Software-as-a-Service (SaaS)

According to a research report of NASSCOM, the Software-as-a-Service (SaaS) market in India is expected to triple to about $1 billion by 2020.
About SaaS:

• Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.
• SaaS applications are sometimes called Web-based software, on-demand software, or hosted software. Whatever the name, SaaS applications run on a SaaS provider’s servers. The provider manages access to the application, including security, availability, and performance.

Analysis

• The inherent model of the SaaS business does not require proximity to the end user. In the simplest terms, it is a software that can be accessed through a web browser, by paying a subscription, either on a monthly or yearly basis. The software is hosted exclusively by the provider, as opposed to being downloaded upon purchase and subsequently hosted by the client. The customer gains by spending less upfront, not having to maintain hardware and not worrying about upgrades & data security.
• India’s advantage in engineering, inside sales, product management and mobile skillset creates a highly advantageous opportunity for Indian SaaS businesses to be profitable and scale quickly.
• Cloud computing is one of the top technology investment trends of this decade with venture funding for purpose-built SaaS solution exceeding USD 18 billion in the last four years in worldwide.
• Globally, the SaaS market in 2015 was pegged at $31 billion and expected to growth at 18 per cent annually to $72 billion by 2020.
• Indian startups have an edge, as mobility is also becoming a key requirement by SMBs for SaaS
• Growth in the domestic market is also expected to be a major boost factor for the Indian companies. A deeper dive into the key underlying sectors which are adopting SaaS brings even more attractive prospects to the fore. Healthcare, E-commerce, BFSI and education sectors have been the most targeted segments by emerging SaaS companies. Each of these sectors is expected to expand at a healthy pace in the near future riding on the overall economy’s consumption led growth.
• Indian SaaS companies are not just tapping rich countries. They are now also observing an increasing demand for their products from businesses based in domestic market and developing nations.
• The U.S. and Europe account for more than 80 per cent of the demand for Indian SaaS solutions, according to the report.
• Big players like Salesforce, SAP, Oracle, IBM and Microsoft occupy almost 50 per cent of the global SaaS market.
• Listing out reasons for the shift to SaaS model from on premise software solutions, the research report stated that organisations can shift resources from operational items such as IT to core competencies, reduce IT fees due to reduced amount of services, software and support needed from IT, reduce time and costs to upgrade software since it is handled by third party vendors.

By: Vishal