Is SAAS just hype? Where is business and show me the money!

Software as a service is no more Beta. Even though this grow at a relatively slow pace, SAAS has been considered as a competitive line of business in India.

Availability of potential customers, substantial data to show the money, persistent innovation, interest from global technology giants and venture capitalists made this byproduct of cloud computing, very attractive.

Evolution of Greytip Online - India’s most popular online payroll software , True POS - the leading point of sale tool on SAAS, Freshdesk - the fresh and cute online Help desk software and growing popularity of Salesforce, Trello and Deskaway are giving enough proof that SAAS is viable in India.

As per the article Public cloud gains momentum in India, cxotoday.com finds from Gartner "the biggest segment of the market is Software as a Service (SaaS), having 36 percent of the total cloud service market. Out of the 233 billion INR that will be spent on cloud computing between 2013 and 2017, 89 billion INR will be spent on SaaS"

E-readiness/broadband penetration plays an important role for SAAS. It would be futile to focus on geographical segments, where Internet connectivity is still, a bottleneck.

As published in Track.in, according to 2010 statistics, 10 million broadband subscribers are active in India, of which Maharashtra leads the list with over 1.8 million subscribers followed by Tamilnadu (1.3 million) and Karnataka (1.13 million). Kerala has the highest broadband density with 0.7 million subscribers.

These 15 segments (states) could be ideal destinations to pitch in for SAAS

Small and medium enterprises (SMEs) account for 80-90% of the Indian SAAS business, today. By considering the typical business culture and geography of India, segment specific sales models could augment the acquisition process. If we plan segments based on nature of business, 9 segments could be created across India.

The average selling price and sales model are interdependent as far as sales growth is concerned. When target a large segment with a simple tool, low selling price with self service sales model would be suitable.

 

When target a very small segment, self service sales approach may not be suitable. We may need to adopt transactional sales and if the tool is complex, then enterprise model. However in both the cases, it would be risky to go with low average selling price.

Business support applications may be showcased across segments. However for tools like help desk, point of sale, ecommerce platform etc., service providers may further focus on specific segments

Segment 1	IT, ITeS, KPO, Consulting & eCommerce	1500C	Segment 2	Factories & SSIs	50000C
By considering the huge penetration of software products/ services and technical knowledge of potential buyers, customer acquisition could be relatively effortless here. However exposure to enterprise tools and legacy systems may make them more demanding and quite unrealistic in terms of SAAS offerings. If we achieve 10% of 15,000 units, it would be 1500 customers. Self service sales approach would be appropriate. Engagement is the key and keep the conversation going.			This segment is highly price sensitive.  Biggest challenge could be reaching the potential customer and we can not expect the stakeholders to carry portable gadgets, always and find the SAAS provider via Google search. If we take 10 million SSIs in India, 1 million firms are registered SSIs or SSSBEs. By considering the 1,00,000 factories, the segment can grow further. If we achieve a nominal 5% here, it would be a whopping 50000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 3	Schools, Colleges & Training Centers	10000C	Segment 4	Hospitals & Diagnostic Centers	500C
General perception of education sector as 'non-profit establishment', stakeholders tend to bargain with vendors and pricing is critical here. Approximately 2,00,000 educational institutions could be in India. If we achieve a nominal 5% here, it would be a whopping 10000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.			This would be another potential segment where software penetration would be negligible except in Super specialty Hospitals. 5000+ units are functioning across India. 10% of this can contribute 500 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 5	Hotels, Restaurants & Resorts	250C	Segment 6	Courier, C&F, Packers/Movers, Shipping, Travel & Fleet Services	5000C
This would be another potential segment where software penetration would be negligible except booking or POS. 2500+ units are functioning across India. 10% of this can contribute 250 customers A mix of transactional and enterprise sales approaches would be appropriate. Engagement is the key and keep the conversation going.			This is one of the fast growing segments and SAAS can add value to business here. Reaching customers would be bit difficult by considering the line of business and non-tech savvy audience. There could be 1,00,000 service firms in this segment. If we achieve a nominal 5% here, it would be a whopping 5000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 7	Retail Sector - Food, Apparel, Jewellery & Electronics shops	1000C	Segment 8	Real Estate, Infrastructure & PMC	500C
Branded retail chains and malls would be already running on legacy systems or ERPs. However we can find local super shops, retail chains, jewelries, exclusive garment showrooms, distributors etc. Reaching customers would be a challenge. If we achieve a nominal 10% of 10,000 such units, we would be adding another 1000 customers. A mix of transactional and enterprise sales approaches would be appropriate. Engagement is the key and keep the conversation going.			Small and medium builders, construction companies, architects, interior designers, project management consultants etc. would constitute another potential segment. This segment is vulnerable to market correction, then and there. Price sensitive segment and customer acquisition could be bit difficult. Approximately 5000 such establishments could be there. If we achieve a nominal 10% of this, we would be adding another 500 customers. A mix of transactional and enterprise sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 9	Other Industries	1000C
Outdoor Marketing, Agencies in Sales Promotion, Printing & Publishing, Clubs, Pizza Shops, Farms, Amusement Parks, Cable TV networks, Multiplexes etc. constitute another potential segment.  50000+ units would be functioning across India. If we achieve a nominal 5% of this, we would be adding another 1000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.