Is the Software as a Service (SaaS) Model Suited for India?

Software as a Service

With various SaaS platforms available that businesses can buy, many software vendors have become curious about whether or not the SaaS model is suited for India. This article explains this and briefly covers the advantages and challenges of implementing a SaaS solution for businesses in India. The article also includes some key factors to consider when choosing a SaaS platform for your business.

What is SaaS?

Contents

What is SaaS?…………………………………………………………………………………………………… 1

How does the SaaS model suit Indians?……………………………………………………………………… 2

Advantages of SaaS in India…………………………………………………………………………………… 3

Possible Challenges of SaaS in India………………………………………………………………………….. 4

What can make SaaS viable in India?…………………………………………………………………………. 5

Software as a service is a distribution model of software services over a cloud network. The cloud network provides the software hosting and distributes it to the end-users via the Internet. The software developer may host their product on third-party servers in this distribution model, or it could have it stored on their private servers.

SaaS, along with infrastructure as a service (IaaS) and platform as a service (PaaS), is one of the three basic types of cloud computing. SaaS apps get used by a wide range of IT experts, commercial users, and consumers. Recreational entertainment, such as Netflix, to advanced IT tools, are all available. SaaS products, unlike IaaS and PaaS, get commonly offered to both B2B (business to business) and B2C (business to consumer) customers.

Companies can also combine SaaS apps with other software (APIs) using application programming interfaces. For example, a company can create its software tools and link them with the SaaS product using the APIs provided by the SaaS provider.

According to a recent McKinsey & Company analysis, technology industry analysts estimate the software as a service market will grow even more in the coming years. The market for SaaS products is expected to reach about $200 billion by 2024.

The cloud delivery model gets used for SaaS. An ISV (independent software vendor) may contract a cloud provider to host the application and related data in the software provider data center. A software provider may also host the program and relevant data using private servers, databases, networking, and computing resources. Any device with a network connection will be able to use the app.

As a result, firms that use SaaS applications are not responsible for the software’s setup and maintenance. Users merely pay a monthly charge to receive access to the program, a fully functional solution.

The application service provider (ASP) and on-demand computing software delivery models get closely related to SaaS. The provider hosts the customer’s software and delivers it on demand to end-users via the Internet.

The software provider permits users to use a single instance of the application they access through their web browser or a desktop/mobile app. The software developers create applications that become well suited to SaaS’s distributed platform.

The written code will be the same for each customer, but it will be specific to the needs of every customer. And when the application undergoes maintenance, the servers have to be taken offline for a while. It means the software won’t be available to any user. Take Netflix for example, it adds new movies and shows monthly available to all users depending on their region. But, the shows it recommends will vary depending on your watch history. This data gets stored locally, on the cloud, or both depending on the service level agreement (SLA).

How does the SaaS model suit Indians?

Out of India’s 1.38 billion population, 41% are Internet users. It provides an exciting challenge for software companies to serve these many potential customers with their products. But they also face many challenges. Let’s look at the advantages and challenges faced in establishing SaaS businesses in India.

Advantages of SaaS in India

Since the purchasing power is high due to India’s massive population, the chances of purchasing a SaaS app get significantly higher. It means huge profits for businesses, especially those already established in other countries. These include Netflix, Spotify, and Slack. Even employee surveillance software offers their services via the SaaS model.

  • Reduced Installation and Configuration Times

India has a bustling economy, and the citizens are busy in the hustle of the concrete jungle. So they can’t be bothered with troubleshooting apps. The software (application) gets already installed and configured. You can provide the server instantly over the cloud. In a couple of hours, customers have the application ready for use. It reduces the time spent on installation and configuration and the issues that get in the way of the software deployment.

  • Cheap Service and Upgrade Costs

The costs and effort associated with upgrades and extra features get lower in SaaS compared to the standard software distribution model. The standard model usually forces customers to pay extra to purchase an upgrade. These upgrades are often made mandatory by the publisher. IT makes software licenses expensive for most Indians. Luckily in SaaS, the software vendor upgrades the product and it becomes seamlessly available to all customers. It can be a massive opportunity for many businesses as Indians always love a bargain.

Possible Challenges of SaaS in India

  • Poor Technology Laws

India has poor technology laws. Indian lawmakers and politicians cannot make transparent and feasible changes. It affects how the user data gets stored and handled. It also impacts their privacy.

The topic gets tricky when employee surveillance software or remote monitoring apps come into the picture. These apps often get affected by local privacy laws. Speaking of employee surveillance software, XNSPY is a SaaS spy app that helps businesses surveil their employees so they remain productive and do not share trade secrets with competitors. The app can monitor text messages, phone calls, screen recordings, pictures, videos, and geolocation.

It can be devastating if this data falls into the wrong hands, to someone other than the employee. Handling data of such a large population and keeping it secure is a tough challenge for any company. It is why security laws and server infrastructure needs to get focused when launching a SaaS product in India.

  • Some SaaS can be costly

India has a massive population, but it is still a third-world country. So unless the software vendors introduce regional pricing, most SaaS products will be out of their budget and out of reach financially. And most Indians are quite traditional and despise the idea of having to pay monthly instead of one lump sum amount upfront. So devising a specific payment plan can be challenging for most SaaS vendors, but not impossible. As Netflix and Spotify have regional pricing that is cheaper than most international versions.

  • Lack of Business Talent

According to the SaaSBOOMi research, ramping up crucial talent is the main problem for 77 percent of SaaS leaders in India. Product management, R&D, sales, marketing, and services and support skill pools are all areas where Indian enterprises need to invest more. To stay up with global competitors, Indian companies must triple or perhaps sixfold their talent pools in certain fields.

The importance of talent development cannot be overstated. Best-in-class product managers act as “mini-CEOs” for their products at multinational SaaS companies. Indian companies, on the other hand, rely on engineers-turned-product-managers with great technical skills but lack business acumen. Senior product managers can help their more junior counterparts understand how products fit into the overall strategy by mentoring them.

Most Indian companies and startups are still considering the SaaS model for running their software. SaaS is not a viable option for smaller companies that do not have a dedicated IT team to handle the application, data integration, interaction with other applications, and so on.

What can make SaaS viable in India?

India is a goldmine filled with technical talent and an exponentially growing online economy. The country provides a fantastic opportunity for many already established businesses to spread their wings and expand their services to the subcontinent.

But as mentioned earlier, a lot of challenges stand in their way. Software vendors can have successful operations in India by hiring proactive marketing teams, introducing regional pricing, and handling large datasets daily.