Indian enterprises have had software as a service (SaaS) on their radar for the last seven-plus years, if not more. SaaS uptake in India was slow, and cost used to be the only major driver toward SaaS adoption. Indian enterprises were in dilemma when major software vendors shelved their on-premises solutions in favor of SaaS-only offerings. At the same time, digitally born companies with the latest solutions have SaaS-only solutions.
Many Indian CIOs have taken early steps to identify specific business applications that they can move to SaaS and measure the business benefits of this movement. Cost benefits used to be the key driver for SaaS adoption when hardware and software contracts were up for renewal. At the same time, CIOs and CFOs have been long debating SaaS as a vehicle to reduce costs. Why? Because: 1) SaaS adoption makes the balance sheet of the company asset-light; 2) it impacts the working capital requirement due to the subscription-based licensing expenses; and 3) SaaS adoption can allow you to optimize headcount, reducing the personnel cost.
More Indian CIOs (and CFOs) are realizing that these calculations do not have a major financial impact, however. Up-front capital savings and paying monthly rates seem like a lucrative option, but in most cases, the monthly rates are either paid all together in the first month or on a quarterly/half-yearly basis. CIOs need better reasons for SaaS adoption.
In Forrester’s Software 1 Survey, 2022, the top three reasons that Indian technology leaders cited for SaaS adoption are:
- Increased IT/cloud resilience — important for raising overall business resilience.
- Higher speed of implementation and deployment — crucial for supporting ever-changing customer expectations.
- Regular automated delivery from vendors — great for innovation and reduced technical debt.
The digital transformation wave in India started around 2015–‘17. COVID-induced disruptions further accelerated it. Further, global uncertainties such as the war in Ukraine and economic slowdown have pushed resiliency as one of the top priorities for all functions across all companies. All this is happening while customer and employee behavior and expectations are rapidly changing. Needs such as remote employees and digital transactions have rapidly risen. Interestingly, this is exactly where SaaS seems to be of help to Indian businesses. It is no longer about the cost but these silent benefits that SaaS adoption brings. We can say that the SaaS cat is truly out of the bag for Indian companies.
What are your reasons for SaaS adoption? Let’s talk.
For more information on SaaS adoption in India, please refer to my recent report on Forrester.com, Indian Firms Will Meet Their Software Needs Via SaaS In 2023.