SaaS vendors are starting to make a stronger push in the Indian market. VARIndia speaks to some of the leading players in the SaaS landscape.

With the advent of Software-as-a-Service (SaaS) in the region, enterprise CIOs have one more buzzword to contend with and another set of vendors promising that their product will cure all ills.

A plethora of services can now be offered via the SaaS medium. “As the momentum is gaining, there is an upswell in ‘SaaS’ification of software. Large as well as even small software vendors are realizing the potential of this emerging market opportunity and are rapidly making their products SaaS ready,” says Lakshmi Narayan Rao, Marketing Director – Global Channel Programmes, Jamcracker Inc.

Lakshmi Narayan Rao lists the following most popular categories of SaaS:
· Communication & Collaboration Solutions
· CRM / SFA Solutions
· Human Resources Management Solutions
· Security
· Business Tools

Each of the above categories, in turn, has dozens of SaaS services. The Jamcracker SaaS Catalog itself has over 75 globally-renowned SaaS services. “We receive enquiries from software vendors every day for enlisting on the SaaS Catalogue. Following a stringent evaluation process, we update our catalog with new services,” says Lakshmi Narayan Rao.
“Companies of all sizes are contending with a combination of market trends which are forcing them to seriously re-evaluate how they do business. These forces include growing globalization, lower customer loyalty and widening dispersion of today’s workforce,” says Kiran Datar, Managing Director, Cisco WebEx Technology Group.

“On-demand services and Software-as-a-Service (SaaS) solutions have become the preferred mechanisms for organizations to better leverage the power of technology. Rather than contending with the endless hassles and escalating costs historically associated with traditional, on-premise, hardware and software products, today’s on- demand services and SaaS solutions enable organizations to more quickly and cost effectively harness technology to achieve their business objectives,” opines Kiran Datar.
On-demand services and SaaS solutions capitalize on the ubiquity and real-time availability of the web to deliver a new breed of business applications that offer greater collaboration and productivity features via a “pay-as-you-go” subscription fee structure. These solutions also eliminate the infrastructure, installation, maintenance and support costs of the past. Organizations no longer have to acquire additional hardware or hire additional staff to support their business requirements. Instead, the SaaS provider assumes this responsibility as a part of guaranteeing the availability and performance of its solutions.

With the rapid evolution of the SaaS movement, the primary focus of individual SaaS providers has been on developing specific point solutions which can be combined into broader, transaction-oriented packages.

SaaS in India
According to Springboard Research, Indian SaaS market will register a compounded annual growth rate of 76% between 2007-2011 and reach US$260 million in revenues by 2011.

The Indian SaaS market is poised for high growth with 76% of survey respondents, who have not adopted SaaS, planning to do so within the next 12 months. SaaS-based ERP and CRM solutions are likely to see highest demand in the country.

Analysts say India is one of the fastest-growing SaaS markets in the Asia Pacific, growing with a CAGR of approximately 71%, and is expected to reach $267 million by 2011 (according to Frost & Sullivan).

“SaaS is gaining tremendous momentum in India. The highest propensity for SaaS adoption is with the SMBs,” says Lakshmi Narayan Rao. “SaaS is one of the hottest topics in the IT world currently and has attracted phenomenal attention from Customers, Vendors, Channel Partners, Analysts et al,” adds Lakshmi Narayan Rao.

Research backs up the widespread adoption of SaaS in business:
· SaaS is forecast to grow at a robust 22.1 per cent globally until 2011 – more than double the 9-per cent growth rate expected in the market as a whole.
· McKinsey reports that the proportion of CIOs considering adoption SaaS applications in the coming year has gone from 38% a year to 61%.
· By 2012, 30 per cent or more of all new business software will be deployed and delivered as SaaS.
· SaaS usage within mid-size and large enterprises will be more than double by 2010 – averaging more than 7 SaaS solutions in production.
“By 2010, at least 65 per cent of businesses will have deployed at least one SaaS application,” says Lakshmi Narayan Rao.

For Thomas Abraham, Managing Director, Sage India, it is a mixed bag in India presently.

