India - the next global SaaS capital??

India is home to about 100-plus unicorns across different segments with an accelerated pace of entrepreneurship and is rapidly emerging as a hub for SaaS start-ups. India is poised to become the next SaaS capital over the next few years, mainly driven by Small and Medium Businesses with a focus on large enterprises.

The Indian software-as-a-services (SaaS) market is expected to grow multi-fold by 2025, accounting for almost 7 to 10% of the global market from 2 to 4% currently. According to industry estimates, the market is expected to reach $20-25 billion by 2025 from $4-7 billion in 2020.

A study highlights operational characteristics owing to which the Indian SaaS industry is growing at an accelerated pace. According to the study, over 80 per cent of the SaaS promoters who contributed to the report feel there is the need to build a robust talent pool; 50% of SaaS providers feel driving greater awareness for SaaS products continues to be a prerequisite for customer acquisition.

The Chiratae-Zinnov India SaaS report for 2022 stated that by 2026, the Indian SaaS market will generate $100 billion in sales and that India may even pip China as the world's second largest SaaS nation in the next few years.

Usage of SaaS becomes very attractive with its predictable revenue stream, high growth outcomes and recurring nature of business. Also, there are several segments and sub-segments emerging in which SaaS is becoming important. In general, a big reason also has been the overall growth in digital adoption and ecommerce which requires a lot of plug-and-play and SaaS solutions.

With the demand for SaaS products going up, there has been a surge in the number of players fighting over the same market. There is also a consolidation trend which will possibly continue with most companies either ending up getting acquired or failing to survive due to their inability to offer any differentiation.

SaaS products have used the internet to entirely remove the on-site implementation. They have used smartphone apps to simplify communication and collaboration and they have used artificial intelligence to provide actionable insights and more. “India is not just building for India. India is building for the world and it is building high-demand SaaS products.

The popularity of Software as-a-Service (SaaS) applications have grown immensely in recent years. A report from Cloud Security Alliance (CSA) revealed that over 63% of the respondents admit that SaaS misconfiguration is to blame for the surge in security incidents. At the same time, organizations should also have a disaster recovery plan to imitate services and data that could get lost if disaster strikes.