SAP sees the Indian small & medium enterprises (SME) sector as a huge market for its new version of software applications. The software application provider is adopting a partnership model to tap into the higher volumes of the market in tier-II and -III cities. For SAP, mid-market accounts 70% of its customers globally.
?In India we are looking at partnership models because it is a channel-based market. We are in talks with partners in the tier-II and -III cities and will be finalising some deals by the end of the year,? said Rohit Madhur, director, Business ByDesign, SAP India. Globally, the company has tied up with 100 partners in six countries.
In Asia Pacific, India is the fastest growing software as a service (SaaS) market, which is estimated to register a 60% CAGR from 2008 to 2012. According to Springboard Research, the SaaS market is expected to be around $352 million by 2012.
With SaaS, a provider licences an application to customers as a service on demand, through a subscription, in a pay-as-you-go model. Initially, it was adopted for sales force automation and customer relationship management. But now, it?s a common requirement for any service-oriented business model.
A report by consulting firm Access Markets International Partners reveals the overall spending on IT by small and medium businesses in India totalled $9.9 billion last year and was predicted to rise by over 8% this year.
In India, while more SMEs will be adopting SaaS-based models, adoption will be confined mostly to internal departments in large organisations. ?The adoption of SaaS in the mid-market is almost three times the on-premise market,? said Madhur.
?Seeing the current penetration on the application side, which is still in single digit, there is a lot of business potential in the mid-market. We are looking at professional services companies like IT services, consulting, biotech, financial and engineering services companies,? he said.
SAP had a 57.2% market share in the enterprise resource planning space in India and 34.9%in the customer relationship management (CRM). It controlled 32.5% market share in the business intelligence space. Industry experts feel SaaS market in India is seeing further growth due to the increasing interest and foray by telecom service providers as delivery partners.