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Confronting the Practice of Adjunct Surveillance – Futurum Tech Podcast Interview Series
by Daniel Newman | June 22, 2020

On this special episode of The Futurum Tech Podcast – Interview Series host Daniel Newman welcomes Raju Vegesna, Chief Evangelist at Zoho to discuss data privacy and security including examining Zoho’s new bold stance on privacy. In the last few years, it seems like the respect of privacy has declined. Ad networks collect massive amounts of information about consumers, giving seemingly endless targeting options to companies, but there is no control given to the user about what information is collected — and that needs to change.

Raju and I explored how companies use adjunct surveillance to make money off of customers. Data is being collected about us, from our shopping habits to our browsing history, and a lot of it is being done without our knowledge. While it’s more common in the consumer world, it’s also happening in the B2B world too. Companies embed tracking or analytics code to monitor what is being done on their sites, but this information collected by third parties is then sold to other companies. Zoho said enough with this practice.

Zoho’s bold stance on privacy. Raju shared that Zoho no longer embeds any tracking or analytics software from third parties on its websites or applications. Everything that is embedded is a Zoho product with an easy to understand explanation of what data is being collected. Zoho’s customer’s can enable tracking from other parties, but it is not something that Zoho does which is a compromise they are willing to make.

The privacy pendulum is swinging back toward permissions. We discussed the potential future in this area. I’ve been a purveyor of privacy for many years and hope that more companies follow Zoho’s lead. Raju believes that more companies will. He shared that recently The New York Times eliminated a lot of the trackers on their website which is hopefully generating some awareness around these tracking practices. Ultimately it would be great if users get full control over what data is being collected and shared.

What success will look like. Lastly, Raju shared what the payoff will look like from this stance on privacy — and he doesn’t mean in financial terms. Zoho is lucky since it is a private company, they are able to create and take this stance. It is the right thing to do and Raju shared that they have the freedom to take this risk. Raju posed the question, “what’s the point of being financially profitable if you’re morally bankrupt.” For the company, it really only matters if they are doing the right thing.

I recently explored Zoho’s new stance on privacy and adjunct surveillance. Be sure to check out the article to learn how they are looking to set themselves apart from other B2B vendors. If you’d like more information about Zoho and their offerings you can visit their website.

Don’t forget to listen to the full episode here.

Disclaimer: The Futurum Tech Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Image Credit: XIST2

Transcript:

Daniel Newman: Welcome to the Futurum Tech Podcast. I’m your host today, Daniel Newman, Principal Analyst and Founding Partner at Futurum Research. I’m really excited to bring to you this Insider Edition of the Futurum Tech Podcast, as we have Raju Vegesna from Zoho joining me to talk about something near and dear to my heart, and near and dear to many people’s hearts, and that is going to be privacy and protecting people’s data in a world where nobody really seems to know what is going on with their data anymore.

Just as long as they have enough value, they’ll download anything. All right, I say it a little bit in jest, but we are in a world now where data is sort of the gold mine for most companies that are trying to deliver these world class experiences, but concurrently, it’s also one of those things that, to many of us, is very important. We have a lot of private things, private conversations. We have relationships, exchanges, we have things that we’re interested in that we don’t want the world to know about.

But yet, as we’ve used the internet more and more, we’ve sort of had this blur of who knows what about all the things that we’re doing. In short, the answer’s almost become everybody. So, I want to use this opportunity here to talk a little bit about what’s going on here. So, without further ado, Raju, welcome to the Futurum Tech podcast Interview Series.

Raju Vegesna: Thank you for inviting me, Daniel. Great to be here.

Daniel Newman: Yeah, it is great. We were just talking before the show started, you’re down there in Austin, Texas. It’s got to be steamy hot down there, when you go outside. So, hopefully you’re inside.

Raju Vegesna: It’s still getting there. It’s only mid-nineties.

Daniel Newman: Only the mid-nineties, yeah, that’s the type of weather where you walk outside and your clothes stick to you. But yeah, that’s not too bad, but thank God for great air conditioning. But anyways, welcome to the show. Before we jump in, I’ve got some great questions for you, and like I told everybody out there listening to the podcast, this is something really near and dear to my heart.

