With close to 8 mn SMEs in India, of which just 1.9 mn have PC connectivity, there is a huge scope for solution providers. |
Software-as-a-service (SaaS) is not a new concept. It has been available in the market for a long time with Salesforce pioneering the market. However, with bigger players like Microsoft and SAP now offering subscription-based offerings, the market is poised to grow. |
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Microsoft India, for instance, recently announced the availability of its Dynamics suite of enterprise resource planning (ERP) on a subscription model. What this means is that customers need not install it at their premises, as it is available through a partner network who would host these solutions for small and medium enterprises (SME). |
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This will allow SMEs to avoid the upfront capital expenditure that they would have had to invest in if they did it on their own. The customer will have to pay on a monthly basis. |
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Now Microsoft has announced its tie-up with Bangalore-based Affordable Business Solutions. At present, the company offers 3, 5 and 10 user packs. These are priced at Rs 25,000, 35,000 and 60,000, respectively. |
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Sushant Dwivedy, lead, Microsoft business solutions, said, "From the technical resource standpoint, the single most challenge that SMEs face today is retaining talent. Besides, the salaries of IT professionals have gone up considerably. Thus, availability of hosted services is a big impetus for their growth." |
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According to a latest Springboard Research study, awareness and adoption of SaaS across the region has grown significantly. The adoption of SaaS increased 92.5 per cent in 2006 to reach a market size of $154 million. |
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Springboard forecasts that the SaaS market in Asia will reach $1.16 billion by 2010, with a compound annual growth rate of 66 per cent, to comprise 15 per cent of the enterprise software application market. |
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The analyst firm estimated that the Indian market for SaaS was worth $7 million in 2005, representing y-o-y growth of over 53 per cent. A Springboard report expects this market segment to grow to $48 million by 2008, the fastest growth in the Asia Pacific region. |
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Salesforce.com, the company which pioneered the demand- or subscription-based model, increased its India presence in the last two years due to the model's increasing automation among Indian SMEs. |
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Jeremy Cooper, vice-president (marketing), Asia Pacific, Salesforce.com, said, "We have seen tremendous growth in India. For Salesforce.com, India is one of the fastest revenue generator and among the top four countries in the APAC region adopting this model." |
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The subscription model for a customer relationship management from Salesforce is available for as little as $9 (around Rs 360) per user per month. Whereas, a 5-licence based model will cost Rs 150,000. |
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The company early last year announced the availability of AppExchange platform. It is the first on-demand application-sharing service, featuring dozens of pre-built, pre-integrated applications created by Salesforce.com customers, developers and partners. |
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