As Indian companies adopt digital transformation in a big way, Software as a Service (SaaS) is emerging as the big spend. Research firm Gartner estimates, spending on India's managed services and cloud infrastructure services in 2019, to be in the region of $6 billion, a 7.38 per cent increase over the previous year. It also accounts for 40 per cent of the end-user spending on IT services in the country, estimated at $15 billion.
Much of this will go to global majors such as Oracle, which are betting on India as the country rolls out its digital initiatives. The big difference in opting for cloud services as opposed to spending on acquiring software is changing the way companies do business. Customers can deploy applications faster than traditional software and it is an operating expenditure and not capital expenditure. "Because customers can see the return on investment and business benefits of deploying this software, it has now picked up a lot of interest amongst all customer segments," says Prasad Rai- Head & VP, applications, Oracle India.
This is reflecting in the Oracle numbers. It recorded year-on-year growth of over 30 per cent in SaaS, while on-premise software growth is either flat or negative.
"We are outpacing the market and we want to be the leading SaaS provider in India. The Indian cloud business is really booming," says Rai. Another driver is regulation. In a fast-changing world, organisations need to figure out how to respond to changes very quickly and with a SaaS solution they are able to bring changes in their systems much faster. It makes the organisation more agile in dealing with factors that impact the business. The third is the rapid adoption of technologies like artificial intelligence, blockchain and machine learning. As all these technologies evolved in the cloud, it is easier and amenable to incorporate them into the cloud platform.
"Over the last three years, our business has been growing in double-digits, a reaffirmation that there is a lot of traction and interest in Oracle SaaS solutions. We are well on our way to be the market leader as far as SaaS is concerned in a matter of just a few quarters from now," says Rai. Oracle cloud-based ERP solutions has grown over 50 per cent year over year in the last quarter.
Oracle is optimistic about its SaaS growth and is on target to be the global leader in cloud business applications. In India, our SaaS business has grown by 30 per cent year-on-year. We are outpacing the market and are supporting some of the largest transformational deals in India. That includes Taj Hotels, Hindalco, Indian Oil and Transworld among others.
"India is on par with any country because business challenges are the same and the accelerated pace of change is the same," adds Steve Cox, Group Vice President, Oracle ERP and EPM Product Marketing, Oracle.