Inside ManageEngine's AI-powered growth strategy towards $1 bn in revenue

Zoho Corp's IT management arm, ManageEngine, has been sharpening its focus on artificial intelligence (AI) and machine learning (ML), positioning itself as a leader in digital transformation for IT services.

“IT is one of the most heavily digitised fields, making it ripe for AI innovation,” said Ramprakash Ramamoorthy, Director of AI Research, ManageEngine and Zoho Corp, in an interaction with Business Standard.

The company, which provides a suite of IT management products, aims to capitalise on the growing demand for AI-driven solutions, especially in areas like security and incident management.

Since its first AI rollout in 2014, ManageEngine has gradually integrated various AI-powered features across its offerings, including anomaly detection and predictive forecasting. “The goal was to see if AI would fit the enterprise space,” Ramamoorthy shared. “We started by replacing traditional statistical tools with AI-driven insights, and it has evolved since then.”

ManageEngine is now ramping up its AI efforts across three key domains: statistical machine learning, computer vision, and natural language processing (NLP). These technologies are enabling the company to predict outages, detect malware and ransomware, and streamline tasks such as IT procurement through optical character recognition (OCR).

“One of our key focus areas has been security. The rise of security threats during the pandemic required us to scale our AI capabilities. We’ve focused on ransomware detection by using AI to analyse behaviour patterns and flag potential anomalies,” Ramamoorthy explained. “We’re now looking at how AI can identify threats at a more granular level by sifting through massive amounts of logs and summarising incidents for faster resolution.”

In line with its AI push, ManageEngine is also investing in large language models (LLMs) – a critical focus area for the company over the next year. These models are expected to transform how businesses handle logs, configurations, and IT incidents, allowing administrators to spot potential issues before they escalate. “We are building our own LLMs fine-tuned for IT-specific workloads,” Ramamoorthy said.

“Our goal is to introduce a 7 billion parameter model that focuses on Indic languages and IT operations. We believe this model will balance behaviour insights and scale effectively,” he added.

The deployment of AI across the company’s offerings is driven by the need to help enterprises attain “digital maturity.”

Explaining this further, Ramamoorthy said, “AI works best in environments that are already digitally mature. Once businesses streamline their processes, data, and automation, AI can come in and provide a holistic picture of IT infrastructure. We’ve always believed that AI is about augmenting human expertise.”

To support these initiatives, ManageEngine recently announced a $10 million investment in NVIDIA GPUs, which will power its AI infrastructure, particularly for training and deploying LLMs. “GPUs are essential for large-scale AI operations, and we’re partnering with top vendors like NVIDIA, AMD, and Intel. Currently, we’ve deployed small and medium language models for use cases like translation and grammar correction. Our future stack will integrate large language models for more advanced IT-specific tasks,” said Ramamoorthy.

Cloud expansion and a roadmap for the future

ManageEngine’s cloud business has been growing rapidly, with a 70 per cent year-on-year increase, according to the company.

The company’s tools are available across multiple deployment options, including public clouds, private clouds, and its own data centres. “We’ve seen a massive shift to the cloud, especially after the pandemic,” said Ramamoorthy. “Our cloud tools are growing at a much faster pace compared to on-prem tools, and that’s why we’ve set up multiple data centres in India.”

With data privacy and security becoming increasingly critical, ManageEngine is investing in its own co-located data centres in Mumbai and Chennai to ensure a seamless experience for customers while complying with data localisation requirements. “We’ve built our own infrastructure rather than relying on public clouds because we want to have full control over the experience we offer to customers,” he explained.

Going forward, ManageEngine is betting on emerging markets like India, Latin America, and Southeast Asia to fuel its growth. The company, which already has over 5,000 employees, is expanding into tier-2 and tier-3 cities in India as part of its “transnational localism” initiative. “We want to stop urban migration by creating high-paying jobs in rural and semi-urban areas. We’re committed to growing our presence in these markets and building ecosystems that benefit the local community,” Ramamoorthy added.

While Zoho Corp crossed $1 billion in annual revenue last year, ManageEngine is setting its sights on hitting the same milestone.

“It will take a couple of years, but that’s the target we’re collectively working towards. India is currently our third-largest market, but we expect it to soon become our second-largest. With our cloud business growing at such a rapid pace and consistent year-on-year growth above 50 per cent, we’re confident about achieving our goals,” Ramamoorthy concluded.