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SaaS StartUp Landscape


Introduction


The term "software as a service" (SaaS) is considered to be part of the nomenclature of cloud computing, along with infrastructure as a service (IaaS), platform as a service (PaaS), desktop as a service (DaaS), managed software as a service (MSaaS), mobile backend as a service (MBaaS), and information technology management as a service (ITMaaS).


SAAS is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. This article covers startups and the problems they encounter in this business environment.


Situation


The concept of SAAS started in the 1960s with IBM and other mainframe providers providing service bureau business. The expansion of the internet led to an increase in the services being provided. This trend has changed as the years progressed.


According to Gatner, Inc the worldwide public cloud services market is projected to grow 18 percent in 2017 from $209.2 billion in 2016 to total $246.8 billion. SAAS sector is to grow 20.1 percent to reach $46.3 billion. The SaaS market is anticipated to see a scantly slower growth over the next few years with increasing maturity of SaaS offerings, namely human capital management (HCM) and customer relationship management (CRM) and the acceleration in the buying of financial applications. Nevertheless, SaaS will remain the second largest segment in the global cloud services market.


The trends also show that developers are taking charge again in SaaS adoption as SDKs and APIs become critical cloud features thus increasing the deployment of vertical SAAS. More small business are the major drivers of SAAS using cloud services for increased sales growth and productivity.


Problem and Implication


Some of the problems faced by some startups are:

  • SaaS applications are hosted in the cloud, far away from the application users. Thus introducing latency to the environment; that’s why some SaaS models are not suitable for applications that requiring response times in the milliseconds.

  • Security: Most companies whether they are on private or public deployment worry about their sensitive data processes. Security concerns is one of the major issues plaguing SAAS marketing.

  • Outages: No matter how carefully laid out the software environment is, it is still prone to outages. If this goes on for a long time, it wreaks havoc on the business.

  • Data mobility: Some mobility is required in business. Most businesses have complained of data lock-in which has affected their decision to change cloud providers. The major idea is to avoid data lock-in.

  • Regulations: Compliance to the regulations is the backbone to business success. Noncompliance has led to closure of businesses and startups. Thus it is important to use SAAS providers that comply with government rules and regulations in order to avoid business problems.


Need Payoff


~6000 companies in the sector, 472 funded in last 5 years, $347M invested in 2016/17. Mumbai Angels, Blume Ventures, Accel Partners, TLabs, IDG Ventures are major investors.


  1. Business Intelligence: 245 companies in the sector with an overall funding amount of $191.1M. There are 4 subsectors here:

Data Analytics: Data models for predictive analytics, forecasting and projections etc.

BI Verticals: BI/ Analytics platforms that are focused on specific functions within an enterprise (F&A, Sales and marketing, SCM, IT, HR, etc.); Also includes companies that provide solutions for multiple industries or a particular industry.


Data Preparation: Data integration, transformation, cleaning and loading before visualization process.


Suite: Solutions providing data discovery, integration and visualization.


  1. Customer Service Software: Comprehensive suite of tools for customer service across multiple channels. There are 192 companies founded in the last 8 years with an overall funding amount of

Help Desk: Software that enables customer support agents to receive, process and respond to service requests.


Feedback Analytics: Software to capture feedback and take action to improve customer experience.


Call Center: Cloud based inbound, outbound and blended calling solutions.


Interaction Analytics: Multi-channel customer interactions analytics solutions.


Self Service: Online software and tools for providing self service solutions to customers.


  1. Healthcare: Cloud based solutions for the healthcare and pharma sector. There have been 151 companies founded in the last 8 years with an overall funding amount of $150M. There are 4 subsectors here:

Hospital Management and Health Information Systems: Includes solutions for managing hospitals, clinics, individual practice and diagnostics center


Software Suite: Software solutions for healthcare institutions offering an integrated platform for management, EMR, appointment booking etc.


Pharma Supply chain: Cloud hosted solutions for pharma supply chain management

Clinical Research: Includes technological tools which help a doctor in decision support for diagnostics and therapeutics.


  1. HR Tech: SaaS solutions for human capital sourcing and management. There have been 566 companies founded in the last 8 years with an overall funding amount of $81.1M. There are 4 subsectors here:

Recruiter Tech Solutions: Technology solutions for recruiters to track applications, conduct assessments and interviews and shortlist candidates.


