Challenges in building a SaaS startup in India: Key Learnings

Challenges in building a SaaS startup in India: Key Learnings

Engineering any startup company can be quite a challenge. India is considered one of the central hubs of business and quite a number of entrepreneurs have come up in the recent years, with very innovative ideas. However, conceptualisation is just the first step. Having a product and building a business around it, can be two entirely different things. The same applies to SaaS startups in India, and many challenges do pop-up! In this article, we will look at a few of them from an economic, strategic and technical point of view, and the meaningful lessons they teach us.

A Definition

Before we look at the challenges, let’s get our jargon right. SaaS stands for Software as a service. Software, as we know it, is the information stored online that helps the computer in its operations. When software and the data associated with it our hosted in the internet, it is called ‘on-demand’ software or, in short, SaaS. To host SaaS online, we require a client( a computer or server) and to access it, a web browser, on the internet. The many uses of SaaS for businesses include accounting, collaboration, customer relationship management (CRM), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management (CM) service desk management,etc.

Now to the road-blocks!

Human Resource and Funding

Most people seem to believe that anSaaS is run with 5-10 people sitting around computers. This belief can be wrong, as there are SaaS companies with a strength of 150 and more. Besides,the challenge of hiring expert staff, there are equipment and server costs.

The expenses can be met through reliable customers. The Indian market is just opening up to the technology available to them, and once the SaaS idea has caught on, there will be many small and medium businesses (SMB’s) ready to invest in the technology. However, as long as SMB’s are not very tech-savvy, there will always be the fear of the unknown, ie. Of SaaS. Also, the Indian market is also price conspicuous and many SMB’s will see to reduce their IT expenditure.

We are also less open to the Do-It-Yourself model, common with SaaS systems, hence a mixture of online and offline communication has to be used.

To address the economic needs of SMB’s, SaaS startups need to provide services at an affordable price. Introducing pay per usage packages or monthly/yearly subscriptions helps.


The Cloud or the Internet being one of the key requirements for SaaS, the internet connectivity in India being limited to prominent cities poses a problem. However, with private companies trying to take internet services to every doorstep through ingenious wifi, 3G plans, there can be improvement.

Customer Support

With SaaS, no client (here, the people) or customer is a onetime transaction. On-going efficient service is required to satisfy present customers and to inspire new ones. This can be achieved by providing consistent availability, an intuitive interface which is customizable and automatic upgrades. The goal is to offer SaaS, not as a product but a service, with new and improved features. The high user needs, for eg. of companies like Google, have to be met.

Protection and Security

Protecting servers from viruses and hackers is crucial. In India, this is one of the most common concerns of SaaS investors and to overcome it means to inspire trust in customers.

Another thing customers worry about is the security of their sensitive data. To store data in reliable hardware and not third party providers is impedimental. In India, outsourcing being a common practice can result in reduced security and should be avoided.

Insecurity can also be avoided through user-authentication, a process by which only authorised personnel gain access to the software through a key. This is especially to be remembered in multi-tenancy services (which serve multiple client organisations).


The key to cross these obstacles, and come out at the top, despite the high competition in the SaaS market and build a successful SaaS organisation is to be continually on the brink of innovation, with persistent evolution of new products, be  automatized and have a trustworthy, secure service. A growing market such as India will continue to offer more SMB’s as investors if only the technical and monetary challenges are overcome.

About the Author

The article is written by Ankit Jain, Founder at VoiceTree Technologies.

[Editor’s Note: This is part of a sponsored series by VoiceTree. VoiceTree provides complete call management solutions for small businesses to provide simpler affordable telephony.]

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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Challenges in building a SaaS startup in India: Key Learnings-Inc42 Media
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