India’s software-as-a-service (SaaS) revenue grew 30% year-on-year to touch $3.5 billion in the financial year 2019-20, a study said, adding that global sales accounted for 75% of the total revenue.
The country’s growth rate was 1.5 times higher than the global numbers, the report published by the National Association of Software and Service Companies (NASSCOM) with SaaSBOOMi and Zinnov, said.
Indian pure-play vendors dominate the SaaS market, it said, as the top five vendors in the country make up 33% of the total market share.
“It is phenomenal to see SaaS emerging as a key growth driver for the country. As a technology industry, we have barely scratched the surface when it comes to use cases that can be delivered via SaaS to benefit across sectors. India today needs greater cross industry collaborations, supportive government policy and investment in deep technologies to further the growth of the SaaS industry exponentially,” Debjani Ghosh, president of the industry lobby body, said.
Fuelled by an increase in cloud consumption, need for scalability and digital technology adoption, the global SaaS industry has grown significantly, with a market value of $100 billion in 2019.
In India, the startup landscape and its rapid strides in digital adoption have been key for the increase in SaaS adoption, it said. As of 2020, India has witnessed the growth of six unicorns in the sector, it said.
While the global SaaS market is estimated to reach $400 billion by 2025, India has the potential to clock in a six-fold growth to $13-15 billion, the report said.
The sector has also seen a rise in investor interest in the recent past, the report said. SaaS funding in India has grown at a compound annual growth rate of 15% over the past three years, it said. The Indian SaaS industry today has more than 1,000 companies, with over 150 companies generating an annual recurring revenue greater than $1 million. In fact, Chennai has emerged as the SaaS capital of the country, generating more than $1 billion in revenue, it said.