SaaS Market in India. Growth Predictions and Models

Software as a Service (SaaS) is a web-based software that does not need licensing. It is used on a subscription basis. Users can connect to such software using any device and from anywhere. Many businesses around the world are already using SaaS. India is also rapidly migrating toward this trend. First, let us understand why SaaS is becoming so popular.

Benefits of Using SaaS

  1. An app need not be purchased and installed. It means there is no licensing fee involved. Monthly or yearly subscription plans can be used. You can pay as you go. The initial investment is hence, meager.
  2. A business doesn't have to bother building an infrastructure for data storage. The IT group in a company is not concerned with updating or maintaining the software. This helps cut costs on IT resources.
  3. Employees can use the apps from anywhere with a good internet connection. Any device can be used too. This is much suited for companies that let their employees work from anywhere. When working from home has become a norm, this is an advantage that most businesses would like to grab.
  4. The SaaS provider manages the security of the data. Companies do not have to invest in preventing hacking or loss of data by any other means, like a natural calamity.
  5. Scalability is an essential benefit of using SaaS. It can be scaled according to the company's changing needs without hassles.

SaaS Market in India

These core benefits make the use of SaaS desirable. In fact, with the increasing digitization every year, this business model is fast growing in India. Several small and big businesses are sprouting in India every other day. SaaS is a combined solution for cost, infrastructure, and workforce issues. 

With the growth in the use of SaaS also comes the development of SaaS vendors. Several organizations use multiple SaaS applications. Therefore, the spotlight has turned toward developing intelligent and practical SaaS products. The SaaS in India is not just catering to the local market but also global clients.

Growth of SaaS in India

Several sectors in India are migrating to the use of SaaS. Most companies are using more than one SaaS product. It is possible because internet usage has become very popular all over the country. Most places have good connectivity at a low rate. With the widespread use of smartphones, the demand for SaaS products is rising and will rise further. More people use their smartphones for work rather than laptops and other devices. This gives enormous scope for services like SaaS.

Medium and large businesses account for a significant share of the demand. These companies require SaaS products for customer relationship management, human resource management, messaging, financial management, calendaring, data storage, etc. Even small businesses have started investing in SaaS.

Many end-use sectors such as Healthcare, retail, education, government, IT, etc., can primarily benefit from using SaaS products. Therefore, these and several other industries are exploring using new and improved SaaS products to support their business and make the experience better for their customers.

Improved and Innovative SaaS

SaaS products are multiplying, so soon, it will be hard to stand out from the crowd. Several competitors are on the rise in every kind of app, say an app for calendaring or an app for financial management. Every new product needs to focus on technological advancements and innovation. Continuous research and development become necessary to develop the most versatile and pocket-friendly apps. Numerous SaaS startups are coming up with an equal number of options for the market. New companies are focusing on tapping the potential of the yet-to-be-exploited talent pool of the country.

Effects of SaaS Transformation on the Indian Market

  1. The ratio of Accounting Rate of Return (ARR) to funding is rising with the implementation of SaaS. This means that a project's expected rate of return is much better.
  2. Companies in India are investing in building a league of professionals skilled in SaaS-related areas.
  3. There is also a growth in exits.
  4. Former employees of SaaS companies are funding new businesses and employing even more people in this sector.

India has seen hundreds of SaaS unicorns and startups worth $1B or more in the past few years. That is how rapidly the SaaS environment is growing in India. Investors' confidence in this arena is such that the funding is only getting bigger and better, even for a startup. The investors are now not the kind who provide startup funding and then sit back. They are involved in the financing in various stages, such as the growth stage and later on. Investors are collaborating with founders to give support during the operational phase.

For A Better SaaS Environment

All stakeholders associated with the SaaS System in India can collaborate to improve the environment for SaaS to flourish. Investors should involve in the growth phase, decision-making, and other aspects instead of simply providing the funds. Founders with a vision, adequate market research, and networking can build premium products and help the community grow. The government needs to play a critical role in policy-making and regulations related to SaaS. Most importantly, well-trained people with the relevant skills are required to meet the exponential demand in the field.


The post-Covid19 world has been focusing more on methods and technologies relevant to working from remote locations. Cloud computing and models like SaaS are being rapidly adopted in businesses worldwide. With the rise in demand comes the increase in the need for more and more SaaS products. Products with various options and flexibility are arriving in the Indian market from founders with great vision.

There is immense potential in the SaaS industry in India, and there is a high probability of an exponential increase in its use. India has many founding leaders and dedicated investors who will soon help capture more of the global SaaS market.

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