“We see some level of acceptance in CRM, Remote access tools and Conferencing solutions. Most Indian companies prefer to own solutions as in any case there isn’t any great reduction in cost of ownership with SaaS, given the low licence prices in India,“ says Thomas Abraham. “SaaS tends to work more often when you implement ‘standard software’ rather than solutions that need to be customized. Organizations also prefer keeping their database ‘in-house’ given security considerations,” adds Thomas Abraham.
“India is still in the preliminary phase and it is only when the people are fully aware about the concept and ready to adopt the same is when usage of solutions on cloud computing will actually pick up,” says Kiran Datar.

SaaS Advantages
SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee. Organizations save immensely as they don't need to invest in additional hardware.

The online delivery of software has been a long-standing dream for CEOs and CIOs alike. The concept is simple and attractive: rather than buying a software licence for applications such as Security, Mailing, Collaboration, Business Applications, etc. and installing them on individual machines, a customer contracts to access and use the application hosted by the company that develops and sells the software, giving the buyer more flexibility to pick up the best-of-breed applications, switch vendors in case of poor service and generally face fewer problems in maintaining the software.

SaaS removes the need for organizations to handle the installation, set-up and often daily upkeep and maintenance. It lowers cost of business solution ownership, and provides predictability of costs over time while allowing companies to focus more on providing their core products and/or services to customers.

Cloud computing has witnessed quick adoption by product and service companies in the banking, finance and healthcare verticals. Other verticals like IT, BPO, manufacturing, pharmaceuticals, government and education are also embracing this model.

“The beauty of cloud computing is that it democratizes the applications industry by allowing businesses of all sizes to make innovation their primary focus, not infrastructure,” says Andrew Knott, Vice-President – Marketing, APAC at Salesforce.com.

“Cloud computing is the right model in times like these. The cloud computing model does not have any of the cost, risk or complexity of traditional software. Cloud computing is much less risky – there are no huge upfront capital expenditures in hardware or software and no hidden costs or armies of consultants required to get started,” says Andrew Knott.

“With cloud computing, there are moderate, predictable operating expenses – front-loaded investments in commodity infrastructure and software licences are replaced by pay-per-use fees. There are no maintenance fees that traditional client/server software providers charge their customers annually. And the best part is that the system is completely scalable and able to grow with you,” says Andrew Knott.

In addition to cost savings and elasticity discussed above, more companies are choosing cloud computing for three reasons:
Easy Access – Applications are available from any computer or any device at anytime from anywhere.
Painless Upgrades – For multi-tenant cloud applications, the provider manages all the updates and upgrades. There are no patches for customers to download or install.

Time to Value – Companies can be up and running in days or weeks, not months or years, and companies can immediately focus on solving their business problem – while the strategic moment is still at hand.
These are all critical advantages that make cloud computing the best option in times like these.

There are a number of myths about potential drawbacks of cloud computing, but if companies choose their vendors wisely and strategically implement cloud services, there are no drawbacks. Security, reliability and scalability are all concerns in the cloud model, so customers need to evaluate who they work with carefully. Does the vendor post their uptime? Do they have major industry security certifications like ISO27001? How fast do they process transactions?

Salesforce.com is arguably one of the most well-known names in the SaaS market, and has made inroads into the Indian market through its partnership with channel partners.

With Salesforce CRM and the Force.com platform, all businesses, regardless of their vertical industry or geographic location, can buy, build and deploy solutions that are right for them.

Salesforce.com believes in continuous innovation and demonstrated this with the announcement of its Spring ‘09 release in February 2009, the 28th major product release in less than ten years. In the last year, salesforce.com hit major milestones by recording 100,000 custom applications built on the Force.com platform and more than 124,000 Force.com developers.
As a pioneer in cloud computing, salesforce.com spent its first ten years focussed on delivering a great application, Salesforce CRM. “While we are committed to maintaining our leadership in the CRM space, we see huge potential in the custom application development market as well. Over the last couple of years, we have built out an amazing platform strategy, and introduced Force.com, the platform our own applications are built and delivered on,” says Andrew Knott.

The Force.com platform enables customers, developers and partners to build powerful applications that deliver the benefits of multi-tenancy across the enterprise, and is the fastest way to build apps in the cloud. There is no hardware, software or datacenter equipment to buy, provision, and maintain.
“We take care of that for you on the most secure, proven and reliable platform in enterprise cloud computing. In the past year, we have continued to build out this strategy and inked partnerships with Amazon.com Web Services and Facebook, extended our existing partnership with Google, and launched Force.com Sites,” says Andrew Knott.

