This article is written by Gursimran Kaur Bakshi. The article explores the future of the software as a service (SaaS) industry in India.
In layman terms, cloud computing is an on-demand delivery of IT resources through the internet. It allows the delivery of computing services which includes server, storage, database, networking, software, and analytics to name a few. It is different from the premise-based technological infrastructure. It offers flexibility to the workplace to pay only for cloud services that it requires rather than setting up the whole system.
Cloud computing services can be modified as per the business requirements of a workplace, as its usage would depend on the specific requirements of the same. However, with its increased demands, the understanding of cloud computing services have become complex and multi-faceted. But that does not subdue the importance of cloud computing services which are adopted to increase scalability and availability of applications to suit different types of the work environment.
There are three different types of cloud computing (private, public, and hybrid). In the public type of cloud computing, the computing services are owned and operated by a third-party cloud service provider. A known example of public cloud computing is Microsoft Azure, which delivers computing resources over the internet. A private cloud is exclusively owned and operated by a single workplace. Whereas, there would be workplaces building their own private cloud infrastructure and availing public cloud computing services. This is an example of hybrid computing.
Cloud computing service is also divided into three types [Infrastructure-as-a-Service (IaaS), Platforms-as-a-Service (PaaS), and Software-as-a-Service (SaaS)]. Out of the three, the SaaS-based cloud computing industry is all over the internet. The SaaS is one of the types of cloud computing services that allows the service provider to avail of on-demand computing resources through the internet infrastructure. Since cloud computing services offer easy and customised access to IT infrastructure to the users, the industry has grown rapidly. This is especially true for India where the changes have been rapid despite the overwhelming impact of the COVID-19 pandemic on various aspects of the IT industry.
Future of Indian Software-as-a-service industry (SaaS)
In India, the demand for the SaaS-based industry has seen transformative growth despite the overall economic slowdown. According to a report titled ‘Shaping India’s Saas Landscape’, India’s SaaS-based industry has the potential to be valued at $ 1 trillion. By 2030, the industry is expected to employ more than 500,000 people. According to the abovementioned report, the pandemic situation has forced digitisation and has led to the growth of the SaaS industry which may reach $1 trillion and may also create 5 lakh jobs by 2030. A report published by NASSCOM and the SaaS community SaaSBooMi and Mckinsey suggests that the global SaaS market is expected to cross $500 billion in revenue by 2025.
India has currently more than 1,000 SaaS startups and 10 unicorns (a privately held startup company valued at over $1 billion). At present, India’s SaaS-based industry generates a combined $2-$3 billion annual revenue. It also employs nearly 40,000 people and hence, generates 35% of the software revenue in India.
Further, India has some SaaS unicorns which are Postman, Zenoti, Innovaccer, HighRadius, Chargebee, Icertis, Druva, Freshworks and BrowserStack. These are unicorns based in India or have originated in India. Indian’s unicorns are expected to grow ten times more than what they are today by 2030. It is expected that the SaaS-based industry’s expansion will happen exponentially as the needs of the current marketplace heavily depend on internet-based services.
What are the leading SaaS-based startups in India
There are SaaS-based startups that are striving in the Indian market right now. Some of these are given below in brief.
Agile CRM is one of the leading SaaS-based companies serving small and medium enterprises through its comprehensive customer relationship management (CRM) platform. It allows organisations to automate sales and marketing services. The support offered by CRM is end-to-end and allows the user to manage issues at every stage. Agile CRM also has a global presence.
BrowserStack is an Indian-based cloud computing service platform that offers software applications through the internet along with the cloud infrastructure.
CleverTap was founded in 2013 to raise Series C funding (this type of funding is given by the investor at the growth stage of a startup when the growth of the business is visible) from Sequoia India and Tiger Global Management. It is a mobile marketing platform that supports businesses to retain, engage, and develop valuable relationships with customers. The platform has a wide range of features such as automated segmentation, audience analytics, and campaign optimisation.
Chargebee was founded in 2011. It is a billing and subscription management platform. It enables organisations to automate billing, manage subscriptions, and streamline revenue operations. It has received investment from Tiger Global Management and Accel Partners. In 2018, Charegebee received a Series C round of funding of $18 million from Insight Partners.
