Sridhar Vembu, CEO of AdventNet, the parent company of Zoho, sat down with Liz Claman to discuss the possibility of being bought and “cloud computing,” which he defined as “software on the Internet.”

“You don’t install it, you don’t maintain it, you just go to a browser and visit Zoho.com or one of the sites, and you use it,” Vembu said of the technology.

Visitors to Zoho.com can log in using their Google or Yahoo e-mail addresses, Vembu said, making it unnecessary for users to go through a lengthy registration process.

Zoho applications include the basic office applications, including a word processor, spreadsheets, and applications for presentations.

“For consumers it’s entirely free. That’s the new business model now,” said Vembu. 

For businesses that sell software and applications like Zoho’s, Vembu said, “It is quite disruptive to their business models,” adding that “Microsoft, of course, has the most to lose in this.”

Vembu said the Zoho system costs a lot less to maintain and keep up than a traditional software system, and allows them to pass on the savings to the consumer.

“In our case, we actually make money from businesses. We use the consumer edition to get the brand awareness out there, and then we make money from businesses, and we feel that’s a very viable business model,” Vembu said.

Claman asked Vembu of his recent decision to turn down an offer from SalesForce.com to acquire Zoho.

“I see a big potential in this, so we really are not selling anything,” Vembu said. When asked if the company was making more than $1 million a month, Vembu replied, “It’s a lot more than that. We don’t disclose numbers, but it’s a lot more than that,” he said.

With regard to an IPO, Vembu said, “It’s not something we are focused on right now. We are focused on building and serving the customers right now. When asked about selling the company, he replied, “Never say never in business, but we are actually in this for the long haul.”

Zoho’s name began as Soho, which would have stood for “Small office, Home office.” But Vembu said Zoho was a “cooler version” and a “nice domain.”

When it comes to hiring, over half of Zoho’s staff is from India. Vembu said this was due to finding a “huge talent shortage in the Valley.” Zoho now has its own internal recruiting system in which graduates from lesser-known colleges around the world are recruited and put through Zoho’s unique training system, according to Vembu.