Cloud computing is enabling a new class of entrepreneurs. They don't need to build offices, distribution centers, datacenters or infrastructure of any kind – everything is managed in the cloud. This will unlock huge pools of innovation around the world, since the cost of developing, distributing and supporting apps is dramatically decreased. Leveraging the Internet, and building on Internet-based platforms like Force.com, these new entrepreneurs need relatively little capital to get started and grow.

The web offers great marketplaces like the Force.com AppExchange – an iTunes like marketplace for business applications – that provide global distribution. This means that we are entering a new era of democratization for developers around the world, a huge shift in power in the software industry, and for customers, an explosion in choice and innovation.
For internal IT departments, we envision that the Force.com platform as a service will completely change the role of IT departments. The break-fix-patch-upgrade components of IT will become irrelevant. But it also creates a new role for IT departments: innovation. When you can develop, deploy, and run apps in the cloud, without having to worry about buying and maintaining hardware and software, you can really add value to the business.
According to Lakshmi Narayan Rao, the bottlenecks to SaaS adoption in India are:
· Lack of Awareness
· Resistance to Change
· The cost of ‘Rip’ping and Replacing legacy technology
“However, there has been a tremendous upsurge in awareness in the past year and currently it is in the cusp between awareness and consideration,” says Lakshmi Narayan Rao. He adds, “The ongoing recession is only making the SaaS proposition more attractive and is accelerating the technology adoption.”

Another myth is about how secure SaaS is? This is a debate that has been raging for long and like other myths would not be an impediment to the growth of SaaS

Security in the cloud would arguably be better off than most enterprises can ever afford for their datacenters. This is simply due to the fact that any breach in a global data centre used by multiple entities would be far more magnified than in the relative insular of a single enterprise. The sheer business impact of a breach would ensure a high level of caution and security detail amongst the service providers. Measures such as Retina scan for access, multiple datacenter mirrors in different continents, bio-mech technologies, fortress like physical security et al are seldom seen even for large enterprise datacenters. Some datacenters, for instance, provide encrypted data transmission, user-access control and secure storage in a datacenter that's hundreds of feet below ground.

As with the evolution of any new technology model, the early adopters are bound to take a cautious first step before fully trusting sensitive apps and data with Cloud computing vendors. The natural progression is to entrust non-tactical, non-sensitive data before moving to operational data and thereon business sensitive information, IP et al.

As companies continue to extend connectivity outside their office walls, businesses must focus on new ways to protect its data and communications. Cisco recently announced the delivery of cloud-based security-as-a-service, which would enable businesses to collaborate with greater confidence as their employees become increasingly mobile and interactive.

“This unique approach for delivering security as a service ties together services from multiple networks and applications, bringing together the cloud and the enterprise network for highly secure collaborative communications,” says Kiran Datar “The Cisco Security Cloud supports the recently-announced Cisco IronPort Hosted Email Security Services as well as Global Correlation, a powerful new technique that powers security services integrated into Cisco’s broad range of security offerings,” adds Kiran Datar.

Cisco
Cisco offers various solutions in the cloud space from web collaboration to security over cloud and unified services delivery.
Cisco WebEx Connect
Cisco WebEx Connect is an on-demand application platform that combines instant messaging, team spaces and business applications to bring people, data, and processes together.

For IT and developers, Cisco WebEx Connect is the first collaborative software-as-a-service platform that allows developers and customers to integrate multiple applications to create powerful collaborative business “mashup” solutions from best-in-class web and desktop applications delivered on demand and on premise. Developers and partners can extend their reach by offering innovative collaborative solutions to millions of Cisco WebEx users worldwide.

Verticals driving SaaS Adoption
Cloud computing has witnessed quick adoption by product and service companies in the banking, finance and healthcare verticals. Other verticals like IT, BPO, manufacturing, pharmaceuticals, government and education are also embracing this model.

Abraham opines, “At the moment, it is not vertical specific as the focus is get organizations start experiencing CRM. This is being done by taking a horizontal approach. Over a period of time, we will experience some verticals accepting this concept faster.”

“The key area would be successful implementations and references getting built up. That would drive further adoption. That would be the most important area for SaaS to focus on,” says Abraham.