India is ready for the next milestone in technology: Sass companies

New Delhi (CNN Business) – Two decades ago, India began its transformation The global power of information technology, Ushers in an era of unprecedented wealth and job creation in that country.
Now Asia’s third largest economy is ready for the next best technology frontier: creating a new generation of technology companies. Software, Like the zoom the slack.

The Govit-19 epidemic has forced companies around the world to make large investments in digital infrastructure, which is boosting the influence of suppliers. Software As a service or ScuS. Last year, companies invested an additional $ 15 billion a week in technology as they tried to create a remote work environment. According to a KPMG study.

ScuS companies offer web-based applications that take care of everything from security Software Up to its performance. Zoom, SAP Conquer and Salesforce are the best ScuS companies in the world Message application for work slack.

Department of Software A service in India could reach US $ 1 trillion by 2030 and create nearly half a million new jobs Recent Report The consulting firm McKinsey & Co. and Sass Earth were created by a community of industry leaders.

There are almost a thousand companies of this type in India, 10 of which are unicorns, or Beginnings Worth at least $ 1 billion, according to that report.

“This is going to be a huge opportunity as the IT service industry was in the 1990s,” said Krish Mathrubhumi, CEO of FreshWorks, India’s leading ScuS company. Last month, he a Initial Public Offering (IPO), Joins a series Great tech unicorns Of the country listed on the stock exchange this year.

Freshworks was established over ten years ago in Chennai, South India. Like the Salesforce, it provides Software Help companies manage their customer relationships. It is India’s oldest unicorn, which has raised funds from investors such as Tiger Global and Axel and has more than 50,000 customers. According to data firm Tracxn, the company was last valued at $ 3.5 billion in the 2019 financial round.

Other Indian ScuS companies have found momentum by focusing on key businesses. GenotypeFor example, this is a unicorn Software For the spa and salon industry.

Of ScuS India’s 10 unicorns, six reached that milestone in 2020, attracting the attention of investors around the world. According to a SaaSBoomi report, last year, investors paid $ 1.5 billion to Indian ScuS companies four times more than in 2018 or 2019.

Trusted investors

Investors are excited about ScuS because of the “mass adoption” Software Over the past decade, according to Mohit Patnaik, Managing Director, Sequoia Capital India.

Although India a Small actor In the global ScuS market, investors say the country can dominate the sector for two reasons: its English-speaking developers and the relatively low cost of hiring them.

Thanks to the rise of the Indian IT industry, software engineering is one The most sought after career opportunities in the country.

“India is one of the largest developer communities in the world,” Patnagar told CNN Business. Many of them have worked for some of the world’s largest technology companies.

Abhinav Asthana, co-founder of Postman, noted that his experience as a coach at Yahoo in Bangalore was the main reason for his decision to create the product.

He came up with the idea to create a tool that simplifies the API (Application Programming Interface) testing process. An API is a programming code that defines how two applications interact with each other, and makes it easier for engineers to design and build their own APIs, Postman says.

“We saw how Software At these global companies, we saw that API is a major problem, “Astana told CNN Business.

Right now, Postman is the most valuable ScuS unicorn in India, valued at $ 5.6 billion.

International customers, Indian engineers

The low cost of operating in India is a huge advantage. One step Report by Payne & Company, a consulting firmEntry-level developers in India are paid 85% less than their counterparts in the United States.

“If you are starting a ScuS business in the United States, it is better to have a million dollar customer than a $ 10,000 customer because you have to pay for sales and marketing in that country,” says Prasanna Krishnamurthy, executive partner at ScuS Upeka Accelerator.

“When you serve customers in India, you can get these small and medium enterprises and large companies.”

Most of the ScuS companies focus on global customers, similar to the strategy followed by Indian IT giants like TCS and Infosys. Investors see this as a positive change, as most of India’s oldest unicorns, from Flipkart to BDM, are primarily focused on the domestic market.

Nearly 98% of Fortune 500 companies use Postman’s products, and according to Astana, Freshwork’s first customer was in Australia.

For example ScuS companies are globally better than e-commerce companies like Flipkart in India. They write Software Can be used once and several times.

“Flipkart needs billions of dollars [para crecer internacionalmente]But for a new job, it takes very little capital to go global. “

Indian Entrepreneurs Software They mastered the art of “long distance sales” “in advance”.

“Honestly, in the last two years, everyone needs to understand how to make the best long distance sales,” he added.

Despite the relief, there are some hurdles that Indian companies need to overcome before making the trillion-dollar promise.

It is difficult for Indian engineers trained in IT services to develop the discipline needed to build a product-centric company.

In IT services, Krishnamurthy said, “They are sales systems and they say yes to everything the customer says.” ScuS companies, on the other hand, say 99% of customers do not [potenciales]He added.

India’s initial ecosystem remains immature compared to Silicon Valley. The model said the country does not have a “global technology product brand” despite the sheer size of some local unicorns.

But he hopes future ScuS efforts will change that.

“My personal dream is to see India as a nation of goods,” he added.