Sourcing: Online platforms for businesses and companies to source, assess, interview and shortlist candidates.


HRMS: Integrated suite of technologies that aid in HR management. Solutions include employee onboarding, benefits administration, and payroll and employee management.


Corporate Training Management: Software that helps enterprises train and develop corporate workforce.

  1. SMB SaaS: SaaS solutions for SMBs to manage their business functions and processes. There have been 716 companies founded in the last 8 years with an overall funding amount of $130M. There are 2 subsectors here:

Vertical: SaaS solutions for SMBs catering to various verticals such as construction, pharma, hospitality, restaurants etc to manage their business functions and processes such as communication, marketing, customer feedback etc.


Horizontal: Horizontal SaaS solutions for SMBs to manage their business functions and processes such as communication, marketing, customer feedback etc.

  1. E-commerce Enablers: Solutions for businesses to go online, manage operations, marketing, payments, analytics. There have been 348 companies founded in the last 8 years with an overall investment of 117M. There are 5 subsectors here:

Shopping Cart: Provides online stores that help businesses to sell products or services.

Backend: Manage back-end processes such as order management, shipping, fulfilment.


E-commerce Tools: Add ons for e-commerce sites including product search, price comparison and product recommendation.


Suite: End to end solutions like hosting, storefront, payment, marketing, order management for ecommerce companies.


Marketing: Marketing and engagement solutions for e-commerce companies.

  1. Education: Cloud based school management systems, LMS, admission management, school website builder platforms. There have been 512 companies founded in the last 8 years with an overall funding amount of $90M. There are 5 subsectors here:

School Management: Cloud based school management systems.


LMS: Cloud based e-learning platforms for students, teachers and institutes.


Assessment Platform: Online assessment and analytics platform for teachers and students.

Learning Platform: Cloud based learning platforms for students.


Application Management: Online platforms for schools to list admissions, accept and manage applications.

  1. Enterprise Collaboration: Solutions for organizational teams to collaborate on, track and mange projects in-house or from remote locations. There have been 302 companies founded in the last 8 years with an overall spending amount of $40.2M. There are 5 subsectors here:

Productivity: Productivity improvement solutions for enterprises.


Project Management: Solutions for Team management, task management, End to End Project lifecycle management (Scheduling, execution, Control and Monitoring)


Content Management: Software solution that combines the capture, search and networking of documents with digital archiving, document management and workflow.


Enterprise Communication: Software solution that enables employees to communicate with the team members. These software solutions include unified communication software, conferencing solutions, messaging and chat applications.


Enterprise Social Platforms: Private communication within an organization through a social networking platform; Solutions include Wiki, Forum, Chat, blog, Document collaboration, Idea management Platforms.

  1. Marketing: Cloud based tools various marketing automation and applications. There have been 482 companies founded in the last 8 years with an overall funding amount of $56M. There are 5 subsectors here:

Social: Tools for lead generation, profiling and engagement across social media channels.


Mobile: Tools that allow marketers to engage customers on mobile devices.


Email Marketing: SaaS platforms for email marketing, campaign management, in-app messenger, browser and mobile push messages.


Content Marketing: Social content aggregators, APIs and platforms to meet content marketing requirements.


Customer Analytics: Customer behavior monitoring, analytics and engagement tools.

  1. DevTools: Website and application development, testing tools. There have been 56 companies founded in the last 8 years with an overall funding amount of $46M. There are 5 subsectors here:

API providers: API developers and development tools.


Testing: Website tracking and testing applications and tools.


Email Marketing: Companies providing chatbot development platforms and software solutions.


Content Marketing: Tools that help developers to compile code as well as for visual and textual development environments.


Customer Analytics: Error reporting, tracking and analytics solutions for developers.

  1. Mobile DevTools: Solutions for mobile applications developments, testing and analytics. There are 115 companies founded in the last 8 years with an overall funding amount of $12.9M. There are 5 subsectors here:

DIY – Frontend Platform: Self Service DIY platforms to users and businesses to develop web and mobile apps.


App Testing: App testing for functionality, load, usability, performance, security and other features.


App Security: Companies providing mobile application security testing solutions and services.


MADP: Mobile Application development platform - development and deployment framework that provides tools for client, server and middleware for mobile.


App Prototyping: Interactive prototypes for design and functional feasibility, sharing and collaboration.

