‘Future is atoms, not bits’: Sridhar Vembu reveals where Zoho is betting its R&D dollars

Zoho founder Sridhar Vembu has revealed that the company is investing heavily in research and development-led manufacturing, echoing the belief that the future of innovation lies not only in software but also in the physical economy.

In a recent post on social media, Vembu shared excerpts from an interview featuring former Meta CTO and venture capitalist Mike Schroepfer, who outlined his investment philosophy around companies rebuilding the physical economy.

Quoting Schroepfer, Vembu highlighted the growing focus on businesses involved in powering, building, moving, manufacturing, and feeding the world.


“We are backing companies that are rebuilding the physical economy. This is how things are powered, built, moved, manufactured and how people are fed,” Schroepfer said.

Schroepfer also argued that rapid technological advances are creating products and companies that are “better, faster, cheaper” than existing alternatives, adding that this sector represents the largest part of the economy.

‘Future is atoms, not bits’

One of the key ideas that resonated with Vembu was Schroepfer’s statement that “the future is atoms, not bits,” a reference to the growing importance of innovation in physical industries alongside software-driven advancements.

Responding to the remarks, Vembu wrote: “I agree with him. Bits are important but atoms are equally important. The future is bits and atoms made to play together. That is where a lot of innovation is coming.”

Zoho’s manufacturing R&D push

Vembu said Zoho’s own investment strategy is aligned with this philosophy.

“Zoho is investing in R&D driven manufacturing with this same thesis,” he wrote.



The comments provide a glimpse into the company’s long-term priorities as it looks beyond software and cloud applications toward technology-enabled manufacturing and industrial innovation.

Vembu’s remarks also reflect a broader trend in the technology sector, where advances in artificial intelligence, robotics, automation, materials science, and manufacturing technologies are increasingly blurring the line between digital software systems and physical products.

For Zoho, the focus appears to be on combining software expertise with manufacturing-led innovation, a strategy Vembu believes will drive the next wave of technological progress.