The Promise Of SaaS
Software vendors need not run applications on clients’ computers or servers. SaaS delivers them over the browser using ready platforms from Microsoft (Azure), Salesforce (Heroku), Amazon (Web Services) and Google (App engine) to build and sell such applications. Take Zoho Corp, founded by Sridhar Vembu. It built a customer relationship and business process app on the cloud using open source platforms such as Apache. Zoho offered the product free initially. The product went viral. Its office suites now cost $300 a year, against $600 that a large vendor charges. Zoho’s business comes mainly from SMEs. It now has over 5 million users and sources say it has reached $100 million in revenues in two years.

The SaaS business is based on subscriptions and pay-as-you-go concept. Goel says there will not be one big player in SaaS, but it will have millions of entrepreneurs. Success will depend on scale as the cost of the service is low. Take the case of Mathrubootham’s Freshdesk. A firm registers its brand managers or customer support team with Freshdesk for a fee of $9-29 per agent per month (one-fourth of what large firms charge). When a customer makes a reference about the firm on Twitter or Facebook, the customer support team is notified by Freshdesk’s software. They respond in real time, helping prevent erosion of brand value. This is integrated on the mobile too. The six-month-old firm already has 127 clients and is likely to close a Series-A funding from a venture capitalist.

SUNNY GHOSH (L) RALPH A. VAZ DIRECTOR AND CEO, AND FOUNDER AND CTO, WOLF FRAMEWORKS Wolf Frameworks creates platforms for startups to build their own SaaS applications, much like Microsoft or Google does, but at an affordable price (BW pic by Bornali B.)

Similarly, Chennai-based Vembu Technologies helps back up data on laptops, servers and desktops through the cloud. The cost depends on the storage used. Vembu did not disclose its revenues, but it has over 2,000 customers who sell the service to 30,000 SMEs. After six years in the business, it turned profitable in 2009 and targets to grow from 100 employees to 1,000 in this decade. “Bootstrapping is a great way to build technology firms and the cloud has helped us focus more on our core strength — technology,” says CEO and founder Sekar Vembu.

Karnakota says SaaS firms have a three-fold advantage: first, they can build their own platform, sourced from a specialist firm; second, startups could use mentors from large firms through fora such as Nasscom; and, finally, the cloud helps them hit the market the fastest using the Web. Take Insightly, a one-man CRM SaaS firm in Perth. Its product, also for small businesses, already has thousands of customers, without incurring any marketing cost. Zoho’s lead evangelist Raju Vagesna says for the first time the cloud can help Indian engineers build products and market them, as it has already shrunk marketing costs. “An engineering firm should not forget its core — innovation,” says Vagesna.

There are also some promising but young startups. Bangalore’s six-month-old Pawaa Software, founded by Prakash Baskaran, has, for instance, built an application on Google App Engine. It lets users control attachments sent to multiple users by blocking certain individuals and also adding individuals that need to see the attachment, even after the email has been sent. Bangalore-based QuickoLabs, founded by Khadim Batti, has released SearchEnabler — a downloadable on-demand SaaS search engine optimiser. It lets SMEs create a Web strategy at a low cost. Gurgaon-based Srijan Technologies founded by Rahul Dewan has a product, Moneno. It helps analyse attitudes of people without doing general surveys. Yet another Bangalore-based firm Semgel Technologies, founded by Harish Kumar, too has a SaaS product that helps researchers analyse data more intuitively by generating live reports based on live queries.

The Power Of PaaS
Platform-as-a-service is the catalyst for most innovations in SaaS. PaaS refers to an underlying chassis for software development, storage and hosting SaaS over the Internet. It facilitates operations without the cost of buying and configuring the hardware, middleware and software. PaaS has been dominated by players such as Microsoft, Amazon, Google, Wolf Frameworks and Salesforce. But companies such as Chennai’s OrangeScape partner with IT services majors such as TCS, Cognizant, Wipro to provide virtual PaaS, for creating business process oriented applications for Global 2000 enterprise customers in the US, UK and India.

For example, Fullerton India — an SME-focused NBFC — runs its business processes on OrangeScape and integrates with its core banking application. OrangeScape has unique cross-cloud capability that allows deployment on Google App Engine, Azure, Amazon AWS or on customer’s own private cloud or data centre. The pricing is based on the number of end-users. “We had to rewrite tens of thousands of lines of code two years ago when we moved to the cloud,” says Suresh Sambandam, CEO, OrangeScape. Only the cloud could have empowered this 45+ people organisation to create platforms that compete with the likes of IBM and Oracle. Most recently, OrangeScape won a large deal of 7,000 users in UK along with TCS.