SaaS (software-as-a-service) is a software distribution mechanism in which service providers host an application on their own servers, which a customer can access through the internet. It is a basic paradigm of cloud computing. India's SaaS industry has lately grown in strength, reflecting an increasingly digitised global corporate climate.

SaaS first arrived in India over a decade ago, serving international clientele. Only in the last few years have Indian companies understood the value of SaaS for company operations. Software installations for company operations were quickly adopted by organisations with big teams. However, as time went on, even startups saw the value of software in terms of automation and simplicity of operation.

What is the future of India's SaaS industry?

While the SaaS phenomenon is widespread, India in particular has the chance to accelerate its SaaS growth. By 2030, the country's SaaS sector is expected to produce sales of $50 to $70 billion and capture 4% to 6% of the worldwide SaaS market. According to a study by SaaSBOOMi and McKinsey, this may result in a value of up to $1 trillion.

According to McKinsey & Company statistics, India presently boasts about 1,000 SaaS firms, including ten unicorns, that produce a combined two to three billion dollars in annual sales and employ nearly 40,000 people. They projected that the number of unicorns may grow tenfold by 2030. A study by Google and KPMG goes much farther. According to the report, India is on track to become the home of a $10 billion SaaS sector, with its worldwide share anticipated to increase to 8%. The SaaS market is now expanding at a compounded rate of 18 percent, with SaaS in the small and medium company sector expected to increase by 36% in the next few years.

The sector presently employs 40,000 people, and several companies, such as Chargebee Inc., have gone worldwide, while others, such as Freshworks Inc., are preparing to go public. Postman, Zenoti, Innovacer, Highradius, Chargebee and Browserstack, Mindtickle, Byju, UpGrad, and Unacademy were among the ten new unicorns that emerged during the epidemic. There were also many large venture capital deals, including a US$150 million transaction for Postman, bringing the total amount raised by the Indian SaaS community in 2020 to about US$1.5 billion, four times the amount invested in 2018.

Analysts believe that the total rise has been fueled by Indian SaaS firms' inherent cost advantage, which stems from reduced overhead expenses and the country's readily accessible affordable, trained labour. Over 100,000 SaaS developers and more technical skills are expected to be accessible in India for a third of the cost in the United States. As a result, Indian SaaS firms are popular choices for multinational corporations looking to invest in back-end management. Add to that India's proven edge in back-end support through its IT and ITES industry, which considerably reduces total company expenses.

Overall, as more firms migrate to the cloud, India is in for an exciting period in terms of SaaS. India is well-positioned to take a leadership role in the global SaaS market in the next few years, since it already has an advantage in this field. It’s definitely the next big thing: according to some experts, Indian businesses are on track to quadruple their market share in the global SaaS industry in the next few years. According to one research, India's SaaS sector may be worth $1 trillion by 2030 and generate almost half a million new employment. In 2020, the Indian SaaS community will have raised about $1.5 billion, four times the amount invested in 2018.