utside of the Indian techno-entrepreneurial sector, almost no one had heard of Software as a Service a decade ago (SaaS). Nasscom, India's IT industry group, estimates Indian SaaS sales at $3.5 billion today and expects them to grow six times by 2025, describing the business as a trillion-dollar opportunity. At a time when the Indian IT services industry is facing a first-level challenge from the emergence of automation and simpler cloud architecture, SaaS could be a panacea for future growth. Indian SaaS companies have distinct competitive advantages over their global peers, including access to a large pool of qualified talent, including 100K+ SaaS developers, significantly lower staff costs (75-85 percent) for equivalent sales and production talent compared to developed countries, and scalable models like round-the-clock operation with a trained IT service workforce. Furthermore, globally, world-class products produced and managed by Indian entrepreneurs are already widely accepted,‚ÄĚ said Aditya Shukla, partner at Bain & Company and report co-author.

It took 15 years to build a $2 billion new market.

There are also entirely new prospects that match Indian SaaS's benefits. Consider a business that has developed a niche SaaS product for a specific micro-market. The total addressable market is estimated to be about $15 million to $25 million dollars. A business has already taken $6 million of this. This market is extremely difficult for a US corporation to benefit from.

A number of new SaaS industries have emerged that have yet to be addressed by software designed specifically for them. The size of these marketplaces is difficult to predict, and they fluctuate overtime. Take, for example, the document e-signatures market. If you'd asked for the size of the e-signing market in 2007, you'd have been met with puzzled eyes. By 2015, the sector had grown to over US$500 million in revenue, with two companies alone accounting for over US $100 million in sales. By 2021, it is expected to have surpassed US$2.1 billion, giving it 15 years to generate new demand worth US$2 billion.

Consider a life insurance company's marketing strategy. A tool for the automotive industry's innovation management. It's a way for dry cleaners to provide better service to their clients. Each of these SaaS products might be in a market that doesn't currently exist. However, each of them has serious founders with domain expertise in each field and a track record of building SaaS businesses.

Series on Product-Led Growth

PLG (Product-Led Growth) is built on the idea of creating a product that sells itself in a line. PLG is being widely adopted by SaaS organizations across the world to manufacture and sell things in such a way that the product itself allows the customer to make significant progress in the user journey and make a purchase decision without too many human touch points. Our goal with the SaaS BOOMi PLG Series is to bring PLG to the Indian SaaS ecosystem, create a forum for Indian SaaS start-up founders, product and growth professionals to learn how PLG can transform growth, and learn how to adapt and execute PLG by listening to industry leaders.

We believe that implementing PLG as a core product-growth strategy will be extremely beneficial to Indian SaaS firms. It can minimize expenses for functions like service and sales (because to fewer human touchpoints), while also providing a better experience for people all over the world. However, there are currently very few PLG practitioners in India. Despite the widespread adoption of sales and support pipeline frameworks among startups in India, just a few organizations have implemented PLG. SaaS BOOMi seeks to fill this hole in the industry by raising awareness and assisting companies in learning how to adopt PLG.

In the 1990s, buying software for a firm required investing in servers, purchasing licenses from a software service provider, and paying for customization, onboarding, and maintenance fees for the entire world. This meant that having an on-site sales team was almost a requirement for a successful transaction. It eliminated access and exit barriers, launched free trials, and developed a low-touch distribution methodology, all of which resulted in significant cost savings. This low-touch sales technique also meant that sales were not appropriate unless deal sizes exceeded a particular value.

Bain anticipates four models of Indian SaaS companies to gain traction in the future. SMB-focused SaaS companies like Zoho and Freshworks, which target global markets with easy-to-use horizontal services, vertical-specific SaaS companies like Locus and Innovaccer, which disrupt underserved verticals like healthcare and logistics, globally competitive digital technology companies like Postman, and B2B technology

The study outlines four winning abilities that will be critical for Indian SaaS startups to grow in the current era ofCovid-19. As the workforce becomes increasingly dispersed and remote, this involves enabling remote sales, developing a solid product-market match, and fostering employee success and creativity within the organization.

We've seen a combination of essential winning elements around key pillars including vision and strategy, imperatives for how-to-win, and organizational enablers in our experience managing SaaS businesses.

Strategy and vision ‚Äć

Playing in a large, well-defined industry and offering a thoughtful, differentiated product concept.

How to be victorious ‚Äć

Spend time determining the greatest match for the product segment, developing pricing and go-to-market models to aid the product, and focusing on consumer success.


Create a worldwide organization that values creativity and collaboration.

In the contemporary Covid-19 scenario, it is critical for Indian SaaS companies to exhibit four winning skills:

Accept remote sales.

As part of Covid-19, corporations are being pushed to be more comfortable with closing large digital channel deals.

Create a productive business.

‚ÄćThe sales engine will focus on moving upmarket and expanding into global markets at an early stage.