I would love for you just to do a quick introduction of yourself. You’ve got this really broad role in a very unique company. Zoho’s a private company, but it’s a big private company. I’ve learned a lot about the company over the last year since I started working with you. Come to find out, unlike a lot of the big, public traded companies that have people that are in these very defined roles, you have a lot of very intrapreneurial and entrepreneurial types, and you definitely sit in that role. So, just a quick intro and talk about sort of what excites you about your day-in and day-out work there at Zoho.

Raju Vegesna: Certainly. My official title is Chief Evangelist. Generally, in the company, we don’t let the title restrict what and where an employee contributes. I work closely with a lot of customers on one side, a lot of product managers on the other side, basically on the technology side of things, as allows the customer on the customer interaction side of things. I basically have one leg on the customer side, and one leg with the technology and the product side of things.

Daniel Newman: It’s kind of the marriage of people and experiences, digital transformation, people and technology. You got to bring those things together, and that’s one of those big missing links for a lot of companies is, you can’t throw technology at people problems, and sometimes you can’t throw people at technology problems. You really do need to blend those two things together.

Quick reminder, as you are listening to the show, just know this show is for information and entertainment purposes only. While we do talk about a lot of big tech, big tech companies, please don’t make any investment decisions based on anything that Raju and I talk about through the rest of this conversation. It is super interesting, nevertheless.

Let’s dive in here, to privacy. I want to get your take. I’m on the record, frequently, I write a lot about this, whether it’s in my Forbes column, whether it’s on Futurum Research, on the site, about my thoughts on privacy, but I’d like to hear a little bit about, what are you seeing in the world as it pertains to data privacy?

Raju Vegesna: Privacy, the respect of privacy, unfortunately, has declined, and that has to be brought back. In my view, privacy is being abused by a lot of companies out there. The pendulum has swung too far, too far on that particular abuse. It has to be brought back, and the user whose information is being abused has to be in control, not the companies who build the networks who are collecting all this information. To understand what information is being collected, actually you have to look at it on the other side of the table, what information is being provided to the advertisers about the user. That will give you an idea on what and how bad the abuse is. I frequently take a look at some of the advertising targeting options M.O., all on ad networks out there. That gives me insights on how crazy it has become.

It is actually very scary. There is an entire ad mafia out there that collects all that information about that user. That allows the advertisers to target users in some crazy ways. To give you an example, let’s say I can target an ad for people who walked out of Home Depot today.

Location information of people is being tracked inside out. Or I can target a set of people who watched a short, like Shark Tank or some other show, or 60 Minutes. If you watch those shows, and I said these are people I want to target, or maybe a combination of these, that tells you that the location is being tracked, the microphones are listening, the websites that you’re visiting too, the videos that you’re watching, every browser, every click is being tracked. The problem there is the user doesn’t even know that they’re being tracked. I believe the tracking has gone too far and the user has no way to control it. It has to be brought back to a period where the user can control what information is exposed.

Daniel Newman: Yeah, it’s really interesting. We’ve hit this world, I mentioned this early in the conversation, Raju, about experiences and data. We’ve heard that the future of digital transformation and business is creating these great experiences, and certainly being able to personalize and deliver somebody a tailored opportunity in the moment. “I know you were at Home Depot today, and this why I’m going to provide you a certain discount for returning to the store.” Or “I know you’re out shopping, so I’m going to get you this perfect opportunity now to go out and pick up dinner on the way home.” These are very momentary, in the second, and it seems great.

For a lot of people, I think, first of all, there’s a problem with education, because I think legalese, in general, has driven us to this world where we sign up for applications, we enjoy the use of them, but we don’t really think about what we’re giving up. We just hit accept. I think the companies and the lawyers know this, they know we’re just going to hit accept, they know we’re not going to read anything. And they know that, these companies will be able to completely point back to the accepted user agreement if there’s ever any question of the data that was used and abused. This puts these companies at a distinct advantage in terms of delivering these experiences.

