SaaS: A disruptive solution for India?
Date: Monday , September 01, 2008
'Is SaaS, an elephant in the room for outsourcing providers?' or 'SaaS being good for some of the successful companies, will it work for others' are the concerns that arise in the industry. But still debates are going on that 'what is good for the goose may not be good for the gander.'
Bharath Goenka, co-founder and Managing Director of Tally solutions, Bangalore-based financial accounting software company says, "If you look at the poster boys of SaaS like Salesforce.com, they were successful because they catered to segment of a market that required centralized data because of mobility of the users. SaaS vendors who catered to customers where centralized data or mobility was not required actually did not get healthy traction. For SMBs in India, centralized data or mobility is not a priority right now. What's going to work in this environment is providing software as a license. SaaS perhaps might work in the consumer segment, where individuals are the users."
On the contrary, a Springboard Research states that the Indian SaaS market is projected to grow at a compound annual growth rate of 77 percent from 2006 to 2010, to reach $165 million by 2010. The research finds that ease of use and management are the top SaaS drivers in India, and an indirect sales channel is emerging. A buoyant Indian economy, driven by rising domestic consumption and exports, expanding broadband infrastructure, and increased internet penetration among small and medium businesses (SMBs), will make India a significant market for SaaS applications.
"While more and more SMBs are adopting SaaS based models, in large organizations adoption will be confined to internal departments," says Shaliesh Kumar, VP Engg, AdventNet Development Center India. The bundling of multiple softwares using SaaS will create more value and drive the SMB market. "It is like a 'Thali' offered by restaurants, which solves lot of decision-making challenges," says Srikant Rao, CEO, Affordable Business Solutions, during the second annual NASSCOM Product Conclave. However, the challenge for this market to take off is the awareness of SaaS among SMBs, which the panel emphasized.
Sharad Sharma, CEO of Yahoo! India said, "SaaS could be the way to go to reach out to the larger mass of small and medium businesses because SaaS is a pull based selling rather than push based selling. In addition it solves the issues around piracy as well. The customer benefits from price point of the software being lower and the vendor benefits as the cost of acquisition lower."