The Indian SaaS sector is projected to grow sixteen-fold over the next decade and boast multiple billion-dollar-revenue businesses, collectively valued at over $50bn, says a joint report from Google and Accel Partners.
The report, released on Friday, projects Indian cloud start-ups raising the Software-as-a-Service sector’s annual revenues in India as high as $10 billion. That’s roughly 8% of the projected $132-billion global demand, by 2025. Current global demand for SaaS products is estimated to be around $60 billion.
Accel India partner Shekhar Kirani said: “Many Indian SaaS startups are creating world class products for global SMB market. With smart entrepreneurs, local talent, favourable unit economics and a vibrant venture capital community in this space, we anticipate many billion-dollar firms in the next decade.”
Unsurprisingly, these billion-dollar firms will create considerable value, concludes the report: “In a market with demand fulfilment largely led by US, India’s competitive advantages will help Indian SaaS companies see strong growth and create $50 billion in value over the next 10 years.”
Google Vice President Rajan Anandan. Image: Mexy Xavier
Google India managing director Rajan Anandan said: “Indian start-ups have an edge, as mobility is also becoming a key requirement by small-medium businesses (SMBs) for SaaS. Our start-ups are already building world class solutions for the mobile first users; this strength, combined with easy access to a global customer base online will help India become a very strong player in the global SaaS industry… India’s competitive advantages will help its SaaS firms grow strongly to command $50 billion in value by 2025.”
Cloud Awards organizer Larry Johnson said: “The SaaS market is growing at an unprecedented rate, thanks in part to changing market dynamics and globalized, reliable internet connectivity. With the right level of investment, the Indian SaaS market – far from beginning stationary in 2016 – is going to be an increasingly important global influence. The importance of Indian SaaS products and innovation is something we need to recognize now.”
The report was compiled by Google and Accel Partners, combining several sources. This includes interviews with Indian SaaS companies across mutiple segments; investors in SaaS; SIs and institutes for the the period Oct-Dec 2015. The report augments data from Google India primary research for SMB consumers targeted to the US conducted during the period Jan-Feb 2016, and secondary Research by Zinnov which was conducted in India. The report also includes benchmark business metrics from Accel India’s SaaS portfolio and Google search trends data for the calendar years 2013, 2014 and 2015.