Develop a good product-market fit

Working with early clients and improving the value offer to solve a specific use case in an increasingly competitive market.

Encourage employee achievement and creativity.‚Äć

Even if the company's staff grows more dispersed and remote, there are some things that can be done within the company.

According to Tracxn data, between January and October, SaaS businesses and digital applications got roughly $2.10 billion in investment, up from $1.70 billion in 2019. Digital apps Pine Labs ($85 million) and Khatabook ($60 million) are among the top fund-raising rounds, as are Postman ($150 million), Freshworks ($250 million), and High Radius ($125 million). As a result of the epidemic, companies' customer engagement methods have changed. It has increased demand for solutions that allow companies to engage with and serve consumers regardless of where their customer-facing employees are situated. Companies' consumer engagement practices have altered as a result of the epidemic. It has fueled demand for solutions that enable businesses to interact with and serve customers regardless of where their customer-facing staff are located. It increased the demand for solutions that allow organizations to communicate with and serve customers no matter where their customer-facing employees are located.

Let's take a look at what SaaS is and the factors that influence its growth. Any company selling software to a client in the 1980s and 1990s used to host it on local servers at the client's location. The internet (remote public connectivity) and cloud computing revolutionized this dynamic in the early 2000s (capability to expand and contract computing resources on demand). They allowed businesses to run a single version of their software over a remote cluster of servers servicing different clients, rather than having to install separate instances of the software for each of their clients. This significantly reduced development and maintenance expenses for both software and hardware. Instead of selling the license, US firms like Sales force began" renting out" its software, turning a one-time capital investment in software into an ongoing operating expense. This significantly lowered the barrier to a corporation trying out new types of software. We have an inherent edge in terms of the caliber of engineering skills accessible at a third of the cost in the United States.

This talent pool isn't just for engineers. India now has a sufficient number of product managers. Because of the trickle-down effect, the current generation of SaaS companies has learned enough from their predecessors to be in a better position to produce stronger products. If we look at the traditional service delivery model, signing a large contract entails hiring new employees and constructing facilities to satisfy the contract's demands. This usually necessitates a significant financial investment. Unlike the service sector, SaaS businesses often have cheaper, set, and predictable infrastructure and personnel costs. Scaling up the offering to satisfy the needs of larger clients requires only a minor increase in infrastructure expenditures. The revenue-to-value multiple for IT Services sales is 1.5x to 2.0x. This might be anywhere between 10x and 15x for SaaS businesses. It's also easier than ever to create new SaaS applications. Building software, like acquiring software in the past, typically entailed creating the appropriate technologies, servers, and infrastructure platforms from the ground up. Today, platforms like AWS, Google Cloud, and Microsoft Azure have substantially decreased the cost of infrastructure and expansion. In addition to improved and cheaper internet access, co working spaces, and sites like Stripe Atlas or Gust, all of these elements made it relatively simple to get started.

For decades, India has been a center for IT services and BPO, which means that Indians are experienced with and have a thorough understanding of B2B tech consulting. Vast numbers of Indian SaaS companies can hire for customer service thanks to a large, readily available skill pool from BPOs and the service industries. This enables them to provide their clients low-cost, or even free, multi-channel service. Indian SaaS enterprises have helped them to outpace their global competition by providing great customer service.

"Indian SaaS firms have a distinct competitive advantage over their international counterparts: they have access to a large pool of skilled talent, including 100K+ SaaS developers, significantly lower (75-85 percent) personnel costs for similar talent in sales and development compared to developed countries, and flexible models like around-the-clock service with a trained service workforce from our IT academies," says Singh. Moreover, globally, world-class products produced and run by Indian entrepreneurs are now generally accepted,‚ÄĚ said Aditya Shukla, Bain & Company partner and co-author of the report.

Indian SaaS companies have distinct competitive advantages over their global peers, including access to a large pool of qualified talent, including 100K+ SaaS developers, significantly lower staff costs (75-85 percent) for equivalent sales and production talent compared to developed countries, and scalable models like round-the-clock service with a trained service workforce from our IT sector. As time goes on, we expect four major company archetypes to emerge: SMBs with horizontal offerings aimed at global shores; vertical-specific companies with the potential to upgrade underserved verticals like healthcare and logistics; emerging global technology players; and homebound initiators with SaaS and business-to-business tech goods aimed at the domestic Indian market.

Alive and Well is the Myth 

If you're looking for the most promising business opportunity in India, look no further than B2B SaaS. Despite what others may believe, the opportunity has not reached a nadir. There are a lot of prospects, but the number of established businesses is still extremely small. The most successful businesses have successfully bootstrapped their production and been profitable within a few years. There are also countless examples of entrepreneurs who sell specialty goods to larger companies who have exited the market.

The anticipation should be taken seriously. You'll find the solution quickly if you understand the best match for the product market, invest in good people who can develop and promote a world-class product, and focus on digital marketing.

May 21, 2021

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