Software as a Service (SaaS) is a software licensing and delivery model in which the software is made available to the customer over the Internet by a third-party provider. Some examples include the basic email, calendaring and office tools (such as Microsoft Office 365) we use so casually in our daily lives. In simple words, SaaS is a way of delivering applications as a service over the Internet. SaaS customers seldom pay a subscription fee to access the application and they can simply access it over the Internet without going through the painstaking software management. These applications usually don’t need any installation and it offers better storage alternatives.
The phenomenon is global, but India in particular has the room to take its SaaS boost to the succeeding level. These establishments are diverse in terms of their business and revenue models but several shot to global prominence during the pandemic by enabling elasticity for freshly remote workers. For instance, Freshworks offered businesses a seamless customer experience platform, Zoho helped streamline this pivot by providing sales teams with apps for collateral. Zoho and Freshworks spun a mini-revolution within the Indian startup industry as they are now facing world competition in the SaaS industry.
The Covid-19 pandemic has driven tech-savvy companies to significantly engage in SaaS solutions in order to accelerate their IT modernization and measure their businesses. The IT overhaul will enable organizations to not only cut short costs but endure growth in operations and completely manage the assets of the company remotely. According to an article by Business Insider, ten new unicorns have developed during the pandemic, including Postman, Zenoti, Innovacer, Highradius, Chargebee, and Browserstack, as well as Mindtickle, Byju, UpGrad, and Unacademy.
According to a poll conducted by McKinsey, more than 90% of B2B businessmen believe that the remote and digital model adopted during the pandemic will persist in the long run. In the new unwarned atmosphere created by COVID-19, several SaaS firms have prospered due to the emergence of the need for an online replacement by the firms. Online collaborative platforms meant for B2B or B2C businesses, telemedicines, gaming platforms and especially streaming platforms are operational on their all time high peaks, and this is expected to be the ‘new way of living’ after the pandemic. SaaS was the ideal option for industries to transition to online space and move to the cloud to keep up with the unstable dynamics during the pandemic.
Talking about the rapid technological advancements happening in India, the Indian SaaS sector has the potential to bring about $ 1 trillion in value in the country in the ensuing nine years, that is, by 2030. Further, it can create five lakh new jobs during the period. The Indian SaaS sector has although not reached its full capability but it has definitely gained significant grounding. The brisk digitalisation and particularly the growth potential in India has boosted the startup culture and SaaS is one of the preferred choices among investors and entrepreneurs. The digital- go-to market, no initial upfront and management costs, low upkeep, ease of access and flexibility are a few of the multifold reasons why India is a favourable environment for SaaS companies. However, according to the SaaSBOOMi report, ramping up crucial talent is the largest obstacle for 77 percent of SaaS leaders in India. Companies in India must invest more in product management, research and development, sales, marketing, and services, as well as support talent pools. To stay up with global competitors, Indian companies must triple or perhaps sixfold their talent pools in certain fields.
Select notable Indian SaaS firms, such as Freshworks, Browserstack, Gupshup, HighRadius, Chargebee, and Innovaccer, are even surpassing their US peers in terms of capital efficiency, according to a recent benchmarking report by Bain & Company. This makes it appealing to a wide range of PE/VC investors, which explains why Indian SaaS companies have attracted such a diverse group of investors. The significant competitive advantages that Indian SaaS businesses have over their worldwide colleagues — low-cost structure and frugal mindset, depth and abundance of engineering talent, good customer service, and growing salience of products from Indian founders — have all contributed to this.
AUTHORS- Aditri Srivastava, Iqra Akhlaq
