SaaS Growth to Drive and be Driven by SMBs

While researching on the advances SaaS (Software as a Service) has made in India two things struck me hard in the face

  1. SaaS is not as naive to the Indian Small and Medium Businesses (SMBs) as we in the tech field usually think
  2. The major SaaS providers in India are still North American companies, examples being Microsoft, WebEx in the area of collaboration, etc.
A recent survey by SpringBoard revealed statistics that predict jaw dropping numbers in terms of SaaS adoption in India. There is also news of Indian players slowly but surely waking up to the SaaS reality. While ASP ( Application Service Provider) concept failed, SaaS, a similar refined concept, was initially discarded as a old wine in a new bottle. However, it seems to have more than just teeth in its bite.

Indian Majors like NIIT, TCS are announcing SaaS initiatives. TCS announced a complete new model that they christened 'IT as a Service'. Infosys announced a 'SaaSified' version of their popular Finnacle financial product for banks and other monetary institutions. With former revenue taps running dry, it is just a matter of time before Indian IT majors announce their own SaaS initiative to tap the predicted $168 million SaaS market of India by 2010.

SaaS will affect Indian growth in a huge way. Its single most unique advantage of not forcing companies to produce upfront capital for their IT investment will mean that a slew of Indian SMBs will now embrace IT like never before. IT adoption in India will fuel SaaS growth and that in turn will fuel more IT adoption. Its a symbiotic cycle that's getting setup. Its only a matter of time before the wheel starts spinning in full vigor.