated balloon.”

His remarks come amid sharp volatility in global and Indian IT stocks after the launch of new AI tools by US startup Anthropic.

“The stock market is becoming very negative about the prospects of SaaS companies in the AI-assisted Code era,” Sridhar Vembu wrote on X.

“Well before the AI revolution, I have said SaaS industry is ripe for consolidation. An industry that spends vastly more on sales and marketing than on engineering and product development was always vulnerable,” he added.

He concluded the post with a reflective question if Zoho can survive the AI wave.

“It depends on our ability to adapt,” he said.

“I always ask our employees to calmly contemplate our death. When we accept that possibility, we become more fearless and that is when we can calmly chart our course,” Sridhar Vembu shared while signing off.

The stock market is becoming very negative about the prospects of SaaS companies in the AI-assisted Code era. Well before the AI revolution, I have said SaaS industry is ripe for consolidation. An industry that spends vastly more on sales and marketing than on engineering and… https://t.co/JHhodD4VPo

— Sridhar Vembu (@svembu) February 4, 2026

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