During the recent ZohoDay26 conference (February 2026) we heard from many of Zoho's leaders. Mani Vembu, CEO of Zoho articulated a fundamental structural flaw in modern business software. Venbu mentioned that when they ask customers how many applications they have, they "most often they say like more than 50 applications". The traditional approach to managing this sprawl has been to connect disparate systems via APIs. However, Vembu correctly notes that connecting systems with APIs is not the same as unifying them. This distinction is critical for technology leaders.

By continually adding point solutions, businesses keep trading complexity for flexibility. The result is a fragile, fragmented foundation that increases total cost of ownership and slows down time to value.

The Three Layers of System Fragmentation

Vembu categorizes the current software crisis into three specific layers of fragmentation:

• Data Level Fragmentation: Information remains trapped in isolated application silos, preventing a unified view of the customer or business operations.
• Middleware Level Fragmentation: Without a common middleware layer, organizations rely on complex, mutual integrations. This creates a brittle environment where changing one system requires extensive rewiring across others.
• Application Level Fragmentation: End users suffer from inconsistent interfaces and a lack of unified access controls, such as universal single sign-on.

From Apps to a Business Operating System

To resolve this, Zoho is shifting its strategy from offering standalone applications to providing a unified Business Application OS, referred to as App OS. Taking inspiration from mobile operating systems like Apple iOS, this approach ensures that applications share core data structures, UI elements, and identity management by default.

Because App OS provides common business and process models, any software built on this infrastructure inherits built-in permissions and governance. This allows central IT teams to enforce compliance globally while still giving departments the autonomy to build what they need.

Implications for CIO's Strategy from Vembu's talk

The enterprise is about to face the AI Application Surge. Generative AI is drastically lowering the barrier to writing code, meaning the proliferation of custom software is inevitable.

If businesses continue to deploy AI-generated applications on top of a fragmented foundation, the existing complexity will multiply exponentially. A unified OS acts as a necessary constraint. It allows developers to use AI to generate application code based on business requirements in days rather than months, while ensuring that the resulting applications are natively secure, interoperable, and compliant.

Technology leaders must stop evaluating software based solely on feature sets. Over the next five years, the primary evaluation criterion must be the structural integrity of the platform itself. Moving to a shared data foundation is the only sustainable way to manage the coming wave of AI-driven software creation.

References

• Vembu, Mani. "From Apps to Platform: Foundation for the Future." ZohoDay26, 18 Feb. 2026, Zoho Corporation. Keynote Address.