The SaaS ecosystem has been resilient with cloud usage soaring and companies going digital to enable technologies that fuel the massive shift to remote working and virtual innovation.
- By Sanket Atal
Over the years, I’ve witnessed the industry transform with the introduction of disruptive technologies. A disruption that has been around for a while but is gaining tremendous momentum now is Software-as-a-Service (SaaS). There has been a surge of businesses embracing cloud-based models as it has become imperative for success. But we have barely touched the tip of the iceberg of the SaaS revolution. The increasing adoption of SaaS is on the foundation of the ubiquity of the internet and the availability of attractively priced cloud platforms. Globally, the size of the SaaS market, which stood at $100 billion in 2019, is growing at 22.6 per cent CAGR, according to a recent NASSCOM report. Moreover, the report also states that the domestic market for SaaS India is likely to expand 6x to $13-15 billion by 2025.
Along with all its challenges and uncertainties, COVID-19 has also provided unending opportunities for SaaS innovation. Enterprise and small and medium-sized businesses (SMB), who were planning their digital transformation journey as a long-term, phased approach, were plunged into this shift overnight, which has certainly benefited them. To accelerate this shift of moving services to the cloud or integrating software to the business, SaaS has definitely been a silver lining as a cost-effective and efficient solution.
I strongly believe that the next two years will be an opportune time for Indian SaaS companies, as the markets open-up and digital adoption continue to fast-track. This is also a pivotal time for SaaS startups as it creates an equal opportunity for their growth as well.
SaaS emerging as key growth driver
Since its inception, SaaS has largely been driven by customer obsession, quick decision making, and cost-effectiveness. The risk involved with maintenance, implementation cost, and security is minimal and hence, making an attractive proposition. In India, SaaS companies have done well due to a variety of reasons:
- Smarter customisation and implementation for a diverse customer base
- The rise of deep-tech startups with their passion to innovate, create new solutions leveraging the quality talent available
- The combinatorial power of other emerging technologies such as Artificial Intelligence, Machine Learning, Natural Language Processing & IoT
- With the availability of cloud platforms like AWS, and access to better and cheaper internet connectivity, building new SaaS applications has become affordable
- With the vision of Atmanirbhar Bharat (Self-Reliant India), Indian SaaS companies are developing and selling their own applications instead of outsourcing it
Opportunities for startup ecosystem
Apart from the plethora of opportunities that are brewing here in the country, Indian SaaS startups are also catering to the changing needs of the global markets. The startup ecosystem will continue to grow its footprint globally, unlocking a treasure trove for India’s future. Interestingly, there has been a rising interest in empowering this burgeoning SaaS startup ecosystem both from large corporates and VCs.
The NASSCOM report also indicates that the funding in India has grown by 15 per cent over the last three years, and 2020 alone saw six SaaS unicorns emerge, which are expected to grow exponentially in the coming years. There is a wide untapped market that SaaS startups can dive into, across industries in India and also developed markets such as Europe and North America.
Scaling further with collaboration, integration, community
The SaaS ecosystem has been resilient with cloud usage soaring and companies going digital to enable technologies that fuel the massive shift to remote working and virtual innovation. The need for smooth integration of data and business processes can be achieved with SaaS offerings. Furthermore, collaborating with partners will enable out-of-the-box and customized integration, along with improved user experience, ultimately giving the customer exactly what they need. The Indian market offers immense opportunities as sectors including healthcare, fintech, and e-commerce are adopting technology into their systems and have begun to leverage cloud computing to drive communications and collaboration to a greater degree.
Another important aspect to consider is the need to form communities so as to enable the whole industry to scale and thrive together. Being a part of a SaaS/tech/startup community opens up abundant opportunities that will facilitate business growth and knowledge for startups through smart-tech.
The current yield of Indian SaaS startups has the promise to take on their global counterparts directly. They are well-equipped to grow into larger enterprises. Entrepreneurs need to capitalize on every opportunity presented to them and empower the industry to embrace SaaS in every core business process. This pandemic has given the industry a much-needed boost. India is gearing up for the next wave of SaaS startups who are perfecting their model at home and are going to quickly expand into the global market.
Sanket Atal is the Managing Director of Intuit India. Views expressed are the author’s own.