The SaaS market is highly competitive, fragmented but showing signs of intense growth. Organisations, across sectors, are jumping the SaaS bandwagon to not only cut their infrastructure costs significantly but also reap benefits of new technologies like IoT, AI/ML and achieve the competitive edge.
Credible data reveals that a majority of businesses plan to invest more in SaaS solutions and by 2020, SaaS will be one of the most disruptive technology segments. On average, enterprises across industries utilise between 25 to 100 SaaS applications.
While there are plenty of options available for SaaS buyers ranging from best-of-breed to a comprehensive suite, the leadership will largely depend on the depth of application portfolio and the coverage it provides to the growing needs of businesses. DynamicCIO spoke to Prasad Rai, VP and Head of Applications, Oracle India on trends that he thinks will make SaaS the inevitable part of organisations growth story.
Below are the excerpts:
DynamicCIO (DCIO): Software as a Service (SaaS) has found acceptability across sectors, industries. As an industry expert, how would you assess the SaaS momentum in India?
Prasad Rai (PR): Without doubt I can say SaaS is now a mainstream thought for technology leaders. Adoption of SaaS, across industries, is pretty visible. My assessment is that enterprises and mid-market companies are looking for a SaaS alternative for any application – be it core or complementary. This shift from on-premise to cloud has really picked up traction. Most analyst reports suggest a strong Y-O-Y growth for SaaS while the traditional, on premise software growth is either flat or negative. Oracle is taking this transformation seriously.
What really leads customer to consider SaaS, as an alternative, is the usability; better user interface and the experience it delivers to users over the past instances. Organisations can deploy these applications within faster and it is only an operating expenditure. Because there’s a quicker return on investment and deploying cycles get shorter, there is a lot of interest amongst all industry segments. That’s why I think SaaS will pick up.
Another major factor working in favour of SaaS is a set of things like regulation, competition and disruption. Organisations need to figure out how to respond to changes quickly and SaaS empowers them to do so. Things like agility, speed, faster go-to-market weren’t possible if there was no SaaS. What will further tilt the pendulum in favour of SaaS is new technologies like AI/ML, blockchain, IoT etc. All of these technologies have evolved in the cloud thus making it more amenable for to incorporate these into our cloud platform. Users are in awe of these technologies.
DCIO: How would you compare India vis-à-vis other regions such as APAC, Japan or even globally? Do you find anything unique about India?
PR: India, as a market, is both promising and growth-oriented. The reason why it excites me is the growth indicators that we see at regular intervals. Oracle has seen large enterprises moving on to SaaS based applications in India. Our cloud-based ERP solutions, for instance, have grown over 50% YOY during the last quarter, which is faster than the market average. Other areas like Go-Live have seen great traction as well.
In the context of APAC and Japan, India is going strong, getting a lot of attention and probably is one of the largest areas, regions. Even globally, India is grabbing attention because of an influential and strong list of customers including Taj Hotels, Hindalco, Tata Group, Reliance AU Finance, Adani, State Bank of India, Bajaj Electricals etc. These are large conglomerates and have posed great deal of faith in putting their core applications on the Oracle cloud. It validates that SaaS is going mainstream and providing value. Globally, during the Q1 this year, our ERP business grew 30% YOY. We already have well over 20,000 customers including NetSuite across the globe.
To conclude, India remains an exciting market for us, well aligned with the Japan and Asia-Pacific organisation and therefore, able to get the best of skills to the table.
DCIO: While SaaS acceptability is established, which segments of SaaS is really driving this growth in India. How do you envision the business in 2019?
PR: In terms of growth, we have seen a strong double-digit growth in last three years. We have use-cases across industry including telecom, financial services, manufacturing, IT/ITeS, pharma service industry etc. This is an endorsement for our claim that Oracle is dominant in the SaaS space. A rich list of customers strong demand market and need for agility and speed all are positive indicators for Oracle. We are perhaps an exceptional provider when it comes to solutions across the spectrum of SaaS.
Today, just 21% (by revenue) of all the ERP customers run in cloud environment therefore leaving a huge potential for growth and adoption. Similarly, in HR 63% of customers are on cloud and in CRM CX, about 57%. There is a lot of potential for growth for the SaaS-based applications. Not just that. We are displacing our competition in install base.