Now, I’ve been saying for a long time that there’s going to be this pendulum, like you mentioned, that will swing and people are going to start to go, “Maybe that was too much.” Something Zoho talks a lot about, by the way, is this adjunct surveillance, you sort of alluded to this. Then, in your most recent analyst summit you presented to us, and news broke, and I wrote about this, that some of the tracking technologies that these companies are making available. Basically, Zoho said we’re not going to embed these natively anymore. That’s not to say that if a company is using Zoho and really wants to do this, they can’t do it. But Zoho is saying we’re not going to bake this in. We’ve changed our mind and we don’t want to be advocating for this. What drove you to that point? What drove the company to the point, because I’ll be honest, I think it’s awesome, but I also think it was a huge risk.

Raju Vegesna: Well, I think, notice that it is going too far. If you look at what’s happening, the consumer, when they use a free service, like if the email service or some other service, they know that they are paying for that service using their data, their activity. That’s a direct surveillance. But what they’re not familiar with is the data that they’re giving up without their own knowledge. For example, some of the surveillance companies do have deals with credit card companies where all your credit card transaction information is simply passed on to these ad networks. Or another example is, recently, some of this information came out that your healthcare records is simply being passed on to these advertising networks. The key there is, it is being done without your own knowledge. That is the adjunct surveillance that’s happening now.

We notice that that’s happening in the consumer world. But if you look at the B2B world, or area that we play in, that is taken for granted, that has been happening, and that is taken for granted. If you look at the tracking or analytics code that is embedded on company’s websites, or their applications, or it could be as simple as a font that is being downloaded, you may be naive in thinking that you’re just using a web based font. What you’re not realizing is that downloading that font means you’re giving a lot of information, just like a tracking pixel. That is a tracking font that is gathering your location information to device, to whatnot, and passing that information. All of these is embedded across the web, across all of these B2B software, and we realized it and said, “We’ve got to take a stance.”

Historically, the last 24 years, we have never done advertising, and we kept it that way. Even though we offer free products, we kept it that way. But now, given the extent of the abuse, we said, “We got to take a stance.” That is the reason we said, “We are going to stop this adjunct surveillance. We are not going to let these surveillance companies track users, as long as they are on our properties.”

We stopped embedding many things. You will not find a like or a tweet button on any of Zoho’s properties. You will not see a Google analytics embedded out there. So like that, we got rid of a lot of these embedded software on our side so that no third party will be tracking our users as long as they are on our site. That’s the stance we took from outside, and that’s an important one.

Daniel Newman: I’m going to ask you next, I want to talk to you a little about the philosophy of Zoho, but it sounds to me like the philosophy now is that your stance is we’re not going to overreach and overstep. We are not going to be an enabler of it. Like I said, I’ve done a little bit of homework, and you can certainly still use this data within Zoho, but Zoho is not enabling it. It’s got to be enabled in your own platforms, your own data platforms, and then you can bring the data in and use it as you see fit. But, there’s a lot of CRMs out there, there’s a lot of tools, and you guys are more than a CRM. You’re sort of like an app for everything. That’s sort of what Zoho has become, an app, a productivity app for everything, a business app, a data app.

It’s impressive. As someone that tracks the big software companies, I don’t think most people have any clue how many things Zoho does. I think people at Zoho probably have a hard time keeping up with everything Zoho does, which is very cool. I’m kind of interested, isn’t this sort of like an opposing force to what the market asks for? I mean, I love companies that believe in things and do it, I think there’s always value in that. But don’t your customers feel some risk if they’re actually working with less data? How are you positioning that they don’t come back to you and say, “Well, I can’t work with you because these other platforms give us more tools, because they’re letting us creep, and they’re letting us track, and they’re letting us stalk, and you’re not making it as easy for us.”

Raju Vegesna: Yeah, certainly there are two things here. One, tracking users’ data within Zoho to provide them the service. In this case, Zoho uses a Zoho service, that part we do. But where the commitment is, we are making is, we are not going to let this data pass through to third parties. That’s a firm line we are taking, We are tracking them, to provide them a service, within our applications, and that service does not mean ads because we never do ads, and we have never done that in our 24 year history.

