Business Daily meets: Zscaler CEO Jay Chaudhry
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Hello and welcome to Business Daily Meets on the BBC World Service. I'm Will Bain and today we're speaking to Jay Chaudhry, the CEO, chairman and founder of Zscaler, the cloud-based cybersecurity company which works with firms and governments around the world to try and keep them and their customers' data safe.

Today, we'll hear about his extraordinary journey from a village in the foothills of the Himalayas with no power and water. We got electricity after I finished my eighth grade and I walked to school about three or four kilometers every day. To founding a cutting edge technology company on the front line in the fight against cyber criminals. In the past four or five years, the number of ransomware attacks has picked up significantly.

And in a world which is changing fast, how is he trying to stay ahead of the game? AI is wonderful. AI is dangerous. The bad guys are using AI and we are using AI to fight back. That's Jay Chaudhry, the founder of Zscaler, here on Business Daily from the BBC World Show.

Sometimes I wonder if my life is real or I'm simply dreaming. I was born in a tiny village in the foothill of the Himalayas in northern India. And we got electricity after I finished my eighth grade, running water after I finished my tenth grade. My parents were small-scale farmers. But the life was pretty simple and happy. And I walked to school about three or four kilometers every day.

It just worked well. I was fortunate. I loved to study for whatever reason. I would study every book I could find out there. So I was a good student.

And that's why I got into engineering in one of the IIT colleges in India, then came to the US to do my master's. Do you remember that moment, though, I suppose? Because a lot of people, a lot of tech leaders that I've interviewed over the years, you know, they're playing around on something, whether it be, you know, a phone or an early games console or an early thing of a computer. You know, they're doing some coding. They're messing about. Presumably in your formative years, you didn't have that option. None of that.

And I have no DNA of entrepreneurship in my family of small-scale pharma. So I really did not plan all this stuff. I was a good student. And when I got to high school, they said in college, two good majors, either you do medicine or you do engineering. I did not want to deal with blood, so I said engineering it is. Sensible man.

It was simple. In fact, the funny thing is when I had to select my major in engineering, I didn't quite know what majors good or bad. I looked at the list. Electronics engineering felt good. I knew it dealt with radar and telephone and television. But I started as a software engineer after doing my master's.

at University of Cincinnati, Ohio in the US. I started my jobs in software development because I was an engineer. I got into business, maybe call it by accident. I worked for a small startup in Cincinnati and they wrote these computer systems, information systems for healthcare industry, for nursing homes, for pharmacies.

And one day, the only sales engineer in the company called in sick. There was a customer demo scheduled. And my boss said, you wrote this system. Why can't you do a demo? I was 24 or 25 at that time. I had never talked to a customer before. I prepared for it. The demo went very well. I went home that evening. As I was driving, I said,

That was a lot more fun than writing code every day. So you got the rush, the adrenaline rush, I guess. Yes, yes. I said I need to learn and understand about getting into the business world of sales and marketing. And then I went to school, did MBA in marketing so I could learn a little bit. Then I called IBM office in Cincinnati.

And they interviewed me. They hired me because they needed people in sales who had technical and engineering background to compete with HP computers and digital computers. So fast forward a little bit. When did you start thinking about your company, your product, and how it would look and how it would work? When did you sort of get that itch of like, I think I can do something for myself here? So IBM taught me.

how to do business and sales and marketing. That is very important. Then I moved to a couple of different companies and there's about 95, 96 timeframe. I was working for a small public company in Atlanta, Georgia. And I was number two man there. I was pretty exposed to business at that time, but I was still not thinking about startup. And one day I was reading about this company Netscape.

that had invented Mozilla browser. This company had just gone public. Mark Andreessen was the founder. And I was reading about it. I said, wow, now with a simple browser, you can access all the information you want. This is so wonderful technology. The world will embrace it. But if they embrace it, there'll be some cybersecurity issues because everyone is connecting to the internet.

