On-Demand CRM Apps for Indian SMEs

by Sonal Desai    Feb 11, 2009

While the alliance is a good move in the emerging on-demand CRM services sector, it will also drive competition and growth of Indian on-demand CRM market across small, medium and large enterprises. This would also expedite the entry of international players providing open source on-demand solutions in India, which would offer lower risk and affordable cost to the customers. This would make incumbents with proprietary model revisit their business approach.

SugarCRM said its solution offers customers greater control and lower risk for their CRM deployment by delivering its solution over the Web via the cloud or software-as-a-service (SaaS) model. By partnering with SugarCRM, Tata Communications will manage this service out of its datacenters.

As SugarCRM has open source on-demand model, it provides high quality flexible and more affordable solutions, which implies that now Tata Communications is equipped to address SME segment, which otherwise would not have many options with proprietary model. It would also help justify the investments to CIOs belonging to large enterprises who would be frugal in the times of slowdown. Overall, it helps to increase Tata Communications’ market presence in managed service arena, said Santosh Kumar Sinha, Industry Analyst, ICT Practice, Frost & Sullivan, South Asia & Middle East.

According to him, SugarCRM now has an opportunity to penetrate Indian market by leveraging the market reach and managed services expertise of Tatacom existing client base and unlock the SME segment value.

"The market for on-demand CRM in India is over Rs. 150 crore ($32 million) in 2009 and is expected to grow at a CAGR of 50-60 percent for the next few years," said Alok Bardiya, vice president, partner and alliance strategy, Tata Communications, in a statement. Sinha said that the estimated market size of on-demand CRM applications was $48 million in 2008, growing at a CAGR of over 40 percent. On-demand CRM application accounts for approximately 70 percent of this market and it is expected to grow at a CAGR of over 50 percent.

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