India’s software industry to reach $1 trillion by 2030: Study

India’s software-as-a-service (SaaS) industry could reach $1 trillion in value and create half million new jobs by 2030, says a new study. This will be pushed by businesses around the world adopting digitalization and automation in the current tech-paced era.

SaaSBoomi, a community of industry founders and builders, consultancy McKinsey & Co and Nasscom, in their report acknowledged that there are more than a thousand funded start-ups and 10 unicorns in India’s SaaS sector, which generates up to $3 billion in annual subscription revenues. It predicts that the number of unicorns could increase 10-fold by 2030, reaching the mark of $1 trillion in value.

“The industry, which currently employs 40,000 workers, could generate annual revenues of as much as $70 billion by 2030 and win as much as 6% of the global market, which is forecast to be worth $1.3 trillion by 2030,” the report said. “However, many startups face challenges in accessing capital during their early stages and attracting skilled talent to grow. The industry may need to boost funding at three to four times the current level to reach their potential over the next 10 years.”

Manav Garg, Founder and CEO of Eka Software Solutions and a Founding Partner at SaaSBoomi, said despite the challenges, India has an exciting opportunity to propel itself on to the wold stage as a SaaS force to be reckoned with. Moreover, the increasing penetration of smartphones and the low data cost are likely to bolster the usage of cloud computing in India, which in turn, is expected to augment the growth of the overall market.

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According to EMR, the multitenant architecture of SaaS, which means that a single version of SaaS solution can be used for all customers, is likely to enhance the scalability and popularity of SaaS solutions in India. On the basis of organization size, the medium and large enterprises account for a significant share in the market, as the demand for SaaS solutions is significantly high from this segment. In medium and large enterprises, SaaS solutions are required for several business applications such as office software, messaging software, payroll processing, customer relationship management (CRM), DBMS, management and enterprise resource planning (ERP) among others. EMR pointed out that the growth of SMEs in India has been significant and is likely to flourish in the forecast period.