SaaS players to look at innovative channels: Zinnov

Indian IT players who offer software as a service model (SaaS), are required to look at innovative channels to engage with customers and grow their business, according to a new study by management consulting firm Zinnov.

The study says that even though SaaS seems to be the hottest subject of discussion among Indian IT decision-makers today, it is not a very new concept. “The market is still very nascent and a lot of aspects need to be put together to get the market to the next level,” it added.

The challenge as well as the opportunity for SaaS players in India is to continue educating the market about the benefits that SaaS can provide to its end users. The Indian economy, driven by rising domestic consumption and exports, expanding broadband infrastructure, and increased internet penetration among SMBs, will make the country a significant market for SaaS applications, the report said.

The current market size for SaaS in India stands at $50-56 million. The three elements such as collaborative applications, customer relationship management and enterprise resource management, together contribute 80 per cent of the market, said Zinnov.

Some of the major challenges that SaaS providers face in India currently are lack of knowledge about Indian workflows and lack of IT support. “Despite some of these constraints, we believe that the market will grow exponentially if aspects like growing basic internet infrastructure, unique business model innovations, pricing and support innovations are addressed in a phased manner,” said Chandramouli, Director-Advisory Services, Zinnov.

He said telecom providers would play a very crucial role in driving the growth of SaaS market.

“It will primarily be a combination of both push from Saas players and a pull from CIOs in the market,” he added.