Oracle is witnessing tremendous growth in SaaS space globally and in India. Overall, the double-digit growth has been consistent for the last three years in India. The company is growing 3-4x times the market in apps which is a clear indicator that it is taking share from competitors, says Prasad Rai, Vice President, Applications, Oracle India in an interview with Express Computer
Some edited excerpts:
What trends do you see in SaaS space in India? Indian SaaS sector is booming. According to NASSCOM, Indian SaaS market is likely to grow to $3.3 – $3.4 billion in 2022 from $407 million in 2016, which turns out to be 36% of current annual growth. Gartner predicts that the public cloud services market will grow to $266.4 billion in 2020, up from $227.8 billion in 2019. Of this, SaaS will be the biggest contributor — projected to grow to $116 billion. This will be largely on the back of talent availability, a lower cost workforce and adoption of emerging technologies like AI. India’s share in the global SaaS market is only 2.6%.
However, in the next 5 years, it is predicted to raise triple and be 8%. Cloud application services (SaaS) is the segment where end-user firms in India will spend the most and represent 42 per cent of overall public cloud services end-user spending in 2020. End-user spending on SaaS cloud application services in India will total $1.4 billion in 2020, an increase of more than 21 per cent year-over-year. Indian businesses are adopting “cloud-first” or “cloud only” strategy. Since SaaS provides the flexibility of subscription-based model. Additionally, SaaS adoption is associated with a lower cost of entry, which is one of the main reasons for the high investment in this segment, as India is a price-sensitive market.
Today, the country is witnessing a surge of young SaaS players who are on the way to making India a SaaS powerhouse. Companies of every size across industries are using technology solutions in order to remain competitive. The growth of SaaS spending is fuelled by increased end-user spending on customer relationship management (CRM), as organizations in India move away from commercial off-the-shelf (COTS) and license-based on-premises software to a subscription-based SaaS model to gain agility, innovation and cost efficiency. SaaS has become synonymous with efficiency, innovation, performance backed by business insights.
What kind of traction is Oracle witnessing in the SaaS space in India? How is it faring vis-à-vis global markets?We are witnessing tremendous growth in SaaS space globally and in India. Overall, the double-digit growth has been consistent for the last three years in India. Customers are excited and encouraged with the benefits Oracle is providing them. We are growing 3-4x times the market in apps which is a clear indicator that we are taking share from competitors. In Q2 FY20, we saw our Fusion ERP revenue up by 37%. Growth in ERP cloud has been driving revenues for us and we have seen a 50%+ YoY growth coming in from Fusion ERP in India.
India, as a market, is very exciting and rapidly growing market for Oracle. Customers have taken to the SaaS solutions very quickly and we are seeing large iconic customers deploying our SaaS solutions. Just to give you an idea our Fusion ERP and HCM cloud applications suite revenues grew 32% in FY19.
Similarly, if you look at any of our other areas like Go-Live which means the number of customers who have not only acquired the cloud solutions but also implemented and then started using them. That number is also going north of the 50% since FY18, which is very high growth for the software space, which is getting a lot of attention for India in the SaaS space. What really helps us is that we can draw on the experiences and skills of people across a much larger territory some of which are advanced nations and therefore bring to our customers some very innovative solutions that can help them see the benefits.
Our customer list includes some iconic names like Taj Hotels, Hindalco, The Tata Group, Reliance, AU Finance, Adani, State Bank of India, Bajaj Electricals. They are conglomerates, very large organizations and they have put their core applications on the cloud that have an impact on their business, their customers and their people. That validates the fact that Oracle SaaS is mainstream and more importantly, it is getting value to the its customers.
Oracle recently announced the availability of applications in Gen2 Cloud Data Center. What does it signify for Oracle SaaS customers in India?The deployment of Oracle Cloud Regions in India means that Oracle Cloud Applications can now be leveraged by existing and new customers, including those sectors that are bound by the country’s regulatory environment such as public sector or banking and telecom companies.
The announcement is a sign of the continued growth in Oracle’s Cloud business in India. As hundreds of new features like AI/ML get added to Oracle Cloud Applications, more organisations in India are choosing Oracle to modernise and automate a wide spectrum of business functions including finance (ERP), human resources (HCM), supply chain (SCM), commerce, marketing, sales, and services (CX).
New customers include Adani Group, Apollo Tyres, All India Council for Technical Education (AICTE), Aurobindo Pharma, Bajaj Electricals, Bajaj Finance, Bharti Airtel, Century Textiles, Cure.fit, Dalmia Group, Edelweiss Financial Services, Gangaram Hospitals, Grasim (Aditya Birla Group), IDFC First Bank, KLAY Chain of Preschools, Ola Cabs, OYO Rooms, Reliance Capital, Tata Sons, Unilever and Yes Bank.
