Takeaway from Techcircle SaaS Forum 2012: SaaS market yet to mature in India, startups must go global for growth

India might be a good market for launching SaaS startups, but it is crucial for the companies to explore global markets as well, as sales and collection happen to be a difficult proposition here, feel industry insiders.

During a panel discussion at Techcircle SaaS Forum 2012, recently held in Bangalore, industry bigwigs have also observed that India as a SaaS market is yet to mature and absorption of technology is a major hurdle for startups.

"When we launched in India, we were confident of gaining huge traction as there are millions of enterprises here. But as we started growing, we realised that selling and collection happen to be a major issue that can hinder growth. We then started looking at global markets where we could grow much faster than we could in India," said Aneesh Reddy, co-founder and CEO of Capillary Technologies, a Bangalore-based SaaS startup offering CRM solutions on the cloud. Selling is much easier in developed markets like the US, he added.

According to Ambarish Gupta, CEO and co-founder of Gurgaon-based cloud telephony startup Knowlarity Communications, Indian customers are price sensitive although the country offers good opportunities for scaling the business.

"However, getting the price upfront is a key issue in India, while in developed markets, the scenario is much better. Our core focus is definitely India, but we will soon go global where we expect to get a huge traction for our products."

Accel Partners' Shekhar Kirani, who also took part in the discussion, pointed out that it's all very well when a customer searches for a product on the internet. But when the company actually approaches that customer, it's a different thing altogether.

"Customers may not be aware of the differentiators when it comes to similar products available in the market. But you, as a company, must grab all the opportunities that the market offers. Whoever grabs it first, will get it. You should also provide free trial for a certain period – so that the customer gets enough time to understand the product in totality and make a buying decision."

However, every SaaS startup has its own space in India, irrespective of the pricing, just like different cars have their own market shares in a fast-growing Indian car market, noted Sharad Sharma, former CEO (R&D) of Yahoo India.

"Although companies like Zoho and Salesforce provide their offerings at different pricing, they both have their own space in the market and don't compete with each other. Likewise, each company operating India has its own market," he added.

(Edited by Sanghamitra Mandal)