Druva provides data protection and management services for cloud-based services. It also allows for autonomous enterprise data resiliency.
Freshworks is one of the most known SaaS-based startups in India which was founded in 2010. It has developed a cloud-based suite to provide SaaS-based services to the customer. It has received investment from Accel Partners and Tiger Global management.
HackerRank provides a platform for technical interviews designed exclusively to hire developers and that is why it is widely used by recruiters to find a candidate for their concerned organisation based on their needs.
HighRadius is an Indian-originated SaaS-based platform that is currently based in Houston, Texas. HighRadius joined the unicorn club in 2020 when it raised $125 Million Series B growth funding which was led by ICONIQ Capital, Susquehanna Growth Equity, and Citi Ventures. HighRadius is a SaaS-based provider for automatic payments and integrated receivables such as credit, cash applications, deductions, and payments.
Hotelogix was founded back in 2008. It is considered the best SaaS-based platform for the management system of property for hotels. The platform has a wide range of tools such as front-desk operations, housekeeping, restaurant operations for the effective functioning of the hotels.
Icertis was declared an Indian-based unicorn along with Druva in 2019. This SaaS-based unicorn is a contract management software provider. .
Innovaccer recently joined the unicorn club by becoming the first Indian-based health-tech platform. It is responsible for analysing healthcare data to provide information to the healthcare providers for better facilitation of healthcare services. Its Healthcare Data Activation Program is a flagship SaaS-based product that allows the workplace to gain insight into the healthcare data of the patients.
KekaHR allows users to manage their performance and payroll in an organization. Not just this, it also allows recruiters to engage in talent management. Currently, it has added another service called productivity tracker. It is designed to promote work from the home culture at the same time maintain transparency in employment and productivity.
Kissflow is for those who are looking to manage their business. This one single platform allows the organisation to manage almost everything from the workflow to how the clients are to be dealt with. This platform is used by more than 121 countries and thus has an established global presence.
Whatfix is a platform designed to provide performance support and in-app guidance for software applications.
WebEngage is a customer data platform used for engaging users in customised campaigns. It allows users to engage in various features on the internet such as email checking, on-site notifications of the web portals, in-apps, including SMS services.
Advantages and disadvantages of the SaaS-based industry
- The first and foremost advantage of SaaS is that it offers flexibility to manage databases, servers, storage etc online which means that the infrastructural cost is minimised. In cases where workplaces depend on a physical IT ecosystem not just the infrastructure but also the maintenance cost is incurred. This is minimised in SaaS-based products.
- In SaaS-based services, the workplace does not have to worry about installation issues that are there when software services are availed through traditional methods. The SaaS-based services come pre-installed and can be customised according to the needs of the workplace.
- While setting up a physical IT ecosystem, it is not possible to be selective in availing services. These basic issues are tackled through SaaS-based computing. The workplace with SaaS-based products can purchase as per their needs and buy for the same.
- Further, the management issues regarding SaaS-based services are not dependent on the workplace. They can only care about the service they are receiving and worry no further.
- Since India is still tackling the health emergency, the SaaS-based industry can be used in the health sector. India’s spending on the health infrastructure is not up to the mark but it can be improved if the hospitals are equipped with SaaS-based technology. This will not just generate employment but also help the hospitals deal with patients effectively.
- Adopting SaaS-based services is internet-based and can suffer from potential cyber issues. Thus, cybersecurity becomes a major concern.
- Although the flexibility offered by SaaS-based computing is incredible, many are still struggling with the issues of internet accessibility in India. Thus, SaaS-based computing services can only be availed by a limited number of people in the IT industry.
- With SaaS-based services, there is an overall lack of control. This also has a direct impact on managing sensitive information. So, data security will always remain a pertinent concern.
With the rapid increase in digitisation, it can be seen that the Indian SaaS industry is effectively responding to the growth and demandS of the global market. It is crucial that the investment in the SaaS industry is made especially at this time when the world is going through a global health emergency. This may help in generating revenue, boost the IT sector, and give employment. But more than anything, what is required right now is consistent investments in Indian startups. Since many of India’s saas-based investments are unicorns and have crossed the 1$ million revenue generation, the right step now would be to allow them to grow by giving them financial incentives. This is the need for an hour in the present-day workplace.
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