The market for hosted-software services, also known as ?software as a service? or SaaS, can become an alternative channel of sales for software companies over the next couple of years, although the business is yet to take off in India.
Foreign software majors like the $5.6 billion Symantec and the $1.5bn Business Objects are looking at the Indian hosted market, which, they believe, can provide them with good revenue streams.
In this model, software companies host their software on their data centres and corporate users use the software according to their needs. It is the ?pay and use? model as against the software ownership model where companies pay the price of the software as well as a licensing fee.
Symantec, a US-based security and anti-virus major, has already launched the hosted services business at home, and is here looking at the online backup business, according to Vishal Dhupar, Symantec?s managing director for India and SAARC.
Paris/ San Jose-based Business Objects, a business intelligence software major, has set up a research centre in Bangalore and is now looking at the market.
At present, enterprise software majors like SAP and Oracle are offering some of their solutions as hosted services. Oracle has taken an initiative in the on-demand space including CRM on-demand and the launch of hosted Oracle ERP software along with Pune-based Zensar.
In India, the Euro 9.4 billion SAP is already offering a customer relationship management suite, as an on-demand service to corporates.
SAP is also planning to launch a full on-demand suite named Business byDesign for the Indian market for the small and medium enterprises by 2008, a SAP spokesperson said.
Keith Budge, senior vice-president & general manager of Asia Pacific and Japan of Business Objects, said the company will decide the road map of hosted market by early next year.
?I believe there is a market waiting for us to be explored. I can?t quantify but there is an opportunity waiting for us,? said Budge.
Praveen Sengar, manager, software & services research at IDC India, the IT research company, said he expects the SaaS market here to grow in one-and-a-half years to two years.
?Major application vendors like SAP, Oracle and Microsoft will expand their SaaS offerings with a broader range of applications and greater scalability, setting the stage for more partners delivering complementary solutions via the SaaS model,? said Sengar.