The path forward for India’s SaaS revolution

As India’s Software as a Service (SaaS) industry evolves at an unprecedented pace, Praval Singh, VP of Marketing & Customer Experience at Zoho Corp., shares his insights into the industry’s trajectory and prospects.

In your view, how will emerging technologies like AI, Edge computing, and blockchain shape the future landscape of the SaaS industry in India?

AI will enable SaaS platforms to elevate user experience with better personalization, and also automate, to a good degree, processes such as customer support. This is not to replace human beings, but rather augment their abilities and empower them with contextual information that helps improve customer satisfaction and also reduces operational costs. Not just that, AI can help with better analytics for forecasting, decision-making, and anomaly detection.

The biggest benefit that Edge computing offers is bringing data processing closer to the users, in turn making SaaS applications work faster and more securely. This would also bring down bandwidth costs significantly as data can be processed locally. Blockchain, on the other hand, enables robust and resilient SaaS platforms via decentralized data management—something that’s at the core of blockchain technology.

AI can help with better analytics for forecasting, decision-making, and anomaly detection.

These technologies together will enable more and more industries to adopt SaaS platforms and drive better efficiency in their business processes.

For established SaaS companies, how do you see your role evolving in the face of industry maturation, and what strategies will be crucial for staying ahead of the curve?

Companies like ours face the challenge of maintaining strong differentiation and offering the best value to customers. In the current economic environment, this becomes even more critical. Below are a few strategies and cultural values that help,

a) Investing in R&D to build technology that not only effectively solves the challenges of large businesses but is also affordable in the long term. This is achieved by being obsessed with customer experience and building unified software suites.

b) Building with and for a strong ecosystem. This means making our solutions interoperate with other tools and systems via APIs and contextual integrations. It’s also important to build business development pathways for other tech vendors to work with us.

c) Global expansion and being close to the customer. Building a local team across key regions and serving customers locally—both directly and via the partner ecosystem—is critical. At Zoho, we refer to this growth strategy as transnational localism, an approach wherein you’re globally connected by culture and shared knowledge but locally rooted in the community you’re present in.

d) Talent development is another key area of our focus. Instead of acquiring talent, we look at taking opportunities to non-metro towns and villages and upskilling and nurturing local talent.

e) Focusing on security and privacy. Strengthening data security measures to protect against cyber threats and ensure customer privacy is not just a slogan but something that’s at the core of who we are and how we run business.

What challenges and opportunities do you foresee for the SaaS industry in India, and how can stakeholders collaborate to overcome obstacles and foster sustainable growth?

The SaaS industry in India, while burgeoning and full of potential, faces a set of unique challenges and opportunities. If I look at challenges, the biggest ones include getting the trust of businesses to adopt cloud technology solutions. It is not just about intent, but also education, adoption, and costs. Many of these businesses (esp. MSMEs) are yet to start their digital transformation journeys. Secondly, while the potential of SaaS adoption is high in India, the cultural and linguistic diversity makes it hard to drive demand from tier 2 and 3 towns. Lastly, while broadband and LTE penetration has increased, stable Internet connectivity and power supply can still be an issue in several areas.

SaaS companies, including those from India, are increasingly playing a pivotal role in the global software and technology landscape.

In terms of opportunities, India has the best of SaaS talent in the world and companies that have cracked global GTM from India have done quite well. This also enables companies from India to expand globally and serve international markets with a much better cost arbitrage. The opportunity to have millions of MSMEs ready for digitization is itself a big one. Lastly, SaaS has the potential to offer affordable technology solutions, and hence businesses that have an eye on profitability (and not just valuation) can pass on the benefits to the end-customer, hence making tech solutions affordable.

In the context of data security and privacy concerns, how are SaaS companies preparing for and addressing potential challenges to ensure a secure and compliant future for their users?

SaaS companies are increasingly seeing cybersecurity as a critical function. Everything from secure best practices to security audits is rolled out to identify and mitigate risks. Robust data encryption and threat detection are also being implemented to safeguard customer data. Compliance regulations such as the GDPR and demand for transparent data policies only push companies further to take this more seriously than ever.

Another way in which SaaS companies are ensuring cyber safety is by bringing in strong identity management and user access control. Multi-factor authentication tools and others play a critical role here. There’s also focus on setting up disaster recovery and redundancy capabilities to offer stable SaaS solutions to businesses. Lastly, employee awareness initiatives, training programs, and certifications play a crucial role in preparing an organization.

The subscription-based model has been a key feature of SaaS success. How do you foresee pricing models evolving in the future to cater to diverse user needs and market demands?

SaaS is known to adapt to market demands. As the needs become more diverse and newer industries adopt SaaS tools and platforms, we’ll continue to see newer pricing models beyond the typical tiered pricing slabs.

One of them is usage-based pricing, which would depend on how much compute/resource an organization is using instead of the number of licenses or seats. Other models could be priced add-ons based on roles, needs, features, and integrations, or bundled pricing for tools that are packaged together for better value.

With the globalization of businesses, how do you envision SaaS companies adapting to and influencing international markets, and what role might India play in shaping the global SaaS landscape?

SaaS companies, including those from India, are increasingly playing a pivotal role in the global software and technology landscape. Their adaptation to and influence on international markets involve several key strategies and trends.

1) Paying attention to regional needs: One of the most important ways in which Indian SaaS companies can gain a lot more relevance in international markets is by offering localized solutions with scope for customization. Customers worldwide increasingly ask for solutions that cater to their specific needs in the region and industry; this includes but is not limited to language translation. Complying with local regulations is also part of this.

2) Building a strong channel partner ecosystem: Forging strategic partnerships with local experts and businesses, and leveraging their market expertise, is a proven way of playing in newer markets.

3) Compliance mandates: Complying with global standards and data protection regulations (such as the GDPR) is key to global expansion.

4) Building local teams: Working with local talent is a solid long-term strategy to serve an international market with a shared ethos and culture.

Concerning India’s role in shaping the global SaaS landscape, India is already a global SaaS capital with a lot of tech talent and the right mindset. This also creates a good ecosystem and community of SaaS workforce in India. The country, aside from producing affordable world-class software for global markets, also continues to serve as an active hub for R&D projects and technology building.

Indian SaaS players are already serving global enterprise customers with competent technology solutions. In fact, at Zoho, we continuously work with large enterprises across regions on large digital transformation projects.

The startup ecosystem in India has been vibrant. How can government policies, investment strategies, and industry collaborations foster a conducive environment for SaaS startups to thrive and contribute to the industry’s future?

Government policies, investment strategies, and industry collaborations play pivotal roles in creating an ecosystem where SaaS startups can thrive.

On the policy front, there is scope for making regulations startup-friendly. This includes implementing tax incentives that are tailored for SaaS startups as well as simplifying bureaucratic procedures around running a SaaS business in the country. There’s also a need to establish robust data protection regulations that would help build a lot more trust in SaaS-led solutions. Offering rewards and recognition to SaaS startups that do critical work in R&D can further help boost the morale of founders. Meanwhile, the government is already actively investing in strengthening the Internet availability and digital infrastructure in the country, which will enable increased SaaS adoption, in turn allowing startups to flourish.

In terms of investment strategies, startups should focus on creating strong R&D foundations and investing in building technology for the long term. Beyond capital financing, the ecosystem also needs a lot more incubators and accelerators specialized in SaaS, to offer startups support, mentorship, resources, and market connect.

Lastly, we must foster and sustain a strong SaaS community in India with no bias and agenda to help founders thrive and engage in meaningful conversations with other stakeholders including academia, government, and enterprises.

aanchalg@cybermedia.co.in