Software as a Service (SaaS) has become a crucial part of businesses worldwide, driving both cost & revenue efficiencies, worth billions of dollars. As COVID-19 has seen faster digital adoption across businesses all over, Indian SaaS companies, too, have made their place. According to a recent NASSCOM report, the size of the SaaS market is growing at 22.6% CAGR, globally. As for India, over just the past five years, it has gone from a basic SaaS ecosystem to more than 1000 SaaS start-ups, out of which more than 150 have surpassed US $1 million in revenues.
This progress & success can be credited to an extensive base of skilled engineering talent coming from a big IT services workforce, capital efficiency by getting competitive products to the market at a fraction of the cost in western markets and admirable 24x7 customer support. Plus, with the Aatmanirbhar Bharat Abhiyan vision, Indian SaaS companies are developing and selling their own applications in place of outsourcing it.
While the COVID-19 pandemic has been and is still an extremely challenging time for industries all over the world, it has made available endless prospects for SaaS modernisation; enterprises & small- and medium-sized businesses (SMBs) that were working towards their digital transformation journey for the long-term, had to jump into this move instantly, which has surely helped them. To speed up this alteration of moving services to the cloud or incorporating software to the business, SaaS has positively been there as an economical & effective key.
Moreover, this is also a vital period for SaaS start-ups as it produces just as much an opportunity for their progress. They too, are supplying to the evolving needs of the global markets and there has been mounting attention being given to enable the flourishing SaaS start-up system both from large corporates & VCs. In fact, even businesses that have a long and fruitful history of making use of other models are experimenting with SaaS.
SaaS companies established by Indian entrepreneurs are poised to reach US $18-20 billion in revenue, with the potential to capture 7-9% share of the global SaaS market by 2022, a report by Bain & Company said last year. Many top global tech companies, like Google, Amazon, Microsoft, etc, have their major R&D centres outside the US in India, identifying cost advantages while working towards creating outstanding product management & design and engineering talent that is now plunging into start-ups, chiefly in SaaS.
India is getting ready for the next wave of SaaS start-ups that are achieving their model locally and are going to swiftly magnify into the world market. SaaS is strongly replacing other software segments like Customer Relationship Management (CRM), Point-of-Sale (POS) systems and Enterprise Resource Planning (ERP). And moreover, it is certainly here to stay, with the Indian SaaS sector to become really self-learning.