BANGALORE, INDIA: The adoption of software-as-a-service (SaaS) among small and medium businesses (SMBs) in India is faster than the large enterprises, said Venguswamy Ramaswamy, Global Head - SMB, Tata Consultancy Services, Ltd.

According to Ramaswamy, while SaaS in India is still developing, "adoption in the SMBs is faster than large businesses." The key challenges such as technology obsolescence and ability to generate cash flows for the business are mainly why SMBs find technology an attractive option, he said.

"The idea of not having to spend on technology infrastructure to run high performance applications in a SaaS model is an attractive option for SMBs. They would rather prefer to invest on business assets where as SaaS helps covert their business into an Opex model," he added.

Ramaswamy said that integrating SaaS with Web 2.0 would result in an lot of innovative services.

Citing an example, to prove a point on how SaaS can deliver a lot more than office suites and accounting solutions to the $30 billion jewelry community, Ramaswamy said that a key component of the service revenue goes into design acquisition and that designers can build a business model around it by using design software, and SaaS acting as a broker to deliver complex graphics on the Web. This way, designs can be shared and is open for innovation, while providing an opportunity to evolve the Opensource gateway for SaaS applications.

Quoting research reports, he said, "India growing at 75 percent CAGR is a good indication that SaaS has a good opportunity in India."

However one of the biggest challenges faced by technology is the integration layer which needs to be better defined. He said that SaaS has a huge prospect for growth by providing niche applications rather than the main business applications.