Now, when it comes to third parties, by default, we are not enabling anything. You will not find, let’s say, a Google analytics code on any of our websites by default enabled. Not just our websites, even the website that you created. If you want to embed it, certainly we are not stopping you from doing it. You can do that. It might be maybe a little bit of an inconvenience because it is not enabled by default, but that is the compromise you make. It is considered a feature for some customers, but it is considered a bug for others. That is a compromise we’ve got to make.

Then on top of it, we also advertise as a company, but by not embedding these trackers, we lose some data about our customers. We won’t be able to, let’s say, re-target some of our users out of that. So it hurts us, but that is a compromise we were willing to make and we are willing to make. We said, “It’s okay if you don’t have that information about our customer’s activity, protecting their privacy is more important.” That’s sort of a compromise we made.

Daniel Newman: I think that makes a lot of sense. I think it’s always important because it’s nuance. It’s not like you guys are saying data is bad, and we don’t want to make data available. But I think when you start to talk about it in the greater picture of things, there’s a chasm, and like you said, it’s a spectrum of how much you want to abuse data versus how much you want to enable companies to do the work they need to do. To deliver great experiences, you need data. I think we have a permission-less society that needs to shift to more permission. You know what I’m saying?

Raju Vegesna: Absolutely.

Daniel Newman: I think that’s got to be the key. I would love to see us move towards more permission, more requesting. Then, if people want to share everything they do, they share, because they realize they’re going to get a little bit better experience, but they have to know what they’re giving up. That’s what I feel like has been sort of missing here.

People don’t know. What am I giving up? That makes me sort of ask the question, to you, are you guys in the front end of a trend? Because, like I said, I’ve been raising my hand for a while, but I’m also a purveyor of privacy. I like duck, duck go, for instance. But I’m in the 1% of people out there. I read privacy policies. I actually know when I use private browsing, what it does and doesn’t do to protect my data, and it doesn’t actually do that much. But if you don’t read and pay attention, I think I’m in the very small percentage of people in society, but I think we have an awakening, because in the future, like I said, people will have nothing that will be private. They will have nothing that is of great importance that advertisers won’t know.

I’ve always said that your phone knows more about you than your spouse, then your parents, then your best friend, and it’s only getting worse. Are people going to jump on this trend? Are companies going to follow you? Or do you think you’re going to stay a little bit of an outlier?

Raju Vegesna: I sure hope so. I believe the pendulum will swing back and I believe there will be more and more companies that will go down this trend, both on the consumer side, as well as on the business side. We are seeing some trends here and there. Recently I noticed that, I think New York Times decided to get rid of a lot of trackers on their website. That’s a welcome sign. I hope that it also a beginning of awareness that it creates, and it could be a good possible spiral that’ll help this trend. It has gotten too far, and we are seeing the side effects of it.

Now, I think, the consumers will want control of it. As a user, you want to know what information you want to expose, and then what not. Getting that that control is important. Imagine having a block chain of information that for every user that publishes all their personal information, or information that they’re willing to share, then advertising companies should be able to bid for that information, so that users should, end of the day, should enable switch it on, or switch it off, on what information they’re willing to share. The user, end of the day, should be in control.

Daniel Newman: You actually said something I’ve been saying for a long time, I call it the on ramps and off ramps. How come if I go to the mall, and I want to have the best in the moment offer from the Gap, as I walked by the Gap, maybe I want to have my privacy policy at that moment set to be very open. Share where I am, share what I’m doing, share what you know about what I like. But then, when I leave the mall and I get in my car and I leave, I want to go to toggle, and just say “Off”, and leave me alone. It’s just not feasible right now, and I get it. I mean, that’s probably the reason there’s so much fear in the world about the microchip of the human is because that’s the only data we have left, is what we think, and what we do when we’re not on our device, and when we’re not on a device.

It’s become such an aggressive market to gain any little competitive advantage. We’re balancing these two things. We’re balancing great experiences with just relentless data, invasive data policies. I do think it’s an opportunity for you and the company, but I also think it’s very interesting, which begs my last question for you in this interview, Raju, is, how are you going to deem if this is paying off? What’s your impact? I know you’re not a public company. You don’t typically disclose revenue, but you have shown me data in the past about growth, customer acquisition, or even just anecdotal feedback. Are people getting on board with this? Is this going to drive business? Is the market excited about this, kind of what’s the response been?

