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 SaaS is not as naive to the Indian Small and Medium Businesses (SMBs) as we in the tech field usually think 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.

If you enjoyed reading this post, Subscribe to the feed here ...And never miss a post

Countering the Rising Rupee

With the rupee breaching the 9 year high against the US dollar yesterday by appreciating to 40.23 a dollar, Indian exporters have started frantic efforts to kick off counter measures that can sustain their eroding margins. More so for the Indian IT industry that clocked exports worth $31.4 billion for the fiscal 2006-07. So what are the top 3 players in the Indian IT industry doing to weather the seemingly 'here-to-stay' storm. Short term firefighting Forex Hedging Gains TCS, the number one IT services provides in India, according to analysts, has shown how hedging can help during times like these. While Infosys, the Indian IT bell weather registered a 300 basis point decrease in operating margins (A 1% rise in the rupee against the dollar affects operating margins by 30 to 50 basis points.), TCS maintained its previous quarter performance. TCS had about $2.5 billion outstanding in hedges on June 30. Lower Provisioning of Taxes Declaring lower amounts to be set aside as payable to the tax man at the end of the fiscal is one way in which quarterly gains can be boosted. Lower wage hikes Wage hikes are definitely poised to take a hit. India's IT exporters are now walking the tightrope between escalating wages and the appreciating rupee, not to speak of demanding clients. Lobby with the government to intervene to halt the appreciating rupee Long term adaption Increase services to emerging markets in Gulf and Asia Top IT companies in India differ in terms of their diversity of client geographies. While the US contributes to 63% of Infosys's revenues, TCS has diversified revenue sources ranging from US, Europe, Gulf and even the Indian domestic sector Fill up previously less lucrative spaces like 'Assurance services' in emerging market Domestic testing or 'assurance services', an IT service market at the lower end of the spectrum that the big players couldn't care less about all these years, now has got back their attention. This will lead to some serious competition in the domestic market as the big players prepare to channelize their resources into newer

If you enjoyed reading this post, Subscribe to the feed here ...And never miss a post