The SaaS industry might be on its way to recovery

Posted By: Vanshika Pathak Posted On: Sep 12, 2023
Many listed SaaS companies, including Salesforce, revised their guidance downwards a year ago.. (iStockphoto)

A year ago, US-based SaaS (software as a service) companies such as Salesforce, ServiceNow and Atlassian were concerned about the continuing impact of the global economic slowdown. Revenues dropped and the flow of deals slowed, as clients were reluctant to spend amid economic uncertainty. More than two-thirds of SaaS companies surveyed by Everstage, also a SaaS company, did not meet their targets in the first half of 2022. Many listed SaaS companies, including Salesforce, revised their guidance downwards a year ago.

The gloom was also evident among Indian SaaS companies, which compete in the same market. Most Indian SaaS companies are in a growth phase. They are dependent on venture capital firms, which, in turn, take cues from the performance of global firms. The recent quarter suggests the SaaS industry might be out of the woods, despite macroeconomic uncertainties and greater deal scrutiny by clients.

A recent ICICI Securities report pointed out that revenues of most SaaS companies topped guidance in the June quarter. Combined revenues of the top five global SaaS companies by revenues—Salesforce, Intuit, ServiceNow, Workday and Atlassian—grew 14% on a year-on-year basis.

Margins also improved. It's an indication that there is an overall improvement in the demand for SaaS, even if it's tempered by client concerns about macroeconomic factors. Salesforce, for example, said the industry continues to face “elongated sales cycles and additional deal approval layers", even as it raised its revenue guidance by 1 percentage point to 11% for financial year 2024.

Stock Appreciation

In calendar 2023, the share prices of all top five global SaaS companies have outperformed the Nasdaq Composite index. While their valuations are still lower than their peaks in October 2021, the appreciation in the past year reflects the long-term demand for SaaS.

According to a forecast by market intelligence firm Gartner this April, end users are expected to spend $233 billion on SaaS by 2024—an increase of about 40% from the $167 billion in 2022. IDC, another data provider, pointed out in July that it would be wrong to conclude that CIOs (chief information officers) would stop spending on the cloud because of economic challenges. In fact, the long-term investment agenda is starting to be dominated by “the assessment and use of AI, triggered by generative AI", said IDC. SaaS companies have been responding to that either through acquisitions or by strengthening their AI talent.

VC Pullback

The Indian SaaS industry has been impacted by the venture capital (VC) winter. According to a report by VC firm Bessemer Venture Partners last month, Indian SaaS companies received only $300 million in VC funding in 2023, as of 30 June, against $6 billion in all of 2022. According to data provider Venture Intelligence, VC funding to Indian SaaS companies dropped by about 80% in the first half of 2023 over the first half of 2022.

As global SaaS companies report better-than-expected numbers, investor sentiment for Indian SaaS companies too should improve. Besides, according to Bessemer Venture, Indian SaaS companies are more efficient. “Across revenue ranges and levels of business scale, we observed that Indian SaaS companies have higher efficiency scores than their US counterparts," BVP wrote in its report. The underlying message is that while markets might pick up, and access to funding might improve, SaaS companies will still have to focus on profitability.

Domestic Growth

An upside is a pick-up in domestic demand for SaaS. Bessemer expects annual recurring revenue (ARR) to increase from $13 billion in 2022 to $50 billion by 2030. Some SaaS companies that started with domestic sales have expanded overseas, while others are doing more in India. Salesforce, which employs about 9,000 in India, has said its India business is growing in double digits. Similarly, Zoho, which started by selling globally, has been consistently growing in India.

Yet, for most Indian SaaS companies, growth is expected to be overseas led. “Global markets are a key step for Indian SaaS companies looking to achieve substantial scale (more than $100 million ARR)," Bain & Co wrote in its India SaaS report earlier this year, adding that the US SaaS market was highly competitive. Thus, while the recovery in the global SaaS market presents an opportunity for Indian SaaS companies, winning there could still be challenging.

www.howindialives.com is a database and search engine for public data

Source: Live Mint
Related Posts: SAAS,SAAS INDUSTRY,SALESFORCE,SERVICENOW,ATLASSIAN,EVERSTAGE

Comment on Post

Leave a comment

If you have a News HTS user account, your address will be used to display your profile picture.



You’ve Heard of Quiet Quitting

Posted By: Vishal Maurya Posted On: Aug 28, 2023
You?ve Heard of Quiet Quitting. Now Companies Are Quiet Cutting. (PHOTO ILLUSTRATION BY ELENA SCOTTI/THE WALL STREET JOURNAL, ISTOCK (3))

Workers are waking up to emails and team-meeting requests with a jarring message: They aren’t fired but their jobs are gone.

People on the receiving end of these memos describe running through a range of emotions, from relief that they're still employed to a sense of dread that their bosses secretly want them to leave. They are also facing a labor market that isn't as robust as a year ago, leaving many to believe that the best option is to stay put and hunt internally for a better fit.

