SaaS accounts for 9% of India's SW sales, to grow 3-fold by 2020: NASSCOM

Indian SaaS market to reach USD 1 billion by 2020. BI/analytics, CRM and CCC to have maximum demand in coming five years. Most of the USD 600 million funding for Indian SaaS based application went for start-ups

Software as a service (SaaS) accounted for 9% of Indian Software sales in FY 2016, according to estimates by industry body, NASSCOM. Calling it the Next Big Thing, NASSCOM estimates that the SaaS opportunity in India will be worth USD 1 billion by 2020, a three fold rise from last year.

Content Communication and Collaboration (CCC), Customer Relationship Management (CRM), Business Intelligence/ Analytics (BI), Enterprise Resource Planning (ERP), Supply Chain Management (SCM) and project and portfolio management (PPM) have been the key revenue generating areas.

Indian SaaS market grew approximately 34.8% from USD 302 million in FY15 to USD 407 million in FY16. The projected  $1 billion mark by 2020 represents an impressive CAGR of 27.4%. While CRM and CCC mark the most of revenue by bringing 22% and 20% of total SaaS revenue till FY16; BI analytics, and CCC SaaS solutions will have maximum demand in next four years. CRM, as per the report, is expected to increase its share to 31% by 2020.

India has received USD 600 million funding for SaaS since 2014. From last three years, the deals have doubled. CCC, CRM and BI are the top three areas to get funding. These three also happen to be areas where most of the SaaS companies are operating, according to data presented by NASSCOM quoting a Deloitte report.

Currently, 60% of Indian firms focus on CCC, CRM and BI based SaaS solutions, where CCC and CRM have equal share of 23%. Rest 40% of organisations focus on ERP, HCM, SCM and PPM SaaS solutions, where ERP enjoys the majority of 16%. 

 

Global Comparison

Indian market share is in accordance with global trends. Global SaaS market is forecasted to reach USD 72 billion by 2020. CRM remained the key revenue generator for both the markets. CRM generated 39.5% of global revenue and 40% of Indian revenue. Enterprise resource planning (ERP) and CCC were the next in league of money making. Digital content creation with 1.8% global and 2% Indian market share remained the least revenue generating effort for the year.

For Global market, SAP, Oracle, IBM and Microsoft mark almost 50% of the market, Indian firms are sub-divided on base of SaaS solutions


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