Are there any specific SaaS apps that are growing faster in demand over the others? Please also specify the key reasons behind the growth.We are observing a substantial y-o-y growth in SaaS revenue, making India one of the most significant contributors to the Asia Pacific (APAC) revenues for Oracle. Globally, in FY19, first quarter, our ERP business grew 30% year over year globally, much faster than our traditional software. We already have well over 20,000 customers including NetSuite across the globe.
With the growth coming from not just from ERP, but also from HR and customer experience, we will be in a position to be almost an entirely SaaS base company. So, the Indian growth as far as SaaS is concerned, is about 31-32% year over year and our fusion ERP growth which is the cloud growth is an excess of 50%. So, we are actually outpacing the market itself and acquiring market share from the competition.
We still have a big customer base using on premise ERP solutions. This customer base presents a big opportunity to us. Especially for such customers, we bring migration packages like SOAR, which accelerate their journey to cloud even more so, it accelerates the migration process. The SOAR program helps them accelerate their upgradation to the cloud. It takes a lot of the aspects of moving data and fast-tracks their set-up in the cloud, reducing the amount of time.
If the customer is an existing on-premise customer – Oracle is going to provide them with the value of SOAR. Which means the customer can get to cloud sooner and faster and can do it with less risk, less time and less cost. Oracle SOAR ensures that this is the last upgrade that our customers will ever do because all the future upgrades will be managed by Oracle.SOAR can help our customers to reduce the time and cost of cloud migration by up to 30 per cent. Our tools enable customers with applications running on-premise to upgrade to Oracle Cloud Applications in as little as 20 weeks. In the process, they are able to eliminate costly legacy customisations and streamline and adopt modern best practices that are built into Oracle Cloud.
What is Oracle’s specific value proposition in the SaaS space vis-a-vis other players in the market?Oracle Cloud Applications is the world’s most complete and innovative suite of applications. It is built on the very latest cloud platform and infrastructure and delivers proven, best-of-breed applications across every business function. With Oracle Cloud Applications, organizations of all sizes can take advantage of a complete and integrated suite of applications to break down silos, quickly and easily embrace the latest innovations, and improve user engagement, collaboration, and performance.
The biggest difference that we bring to the table is that we are the only one in the cloud market that can provide pre- integrated solutions. What that really means is that our customers are able to get benefits of pre-solutions much faster and at a more economical price. We have a judicious blend of applications so that the customer does not have to go through all the trouble and the expenditure of stitching these solutions together. And I think that’s where we really make a difference and that’s where we bring value to the customer and help them because in this world, the agility is becoming more and more important.
To support its customers around the world, Oracle plans to launch 20 new Oracle Cloud regions by the end of 2020, for a total of 36 Oracle Cloud Infrastructure regions. Customers will now have access to all Oracle Cloud Infrastructure services including Oracle Autonomous Database, as well as Oracle Cloud Applications, in these regions. Oracle Cloud has opened 12 regions in the past year and currently operates 16 regions globally—11 commercial and five government—the fastest expansion by any major cloud provider.
The difference that we bring to the table is that we are the only player in the market who can provide complete solutions. Our offerings are pre-integrated. The customer does not have to spend time and effort in integrating various solutions together. So, the biggest strength that we have against any of our competitors is our comprehensive cloud suite. The other benefit that we have is that we have offer a judicious blend of applications consisting of products developed and acquired by Oracle. And together, we bring to the table an absolutely comprehensive range of solutions. Our customer does not have to go through all the trouble and the expenditure of stitching these solutions together. We provide them business flows that are seamless from beginning to end.
For surviving in today’s unforgiving competition, the importance of agility cannot be overstated. And agility can only be derived, if the business does not have to worry about various updates or patching. That can actually be achieved if you have an integrated set of solutions and that’s really what makes a difference for us.
Can you give us specific client examples which have deployed SaaS solutions from Oracle and state the benefits they have got?We have some fascinating customer stories to tell. Our customer base consists of customer of every size and from every sector. We have some well- known brands like Airtel, SBI Card, Unilever, Hindalco, Apollo Tyres, Wipro Enterprises, Transworld, TATA Sky, TATA Trusts, Grasim, Taj Hotels, Safexpress, Bajaj Electricals, Reliance Capital and Thomas Cook etc. On the other side, we have start-ups like Klay Play Schools, Oyo Rooms, Ola Cabs and Cure.fit.
Our customer list includes almost every major player from every major industry- telecom, financial services, manufacturing, IT / ITeS, pharma or other services industry. We are seeing traction across all these industries for our SaaS based solutions. Over last three years or so, we think that we are well on our way to be the market leader as far as SaaS is concerned in a matter of just a few quarters from now. We have a robust portfolio of customers and we see a strong demand in the market, and Oracle is the only vendor that provides solutions across the spectrum of SaaS that integrated and makes life so much simpler for our customers.
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