SaaS (Software as a Service) industry has been on a boom since the formation of the first SaaS-based company – SalesForce. It is now the seventh largest internet company in the world by revenue hosting a major share in the SaaS industry. The North-American market is the first target of the emerging SaaS companies. Still, the market has so much potential left. However, there is a need to look for a new market in other parts of the world. India seems to be the major target of the SaaS companies now.
India – The New SaaS Market
Since the year 2010, 6500+ SaaS-based startups have started in India, but most of them have their major market in North America. Nearly 80% of their revenue comes from North America, parts of Europe, and the Middle East. But the wind is changing its direction now. India seems to be the new potential market for most of the SaaS companies. According to a report published by Accel partners and Google in March 2017, USD 50billion market waits for the Indian SaaS companies and products. India could contribute to 8% of total global SaaS market.
This report also stated that India is now home to 500+ dedicated SaaS startups that are solely based on SaaS technology. More than USD 850million has been invested in Indian SaaS companies since 2010 and this is the time when a number of Indian startups will be utilizing the potential of the Indian market for selling their SaaS products.
Why Selling a SaaS product in India was difficult?
Earlier, it was difficult to sell the SaaS products to the Indian customers. The lack of knowledge and the fear of privacy loss were the major reasons for low sales ratio. The other reasons that contributed to the cause were:
- Most of the Indians shy away in spending the capital annually on SaaS products.
- Majority of Indian small and medium-sized businesses were the first time users of SaaS applications.
- The customers expected a lot of customizations from a single vendor at the same cost.
- The Indians hated to use the DIY products.
- Delayed payments from the customers were another issue.
Moreover, the customers in the US are much friendlier to the technology startups while the Indian customers are just the followers of technology. But, the trend is changing now. The Indians are learning to adopt technology and this is the right time to for a SaaS enterprise to target the big and small players of the Indian market.
SaaS Industry in India – The Present Scenario
If we talk about the father of SaaS products in India, Zoho will be the top lead. Its SaaS suite serves more than 20 million users worldwide. It was the first company to grab the opportunity to create cloud-based software products in India for the global customers. It started its operations in 2005 and had no competition for SaaS-based products for five long years. But still, the major target of Zoho was North America at that time as most of the Indian firms were not ready to shed their money on a product that they had never seen.
But now, the Indians have started accepting the technology and this has created huge growth opportunities for technology-based startups in India. The growth of SaaS industry in India will be driven by the factors like easy access, convenience, and efficient operation. The low-cost of the product will be the added advantage. The best part is that SaaS products can be deployed on public cloud, hybrid cloud, and private cloud too.
A SaaS survey (2016-17) for the Indian market was conducted by the largest Indian Software Investment Banking Advisory – Signal Hill in partnership with iSPIRIT to learn about the major trends of SaaS industry, estimate the business potential, outline the verticals for the product, calculate the funding raised so far, and provide other valuable information about the SaaS industry in India. The data has been listed in the infograph.
The Indian SaaS industry is the next big thing that has a growth potential of 21% in coming 2years. This growth rate will increase to 32% by end of the year 2022. India is a big market for the SaaS companies to boost their revenues following a good marketing model.
Big Players in the Indian SaaS Industry
- Freshdesk (now Freshworks): Founded in 2010 by Girish Mathrubootham (ex-Zoho employee) and Shan Krishnasamy, Freshdesk is basically a cloud-based customer support software. The organizations can provide support to their customers through websites, mobile apps, email, forums, and social media utilizing the flagships of Freshdesk. It has 50k+ customers around the globe including the major brands like Honda, University of Pennsylvania, 3M, Petronas, The Atlantic, and many such big names from the industry. It is backed by some of the popular venture capitalists including Tiger Global, Google Capital, and Accel Partners.
- Practo: Founded in 2008 by Shashank ND, Practo is a B2C company headquartered in Bangalore. It is the platforms that provide customers with healthcare solutions. The customer can book an appointment at hospitals, find healthcare professionals, get online doctor consultation, order medicines, and get the tests done. Practo also makes the healthcare products that help the hospitals to digitalize and deliver efficient healthcare to patients around the globe. It is backed by the VCs like Matrix Partners and Sequoia Capital.
- Capillary Technologies: Founded in August 2008 by Aneesh Reddy, Ajay Modani, and Krishna Mehra, Capillary Technologies is a CRM company that helps the retailers to engage with customers on mobile, social, and in-store channels. Its AI-powered customer engagement suite integrates just everything required by the retailers to engage with the customers. Some of the major clients served by Capillary are Nike, Puma, Peter England, Pizza Hut, and Mark & Spencer among others. It is backed by VCs like Norwest Venture Partners, Qualcomm Ventures, Sequoia Capital, and American Express Ventures.
The Bottom Line
India is an emerging market for SaaS business. This is the reason why a number of SaaS companies have already shifted their interests to the Indian market to sell their SaaS-based products. The technology is still new to many Indian businesses, but most of them are now ready to adopt this technology. With so many SaaS-startups emerging in the country, it is the right time for the big venture capitalists as well to play their cards.