Software as a Service or SaaS as its commonly known, has been one of the highest growing industries in India. This is India’s answer to tech revolution taking place in the global markets. As per recent industry reports, the Indian SaaS market is growing at a breakneck speed and giving the global player a run for this money. Some numbers that demonstrate what’s happening:
- Expected to reach $20-25 billion by 2025
- 7-10% of global SaaS
- Revenue growth of 20%
- 18 SaaS unicorns
- 2000 plus SaaS companies as compared to 1000 in 2018
- Funding for Indian SaaS to rise to 62.5% to $6.5 billion
If this is not enough to tell the tale of SaaS in India nothing else is. As India reaches to global scale and quality of software development.
Global adoption of SaaS is increasing as more enterprises and sectors adopt cloud-based infrastructures. SaaS firms formed in India have experienced tremendous development in recent years since digitalization is growing year over year because of a world that is becoming more hybrid.
Many factors had led to the tremendous growth of SaaS in India. Some of them include:
Electronic rails: A variety of significant sectors, including financial services, have developed as a result of the creation of digital railways for huge enterprises (e.g. Aadhar and UPI). This indicates that more than 1 billion Indians have distinct digital identities and that all banks and financial institutions are linked via a single transactional back end that is likewise related to the same identity.
On top of these widely used rails and standards, software businesses are now developing products and solutions for banking and financial services. Other sectors, such as healthcare through the national digital health stack, retail through ONDC, and logistics through eWayBill and FastTag, among others, are all seeing a similar development. Today, software firms may provide goods and services for Indian businesses.
Electronic media: Due to the growth of mobile internet, over 700 million people in India now own smartphones, and like individuals in other countries, they utilise them for both personal and professional purposes. Compared to laptops or desktop computers, cell phones are now used by more individuals in India. Cloud software businesses are developing to create productivity and business enablement applications for mobile devices as smartphone usage for business becomes commonplace.
Cross-Border SaaS: Due to the worldwide pandemic, digitization has accelerated quickly across all industries, which has boosted digital sales of products, services, and software. A new standard for software sales has emerged since almost all cloud software purchases during the epidemic have been virtual (conducted via Zoom or any similar platform). As a result, Indian SaaS businesses may now target international clients from within India without the requirement for a complex worldwide office infrastructure. Because of virtual selling, several Indian companies that are now leading the global SaaS industry, such as Zoho, Freshworks, Browserstack, and iCertis, have experienced substantial growth.
India’s SaaS sector has also caught the interest of the investment ecosystem as these macro trends accelerate.
Roughly $4.8 billion was invested in SaaS startups in India in 2021, a startling 6 times increase from 2018. This is up nearly 3x from 2020. Increased investment for SaaS firms has fueled the emergence of new Unicorns, much as increased funding for U.S. venture-backed companies, as companies obtain additional capital to fuel growth, traction, and efficiency. In the coming ten years, the SaaS industry in India has the potential to rank among the world’s top innovation hubs. With technical and developer skills on the rise, a thriving entrepreneurial environment, and greater venture investment, we anticipate seeing how Indian entrepreneurs expand their companies into the next generation of global Centaurs in addition to becoming household brands for the nation.
Make in India is best demonstrated in this segment. Nothing else comes close to it. India is poised to become the next global SaaS capital (according to an EY/CII study)
(The author is Mr. Anuraj Parameswaran, Chief Technology Officer, Socxo and the views expressed in this article are his own)