In the 1990s, as the internet was just getting started, amidst all the excitement, Jay Chaudhry was already spotting potential problems. In the world of internet, everyone is connected to the highway system. It's just a cyber highway. Once you have a highway, good guys go on highway, bad guys go on highway. So I said, this could be an issue. The more I read about it,

The more I got convinced that there's a need in this area, and that's why I started my first company called Secure IT. This was started in January of 1997. Was there any nervousness to that? There was less of that, more of conviction of, wow, what could we do if we could build this company and it could start securing everyone?

So the focus was more on what can be done. Now, the hard part was that I failed to raise VC funding. Atlanta was not the best place for funding. And they all would ask me this one question, what startups have you done before? Okay, the answer was none.

So I almost gave up, but it bothered me. So my wife and I kept on talking. The only way to do this startup is if we put our life savings on the line and give it a shot. But then the scary part was, how do you put your life savings on the line? It's easy to talk when the time comes, you know, to make it happen. You go through some thinking. And finally, this is how we made the final decision.

We said, what's the worst thing that can happen? The company fails. We lose all the savings. Then the next question was, can we find a job and start all over? There's tons of confidence that we can do it. So that's how we made the final jump into it. And in hindsight, it was the biggest and the best gamble of our lives.

Could you have done it without her? No, no, I wouldn't. Yeah, she played a big role. She comes from a finance background, so she did all of that stuff. I still don't know how to incorporate a company. How does that apparel benefit none of that stuff? Finance, payable, receivables, all this stuff. So it was a bit scary. You're listening to Business Daily on the BBC World Service with me. ♪

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I'm Will Bain, and today our guest is Jay Chaudhry, the CEO and founder of Zscaler, a multi-million dollar cloud-based cybersecurity firm. So,

That's the teamwork and something of a marriage test that started Zscaler's journey. But what about today? We're about 8,000 employees. Our presence is in 30 to 40 countries is where we have our employees who actually sell our services in those countries. And what we call ARR, annual recurring revenue, is approaching $3 billion. We've grown quite well. We are protecting businesses.

about 9,000 enterprise customers and about 50 million users around the globe. It's a very global business. And this includes some of the largest enterprises, over 45% of Fortune 500 companies, Trust,

Zscaler depends upon Zscaler for their cyber protection. So a product now used by nearly half of the Fortune 500. That's the annual list of the 500 biggest US companies ranked by their revenues. But scaling up Zscaler to reach that number wasn't always straightforward. I would go and try to sell our service to enterprises. This was very early on. A lot of evangelism was needed. And if I talked to 10 of them...

Six will say, it's a crazy idea. My cybersecurity can never go to the cloud. Three will say, it's a wonderful idea, but not for me, at least not now. And one would say, it's great, let's work together. Now you could be disappointed with that, but also I think having passion and conviction plays a very big role.

Cybercrime has of course been a problem since the internet's creation, but in the past few years the number of so-called ransomware attacks, where hackers break into a company's systems and demand cash to leave again, have increased sharply with serious consequences.

And in other news, a cyber attack hit United Natural Foods, one of the largest grocery distributors in the US. The passwords of more than 30,000 Australian bank customers have been stolen and shared on the dark web. Marks & Spencer says it expects disruption from a major cyber attack to continue through to July. I asked Jay Chaudhry whether that change of pace had surprised even him. If you think logically, not at all. Then you think why? Bad guys go where the action is.

so they can get money without working hard. When everything is moving online, it's no surprise that bad guys are going there.

That's where all the money is. That's where all the access is. So it's natural. When you sit and look at what big companies and even medium sized and smaller companies across the world are doing, are we still in a phase at the moment as a global business community where we don't quite take the threat as seriously as we should? Until about four or five years ago, businesses did not take cyber threats that seriously.

