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Success with Saas

Chennai may not be as high profile as Bengaluru or Mumbai when it comes to start-up activity. But where it does score over other Indian cities is in the overwhelming presence of software-as-a-service (SaaS) ventures. (With SaaS, one can deliver software to the end user via the Web, and so geography is no barrier for both acquiring customers and attracting competition.)


The beginning of this trend is identified with Zoho, which spotted cloud, of which one key aspect is SaaS, as an opportunity as early as the middle of the last decade. Zoho’s products today compete with the likes of salesforce.com and Google.

Cloud computing is disrupting the IT industry, severely challenging a world in which hardware players and system integrators have been thriving for decades. In other words, cloud is challenging the old world tech order.

Suresh Sambandam, the founder and CEO of OrangeScape, which seeks to simplify business application development, estimates there are about 100 companies in Chennai in the SaaS space, 85 per cent of whom are start-ups. There is so much activity in this space that there was also a recent mentorship event called SaaSx, run by and for SaaS entrepreneurs.

Today, the Chennai SaaS space has names like Freshdesk (into customer support), Indix (product database), Unmetric (social media brand intelligence), and Chargebee (billing platform), which have got venture funded in recent years. Sambandam says around $100 million of investments have come into this space in the last three-four years. He expects about $300 million in revenues from customers in another year or two.

Girish Mathrubootham, CEO and founder of Freshdesk, points to how Chennai has emerged as “a hub for SaaS startups” after historically being known for enterprise tech product companies such as Ramco Systems. He says the city always had the engineering talent but not the startup ecosystem. “Venture capitalists would think twice before investing in a Chennai-based tech company. Now all that has changed.”

The way SaaS startups are growing, some of them have potential to become “Chennai’s billion dollar unicorns,” says Vijay Anand, founder and CEO, The Startup Centre, an accelerator for tech start-ups. Many of these entrepreneurs are first-timers. Anand says, “They are at the helm of fast growing organisations, and by virtue of that are very approachable, humble and are willing to mentor the next wave of entrepreneurs.”Hindu

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