2) SaaS as a private srvice: Most software written by Indian vendors works this way, other than perhaps Tally or Antiviruses. An ERP package is necessarily combined with a service - and in all probability there is an onsite engineer managing a server where the stuff is installed. A lot of accounting stuff also happens this way due to either data security issues (there isn’t much focus at the vendor end to protect/preserve) or because getting a reliable line to the vendor is way too expensive.

I think SaaS at the vendor end - be it a web site or a vendor data center - requires cheap and reliable communcations from the customer end. Leased lines are still too expensive. And the web in general is too unreliable.

Security may be an issue but it’s usually related to cost. I.E. if you tell someone it will cost 5x to do somehting at your office compared to keeping stuff at mine, it’s a simpler sell. But yes, vendors must focus on security and backups etc. - and there need to be these massive underground fireproof earthquake proof data centers that can lease rack space out cheap.

SaaS vendors need to ensure that integration issues are worked out first. For instance running a SaaS based accounting service mandates that you provide an Excel export of everything. Plus perhaps an API to access data for those few people who’ll need fancy custom apps.

I agree though, that this is the age of SaaS for India.

1. How secure the data is with the SaaS vendor?
2. Is there a possibility of a desctructive influence during data transmission?

Most SaaS applications work via multiple, mirrored data centers and efficient switching mechanism to detect disasters and redirect to the nearest available application/data source. This would also imply that client’s data is backed up at multiple locations and generally a 99% availability (application and data) is assured as a part of the SLA.

As far as desctructive influence during data transmission is concerned, the SaaS apps run on standard HTTP. The existing security available over HTTP, in the form of encryption is commonly used by banks and various other enterprises that interchange data. The same should be applicable to SaaS based data exchange/transfer.

This is a minor challenge than a barrier.

The customer’s reaction is generally mixed, when you tell them that companies such as Times Warner, Expedia, Dow Jones among others, are using SaaS for multiple business activities.

In my last post, the last three words ‘to get mitigated’ went missing. Hope no confusion has been around in the last paragraph.

1. Stated IT Needs
2. Real IT Needs
3. UnStated IT Needs
4. Delight IT Needs
5. Secret IT Needs

SaaS lies toward the bottom (i.e. Unstated Needs to Secret Needs).

While talking to a few of my potential customers in India, I realized that the needs that were being stated to us were not inline with their immediate and long term plan i.e. “Lowering the bottom line by X% over a period of Z years”.

My team phrased a small questionaire which included utilization of the IT budget so far, Their plans to maintain/lower it further in the next two quarters, year… so on and so forth.

It did not take us a mammooth effort to realize that their stated needs were exactly what they had thought. Our interpretetion of their Delight & Secret need was ‘SaaS’ or something very close to it. Quite a few, from the potential customers side did agree verbally.

Coming to the point; Is India Ready? My experience says ‘Yes’ or may be atleast a few are ready. The learning we took from our meetings was that it is not about educating the customer on SaaS. Its about telling them “improved utilization of the IT budget”, and, YES we can lead.

Well said Shyam. From a corporates perspective, its better to buy a per month license as compared to a product license with a trailor load of baggage.

User based or monthly fee would not make much of a difference, while usage based fee would be of immense interest in India. Atleast, that is what we see.

However, the concern mentioned above such as a usage based fee for individuals like us or corporates is something that we should be looking forward for.

Adios!!

I have recently started SaaSBurst (www.saasburst.com) and would invite you’ll to contribute in tracking the SaaS industry.

Cheers
Sahil

One, the ASP model in BPO is already far ahead than in many other industries, growing by over 27% on a y-o-y basis.

Two, large companies like VSNL, Eagle, and new entrants like Huawei are taking it further not just in market growth but in offering. Now you have an end-to-end Service-Solution, with hardware, Software and Bandwidth, all thrown in by a single provider. The Customer has the choice of taking what (s)he wants and paying-per-use.

Three, in the coming years BPO will make IT its sub-set. Funny since we started as ITeS, a sub-set of IT, not knowing any better then. I say this, and use a term I often use, EAAS (everything as a service). Look at what is happening in the global ecomony with extreme pressures on BPOs. The ASP model offers flexibility to choose among options, cost benefits and most importantly newer additions to the offering at no extra capex. The vendor does timely innovations and developments for the customer.

Four, for the vendor and the market, since the vendor has so many customers on a single solution the feedback they get is very valuable and additions (or alterations) can be made to the service-solution so that everyone benefits. A lot of new features come up simply by having a diverse set using the ASP.

Five, there are not really many solutions on the pay-per-use (ASP) model for the KPO Industry. I for one would like to see a vendor get up and do something about it. Solutions for the Healthcare, Analytics, LPO verticals, among many others have a very un-stated need today. Given that they face the same pressures as any other BPO would.

To sum up your headline, India has been ready for it for over 2 years now. We need to look around for action. Its already started and the need of the hour is to accelerate and take full advantage.

I’d be happy to take critics and queries. If the moderator approves it, you may write to me at editor (at) bponews (dot) in

Cheers!

My concerns. There are just too few vertical applications for which there are robust SaaS offerings. Few large companies are going to use a generalized order entry or billing system. Or have zero customizations. Just as importantly, few of today’s SaaS vendors would stand the security and SLA scrutiny of large company due diligence.

I think a far more logical solution for large companies will be a hybrid - what I call SaCS - a customized service. It is an aggressively negotiated software license and maintenance contract, combined with an on-demand outsourcing arrangement. The outsourcing would be a no-capex, utility computing, fractional resource, shared infrastructure, flex capacity with robust data center, connectivity, disaster recovery and security standards. Not completely multi-tenant, but uses multi-tenant concepts in appropriate areas.

A far more logical solution for large companies will be a customized hybrid. It could be an aggressively negotiated software license and maintenance contract, combined with an on-demand outsourcing arrangement. The outsourcing would be a no-capex, utility computing, fractional resource, shared infrastructure, flex capacity with robust data center, connectivity, disaster recovery and security standards. Not completely multi-tenant, but uses multi-tenant concepts in appropriate areas.

Up anyone?