Big demand for SaaS from Indian SMBs

Salesforce.com was founded in 1999 and is now the market and technology leader in on-demand business services, with more than 50 per cent of the market. The company’s Salesforce suite of on-demand applications enables customers to manage and share all of their sales, support, marketing and partner information on demand.

Steve Russell, APAC president and CEO of Salesforce.com, spoke to Pragati Simlote of CyberMedia News about the company’s India strategy and its expectations from the India market. Excerpts:

How has the journey been for Salesforce.com?

Salesforce.com delivers more than just a powerful, easy-to-use customer relationship management (CRM) product. It offers a complete architecture that empowers every business to experience the benefits of on-demand throughout its entire organization.

As of July 31, 2006, we manage customer information for approximately 24,800 customers and approximately 5,01,000 paying subscribers. Our revenues for FY 2006 (ending January 31, 2006) were $309.8 million in total. We are also the first SaaS provider to generate $100 million+ in revenue in a quarter and have more than 1,600 employees worldwide.

How do you help the developers realize their potential?

AppExchange, Salesforce.com's on-demand platform, allows customers and partners to build powerful new applications quickly and easily, customize and integrate the Salesforce suite to meet their unique business needs, and distribute and sell on-demand applications. The AppExchange is the first online service for sharing business applications. It makes finding and installing new on-demand apps as easy as downloading a song or buying a book online. Many of the applications are free and all of them are pre-integrated with Salesforce. With just a few clicks, these apps can be installed into a company's salesforce.com environment and begin delivering added functionality immediately.

The AppExchange is a simple and effective way for independent software vendors (ISVs) to distribute applications to the largest audience of on-demand subscribers in the world. Developers at companies of all sizes are building applications on Salesforce.com's on-demand platform and bringing them to market on the AppExchange. At the same time, salesforce.com subscribers have discovered the advantages of this new model for creating and sharing applications.

In its first 120 days, the AppExchange has been registered more than 1,22,000 test drives and 8,600 customer installations of more than 250 applications now available on the AppExchange.

How bullish are you about Software as a Service (SaaS) market in India?

SaaS is an emerging software delivery model in which application software is delivered remotely through a subscription-based fee rather than being sold for perpetual use. According to Springboard research, India saw revenues increase over 53 per cent to $7 million in 2005, and the market is expected to grow to $48 million by 2008, representing the fastest growth in the region. According to IDC, SaaS market in Asia Pacific to grow at 26.5 per cent CAGR – surpassing EMEA in 2009 (2004-2009).

India has a mature IT market and people are interested in SaaS here. We are undertaking city tours to provide companies with educational opportunity for CRM, sales force automation (SFA), etc.

How do you plan to target the growing SMB market in India?

There are five million SMBs in India and they have a growing appetite for SaaS. A survey of Indian Small and Medium-sized Businesses (SMBs) identified cost benefits as the primary driver for SaaS adoption, but ease of use and business benefits were also cited as important market accelerators.

The company did not have much focus till now on India, but we now plan to go after the mid market space. Affordability and time to benefit are the two main advantages of SaaS that SMBs can take advantage of.

What are Salesforce.com’s plans for India?

We are developing plans for initiating an incubation program for SaaS companies next year. This incubation program would assist Indian entrepreneurs and developers in creating software-as-a-service businesses. We would like to do this in cooperation with some of the major IT service providers and educational and training institutions in India.

What is your go to market strategy in India?

According to Internet Service Providers’ Association of India (ISPAI), broadband is growing at 20 per cent per month. With this, the SaaS adoption in India would also rise and we expect a diversion of traditional hardware investment towards broadband. The next 12-18 months are an exciting window for us in India. Our go to market strategy includes strengthening our marketing presence, educating our customers, appointing more sales engineers. We also plan to expand to other cities and will be there where the customer is.

We have also tied-up with Theikos, a Salesforce.com consulting partner in India to release ‘Instant CRM’, a bundled package providing Indian businesses instant access to enterprise-class on-demand CRM solutions.

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