Raju Vegesna: Payoff is not necessarily always in the financial terms, at least that’s not how we look at it. End of the day, for us, we’re doing it just because that’s the right thing to do. That is the freedom we have as a private company. Not every company has that freedom, but as a private firm company, you get to pick the values.

What’s the point of being financially profitable if you are morally bankrupt? This is one of those moral things that we believe in. End of the day, we consider it as our life’s work. All of us have been doing it for a few decades now, a couple of decades now. It comes down to, is this something that we are proud of? It really comes down to that.

It is not a financial payoff, maybe it will, maybe it won’t. Maybe we’ll make 5% less, well, sure, that’s fine. That’s a good compromise. Maybe 10% less, whatever that is, we are willing to take it because if we are not proud of the work that we are doing, then what’s the point of doing the work? We look at it from a philosophical way and not in a financial way. That is how we make most of the decisions, and that is the price of the freedom that we pay. The freedom of being private and that advantage of being private shows off in this case. We don’t actually look at it from a financial sense, it’s just purely, is it the right thing to do? And are we proud of it? And that’s the only way we look at it.

Daniel Newman: Yeah, I think that’s great. And really with everything that’s going on in the world right now, Raju, we’re in that sort of pivotal moment. I was listening earlier, during a different event, to Simon Sinek and you’ve probably heard maybe a bit of it. He said to start with why, and the infinite game is his new topic about doing something rather than necessarily keeping score in the end. It’s all about this infinite, what makes you the best possible company? And we spend a lot of time doing things for the short run that cost us in the long run.

In your case, it sounds to me like this is kind of an infinite game. Is this something that Zoho genuinely believes in, wants to support, willing to take short term lumps in terms of possible customer revenue, declines, or even some customers that aren’t happy because there’s a little extra work. But at the same time, you can go to bed at night and say, “Hey, we’re doing something good for the world.” And with what we’re facing these days with health and wellness in the world, with injustice, inequality in the world, companies that stand for something other than profit is certainly going to be a debate and a discussion that will need to continue, and really need to be had, because so much of the inequality and so much of every decision being made right now is just based on people’s greed and wants.

And then, like I said, I’m an entrepreneur, so I like making money and I like success. But at the same time, sometimes you have to go to bed and say, “Did I do good? Am I doing good? Because what is all this for if I’m not?”

Raju Vegesna: And can you sleep well at night? I think that’s an important thing, that is equally important. It has become too financial-ized, where extracting every penny out of that wallet is becoming the norm. In our case, one of the things that is part of our business model is to leave money on the table. End of the day, that is an important thing. If you don’t need it, well, just that’s okay. Customer can spend it elsewhere. Create that long term relationship with that customer, so there’s the short term wins, and long term wins, so we prefer the long term wins.

Daniel Newman: I love it. It’s a great way to think. Raju, I just want to say thank you so much for joining me today on this Futurum Tech Podcast interview. I think you had some great insights. I was really excited when I heard what Zoho is doing with privacy. I do hope, deep down, that companies, they don’t all have to follow your lead, but I do hope that every company is thinking about this, and thinking about it hard, about the implications, direct and indirect, of being so aggressive in terms of how we collect data.

Raju Vegesna: Appreciate it. Thank you for having me, Daniel. I really hope a lot of companies join this. Again, it is all about protecting users’ privacy and I hope a lot more companies join us here.

Daniel Newman: Great conversation. Hey, for everyone there, check out the show notes. It’s going to point back to an article I wrote, along with that pointing to Zoho’s privacy stance, some very interesting content that the company put out. Hit that subscribe button. We love having you in our community. We’ve got a lot of great interviews from folks like Raju, and from all over the tech industry and space, along with our regular shows with our analysts, our topics, our subjects.

But for this show, got to say goodbye for now. I want to thank everybody for tuning in. We’ll see you later. Bye bye now.

Daniel Newman