Adidas, Adobe, IBM and Salesforce, among others, have reassigned employees as part of corporate restructurings. Mentions of reassignment, or similar terms, during company earnings calls more than tripled between last August and this month, according to data from AlphaSense, a financial-research platform.

“Reassigning is definitely a huge part of the dynamic right now," said Andy Challenger, senior vice president at Challenger, Gray & Christmas, an outplacement firm.

For companies that spent several years—and significant money—to hire top talent, reassigning workers to new roles can be a way to fill jobs vital to future plans while trimming costs associated with old strategies, say human-resources executives.

It can also be a waiting game. Employees to whom it would be costly to pay severance or months of unemployment benefits might decide to leave on their own if they feel stuck in a job they don't want, executive coaches say.

U.S.-based companies announced 42% fewer job cuts in July than they did in June, Challenger said. July job cuts were also 8% lower than the prior-year period, marking the first time this year that monthly job cuts were lower than in 2022.

In interviews and online forums, many workers said they worried whether their reassignment meant they would eventually be pushed out the door. They also wondered how to work their way out of job purgatory and back into a position they actually want.

Source: Live Mint
Related Posts: QUIET QUITTING,LAY OFFS,REASSIGNING,REORGANISATION,HUMAN RESOURCES,TALENT ACQUISITION,IBM,ADIDAS,ADOBE,SALESFORCE

Comment on Post

Leave a comment

If you have a News HTS user account, your address will be used to display your profile picture.



E-comm order volumes jump 26% in FY23

Posted By: Pawan George Posted On: Aug 10, 2023
In FY23, share of tier II and tier III cities as a percentage of the overall e-commerce market was 18.6% and 37.1%. (Bloomberg)

Tier-1 cities led the growth in e-commerce volumes in fiscal 2023 as work from office resumed after two years of pandemic-led restrictions, e-commerce enablement SaaS platform Unicommerce said in its annual trends report released Wednesday.

“As offices return to regular operations, there has been a notable shift of consumers shifting back to tier I and metropolitan cities for work, resulting in tier I cities exhibiting fast growth in order volumes relative to tier II and tier III cities. Tier I regions indicated the highest year-on-year order volume growth of 31.1% during FY2023, followed by tier II and tier III cities which witnessed year-on-year order volume growth rates of 23.3% and 22.4% respectively, during the same period," Unicommerce said in its report.

However, smaller cities are exhibiting “continued e-commerce adoption" as consumers spend more time online and as local businesses in these markets tap e-commerce to grow sales, it said.

In FY23, share of tier II and tier III cities as a percentage of the overall e-commerce market stood at 18.6% and 37.1%, respectively, down marginally from 19.2% and 38.6%, respectively, in the previous fiscal. Tier I cities, on the other hand, reported an increase in market share during the same period.

Overall, the e-commerce industry recorded a 26.2% jump in order volumes in FY23 supported by a 23.5% rise in annual GMV (gross merchandise volume) compared to the previous financial year. As expected, electronic peripherals and home appliances led the growth during the year, followed by demand for eyewear and beauty and personal care products. Demand for beauty and personal care brands was led by aggressive discounting across marketplaces.

Electronic products and peripherals segment reported a 46.8% jump in year-on-year order volume growth and GMV grew by 20.6% in FY23, the report stated. “This can be attributed to the inclusion of newer brands which were seen offering economical products across the segment," it said. Meanwhile, the beauty and personal care segment grew 26.6% year-on-year in terms of volumes and 18.9% in GMV.

Omnichannel adoption rose rapidly during the year, said Unicommerce that works with brands such as Mamearth, boAt Lifestyle, Lenskart, Timex, Myntra, TCNS, among others. As a result, the number of online orders shipped-from-stores grew 44.6% year-on-year.

“The consistent growth of over 25% underscores the robust maturity of the sector. E-commerce is no longer just an additional sales channel; it has seamlessly woven itself into the fabric of modern business. Companies are harnessing digital platforms not only to sell but also to promote and engage with consumers," Kapil Makhija, CEO of Unicommerce, said.

Meanwhile, orders on marketplaces grew at a faster clip, reporting a 31.2% growth during the year compared to pure-play verticals. “As brands continued to adopt a mixed approach to serve their customers across their brand websites as well as marketplaces, FY-2023 saw consumer preference move slightly towards marketplaces which witnessed a 31.2% year-on-year order volume growth during the period," according to the report.

Source: Live Mint
Related Posts: E-COMMERCE,UNICOMMERCE,SAAS,MAMEARTH,BOAT,LENSKART,TIMEX,MYNTRA,TCNS,KAPIL MAKHIJA

Comment on Post

Leave a comment

If you have a News HTS user account, your address will be used to display your profile picture.