  1. IT Operations: IT operations monitoring, management and automation software products. There are 29 companies founded in the last 8 years with an overall funding amount of $19M. There are 5 subsectors here:

ITSM: IT Service Management ensures resolution of requests and issues, deployment of software, tracking of assets.


Website Monitoring: Monitoring of website availability, performance and load testing.


Monitoring: Monitoring application, network, infrastructure, cloud, website, server, DB and logs.


Operations Analytics: Provides real time insight into IT operations metrics.


IT Automation: Automation of manual IT operations processes.

  1. Legal Tech: Contracts management and analytics solutions. There have been 37 companies founded in the last 8 years with an overall funding amount of $22M in the 2015/16 business year. There are 5 subsectors here:

Legal Practice Management: Law practice management for end to end client intake to invoice, features to manage cases, clients, documents, bills, appointments, time tracking, reporting, and accounting.


IP Management: IP Trademarks, copyrights, and patents analytics, filling, tracking and end-to- end management.


Productivity Tools: Productivity solutions for lawyers and legal teams.


Legal Contract Management Contract creation, review and tracking using contract life cycle management.


Legal Research: Legal database resources and analytics to help lawyers to make data-driven decisions about case strategy and tactics for analyzing a particular judge, party, law firm, attorney, or IP portfolio.

  1. Banking Tech: Companies offering cloud based technology solutions to banks. There have been 25 companies in the last 8 years with an overall funding amount of $18M in the 2015 business year. There are 3 subsectors here:

Software Solutions: Platforms offerings software solutions that help lenders to manage their back-end operations.


Fraud and Risk Management: Platforms helping institutions to reduce frauds.


Front End Channel Providers: Platforms offering a digital front end to banks.

  1. Logistics: Software solutions for logistics and ecommerce companies to manage their shipments, delivery routes and fleets. These also include analytics solutions for businesses to gather insights on their operations. There are 59 companies founded in the last 8 years with an overall funding amount of $19M in the 2015 business year.

  2. There are 4 subsectors here:

Asset Tracking and Fleet Management: Software solutions for logistics operators to track and manage their fleet and on-field personnel.


Analytics: Analytics solutions for businesses to analyze their operations and optimize routes and bring in operational improvements.


Delivery Management: Software solutions for businesses to manage their delivery processes.


Shipping Management: Solutions to help online sellers manage their shipments and send notifications.

  1. Sales Force Automation: Mobile and cloud based sales pitching, marketing, and management and analysis tools. There have been 235 companies in the last 8 years with an overall funding amount of $35M. There are 5 subsectors here:

CRM: Companies which offer end-to-end solutions for businesses to manage their sales activities multiple channels.


Sales Training: Cloud-based platform for sales manager to train and assess new sales reps.


Productivity Tools: Tools to increase the productivity by integrating multiple data sources on a common platform and generating actionable insights


Performance Management: Performance management tools for sales teams.


Content Management System: Tools to distribute, manage and update content in devices across the sales network.

  1. Enterprise Security: Software solutions for businesses and enterprises to manage, monitor and implement security measures for their networks, data, website as well as third party devices. There are 43 companies founded in the last 8 years with an overall funding amount of $22M.

  2. There are 5 subsectors here:

Website Security: Products and solutions that deals specifically with security of websites, web applications and web services.


BYOD Security: Security for access to enterprise network and data by a non-company device.


IAM: Framework for business processes that facilitates the management of electronic identities.


Data Security: Products and solutions to mitigate the risks of attacks and data breaches across the spectrum of end-user platforms.


Network Security: Network security solutions for enterprises.


Some interesting companies are:


Practo (2008, Bangalore): Practice management software for doctors and a platform for consumers to search for doctors. Matrix Partners India, Sequoia Capital, Thrive Capital, Altimeter Capital, Sofina, ruNet, Tencent, InnoVen Capital, Google Capital are major investors investing $179.5M.


Freshdesk (2010, Chennai): Cloud-based customer helpdesk solutions. Accel Partners, Sequoia Capital, Tiger Global Management, Google Capital are major investors with a funding amount of $150.5M.


References

  1. The WWW

  2. Tracxn Report, May 2017

#AdeniyiAdedejiMoses #LeadengineCorporation #Leadengine #Sri #Srivathshan #SaaSStartup #SaaSLandscape #Tracxn

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