In the past four or five years, the number of ransomware attacks has picked up significantly. And where these hackers are shutting down your business, the MERS big attack that happened about seven, eight years ago, this mega shipping company could not run its business for a long time. It's all over. So now

CEOs and boards and head of security, head of IT are understanding how important cyber is. So it's becoming a number one priority. But then the question you ask is, why are companies still getting breached? But that's happening because hackers have no inertia. Large enterprises have inertia. They move slowly.

the technology for security, they're still sitting on firewalls and VPN type of technology. A combination of these factors is causing these enterprises to move slower than they should be moving. But progress is happening. It's a financial arms race to an extent as well, though, isn't it, too? And I just wonder,

Is there any amount of money that we could spend on this that would keep the good side, as you were talking about earlier, of those people using the highway ahead of the bad guys in that race along that highway? Won't the incentives always be there for the bad guys to spend more and more? And actually, it costs less to break in than it does to keep someone out.

Not quite. It's a risk. Companies like Zscaler are able to come up with some good technologies and bad guys find it hard to break into. Sure, you can always find a way around, but this is how you should think about cybersecurity in a layman's term. Your house has no fence around it. Okay. People can wander in and try to do some damage. You start with a four-foot fence around your house. It's decent.

But then you take it to six feet and eight feet and 10 feet. A bad guy can always get it. But climbing and going over a 10 feet fence is not easy at all. So we are raising the bar and bad guys are trying to find some other ways to get it. So you have to

Stay ahead. I think we need to keep on innovating and enterprises need to start embracing those technology at a faster pace than they did in the past because technology is moving fast as AI is coming along. AI is wonderful. AI is dangerous. Now bad guys are using AI and we are using AI to fight back.

This needs people, doesn't it? And again, when you're picking a side for it, it needs really talented people. And those people can come from absolutely anywhere in the world. The history of the kind of technology boom over the last 30, 40 years has told us that, right? That the leaders of a lot of these companies have come from literally every corner of the globe. And yet, as we talk today…

Obviously, the U.S. is an obvious one to our listeners, but actually all around the world, countries are turning inwards, aren't they? Keeping more people out. The idea of workers moving around the world has probably never been less politically popular than it is now. Yes. How dangerous and how damaging could that be, I suppose, to technology as an area going forward? I think it's somewhat of a demagoguery that's kind of driving it.

You know, the business automatically takes care of some of these trends, though it's not easy. The interesting thing that's happening now is that the world is so connected. You do not have to move to a given country to do some of the innovations. You could be sitting in any part of the world, even though the ecosystem does help. For example, Silicon Valley has a special ecosystem. You come to Europe, Europe is not that open.

So it's some of that cultural mindset of the ecosystem that helps people to get moving and try it. But a lot of stuff can be done from different parts of the world. So you're seeing more and more companies being started in different parts of the world as well.

Could it damage those companies and those economies, though, I suppose? Take America and the UK, where I'm talking to you from. Been lots of changes to visa rules here. Could that backfire, do you think? I would say some of these barriers do not help. Higher tariffs and trade hurt everyone. I mean, all businesses are getting impacted to some degree. But, you know, America is a very...

resilient country. Part of the reason America has become so successful because the immigrants, they come from a background where you're hungry, you're driven, you're passionate. I kind of have philosophy that the richer you get, the less hungry you get in general. It's not always true, but in general, people just start taking it easy. Then the next generation

comes in who is kind of the generation that have not seen too much. They tend to go the extra mile and do more than the one who don't have to work hard. And what will keep you hungry personally and off the golf course? Yeah, you know, I thought about it many times. I have been asked this many, many times. I have a fairly simple philosophy. If you love your life, you don't waste your time because life is made of time.

If you don't waste your time, you do something to make a difference in the world. I can go to a beach and I'll be bored after a couple of hours. A la mountains, that's where I was raised. I can go there for a couple of weeks and then you yearn to do something to get back.

So for me, Zscaler is not just a business, it has become a mission. I mean, think of the sense of accomplishment when you say over 45% of Fortune 500 companies depend upon you for doing their business. It's a very, very satisfying thing. So we are focused on making this world a safer place from a cyber point of view.

That's Jay Chaudhry, the CEO, chairman and founder of Zscaler. He was speaking to me, Will Bain, for this edition of Business Daily. The programme was produced by Amber Mechmood and to get in touch with the team, you can send us an email. The address is businessdaily at bbc.co.uk.