The report 'Riding the Storm: Towards the Giant India SaaS Opportunity' says the number of SaaS companies growing in India at a compounded annual growth rate (CAGR) of 30 per cent is nearly one and a half times faster when compared to global SaaS landscape. While the Indian pure-play SaaS companies are dominating the market, the top five companies account for nearly 33 per cent of the market share. Terming the SaaS companies as one of the emerging growth drivers, Debjani Ghosh, President, NASSCOM says that as a technology industry they have barely scratched the surface when it comes to use cases that can be delivered via SaaS to benefit across sectors. "India today needs greater cross-industry collaborations, supportive government policy, and investment in deep technologies, to further the growth of the SaaS industry exponentially."
While the SaaS industry in India has been seeing an accelerated growth in the last few years largely led by increased cloud consumption and evolving Software as-a-Service model. The large demand (nearly 75 per cent) for Indian SaaS products comes from global markets. SaaS funding in India is said to have grown by 15 per cent CAGR over the last three years. With nearly 6 unicorn SaaS start-ups, the number is expected to grow higher by 2025 .
With the global addressable SaaS market expected to be around $400 billion by 2025, Indian SaaS companies have a big opportunity ahead. While the pure-play Indian SaaS industry is a fraction with revenues of around $2.5 billion, by 2022 it has the potential to grow by six times and hit revenues of $13-15 billion, says NASSCOM .
Some of the key recommendations in the report to realise this growth potential include a strong push for procurement of India SaaS products through changing procurement norms, specific incentives and linkages with Indian MSMEs, creating specialised SaaS focussed accelerators and incubators and promotion of tier-II and tier-III cities and non-metro locations to develop SaaS companies in India. The report also suggests looking at non-VC funding model requiring to grow the SaaS industry base.
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