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Software delivery a SaaS story

June 02, 2006 14:43 IST
Domestic software vendors are now increasingly adopting the 'Software-as-a-Service' delivery model to satisfy the highly demanding end-users, industry experts say.

Moving past the application service provider bubble and its subsequent bust in the 1990's, SaaS stands for delivery, maintenance and daily technical operation and support of an application for a subscription fee.

The new offering, according to Wikipedia.com, will "ring in the end of traditional software as we know it".

"The model is a huge success in the US and European markets with most of the large vendors adopting it and is now moving offshore," says Ron Lang, chief executive officer, Sungard's Enterprise Solutions group.

The $4 billion company was a pioneer in SaaS model and counts it as one of its strengths. "Over 90 per cent of our revenues come from SaaS, which is a recurring revenue model," says Lang.

i-flex Solutions is a domestic major which uses the SaaS delivery model the banking and financial services industry in the country.

It had set up a subsidiary, Flexcel, over three years ago to offer banking solutions as well as data centre operations and deploy, host and manage Flexcube, its proprietary product.

Noting that SaaS in India is finally catching up with the worldwide phenomenon, Venkat Subramaniam, vice-president, Customer Relations, i-flex solutions, and CEO, Flexcel, says, "Flexcel is a Rs 6 crore (Rs 60 million) company that has grown at 40 per cent for the last two years.

We are seeing an increased awareness for our services here and have added five new clients last year compared with one in 2004." Some of the company's clients include Lord Krishna Bank and Kerala State Cooperative Bank.

Seconding Subramaniam's views, Uday Kothari, chief technology officer and director Compulink, an IP-led company with operations mainly in India, says, "Currently a large part of our revenues come from the traditional license model, but customers are now preferring to opt for SaaS and we expect it to account for 20 per cent of our revenues in the future."

Even as India Inc wakes up to SaaS, another community that's betting heavily on the potential of SaaS is venture capitalists.

Amitava Roy, president, Symphony Services, a leading offshore outsource product development company, says, "Of the total VC funding in 2005-06, 80 per cent has gone to start-ups that offer consumer software services as against enterprise application services. The impact of this will be felt three years hence."

Sapna Agarwal in Mumbai/ Pune
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