POPULAR News

icon
Bussiness Petrol and diesel prices In India remained stagnant on Thursday, continuing the year long price stability, that has been seen since May 21 last year, when the previous pan-India revision to fuel rates was carried out. Prices across major cities including New Delhi, Kolkata, Mumbai, Chennai did not r
icon
Bussiness Stocks to Watch: Nifty futures traded 26 points, or 0.13 per cent, higher at 19,816, signaling that Dalal Street was headed for a positive start on Monday. Here's a slew of stocks that will be in focus today for various reasons. Stocks to Watch: Nifty futures traded 26 points, or 0.13 per cent, higher at 1
icon
Bussiness OMG 2, directed by Amit Rai, received a warm welcome from the audience. The film, featuring Pankaj Tripathi, Akshay Kumar, and Yami Gautam, achieved a strong opening at the domestic box office on its first day of release. OMG 2, directed by Amit Rai, received a warm welcome from the audience. The film, f
icon
Bussiness MCX Q1 Results: Multi Commodity Exchange of India (MCX) announced its April-June quarter results for fiscal 2023-24 (Q1FY24) on July 29, reporting a decline of 52.5 per cent in consolidated net profit of ₹19.66 crore, compared to ₹41.46 crore in the corresponding period last year. The operating inc
icon
Bussiness Power trading solutions provider PTC India on Saturday posted a 5.62 per cent year-on-year rise in its consolidated net profit at ₹142.70 crore for the April-June quarter of this fiscal, mainly on the back of higher revenues. Power trading solutions provider PTC India on Saturday posted a 5.62 per ce
icon
Bussiness As the deadline for filing Income Tax Returns (ITR) is just one day away, the department stated that more than 6 crore tax returns have been filed for income earned in the 2022-23 fiscal year as of Sunday evening. A total of 27 lakh ITRs have been received by the income tax department, number which has surp
icon
Bussiness Petrol, and Diesel Prices on August 10: The price of Petrol and Diesel remained constant on Wednesday, August 10 across major cities like New Delhi, Kolkata, Mumbai, and Chennai. The petrol and diesel rates for each day, whether new or constant, are announced at 6 am on the day. These, however, vary fro
icon
Bussiness RBI MPC Meeting 2023 Live Updates: Will Guv Das Hike Repo Rate Or Leave it Unchanged? Updated 1 hour ago
icon
Bussiness LPG Cylinder Rates: Oil marketing companies have cut the price of 19 kg LPG gas cylinders across the country. There has been a reduction of Rs 100 in Delhi. At the same time, a reduction of around Rs 93 has been made in other metros. Now 19 kg cylinder will be available in Delhi for Rs 1680, which was till now a
icon
Bussiness Petrol, and Diesel Prices on July 31: The price of Petrol and Diesel remained constant on Monday, July 31 across major cities like New Delhi, Kolkata, Mumbai, and Chennai. The petrol and diesel rates for each day, whether new or constant, are announced at 6 am on the day. These, however, vary from state t
icon
Bussiness India and Britain could sign a free trade agreement (FTA) this year as both countries have reached consensus on the broad contours of the proposed deal aiming to boost economic growth and jobs, a top Indian trade ministry official said. India and Britain could sign a free trade agreement (FTA) this yea
icon
Bussiness Balrampur Chini Mills posted strong Q1 results on Saturday as their profit jumped a whopping 493% to touch ₹73.5 crore during the quarter ending June 2023. During the same quarter last fiscal, the company posted consolidated net profit of ₹12.38 crore. The revenue of the company rose 28% from ₹1,094.
icon
Bussiness The price of gold marginally dropped on Thursday, with the cost of 1 gram of 22 carat gold declining to ₹5,495 from yesterday's ₹5,505, as per the figures released by Goodreturns. Accordingly, the price of 8 grams of 22 carat gold also decreased to ₹43,960 from the previous figure of ₹44,040, marking a p
icon
Bussiness Reliance Industries Ltd, India's most valuable company, has sought shareholder's approval to give Mukesh Ambani another five-year term as chairman and managing director of the company till 2029 -- a period during which he has opted to draw nil salary.
icon
Bussiness Go First airline, which has been grounded since early May, has announced a further extension of flight cancellations till July 31, the airline announced in a tweet on Sunday. Go First airline, which has been grounded since early May, has announced a further extension of flight cancellations till Jul
icon
Bussiness In order to settle the pending contractual disputes of government and government undertakings, the finance ministry has launched the ‘Vivad se Vishwas II – (Contractual Disputes)' scheme, according to an official statement released on Wednesday. Finance Minister Nirmala Sitharam announced th
icon
Bussiness If you did not link your Permanent Aadhaar Number (PAN) to Aadhaar before June 30, your PAN is now considered inoperative. This means you'll face some problems with your financial activities and taxes. For instance, you won't be able to invest in bank fixed deposits or mutual fund schemes, file income
icon
Bussiness IT electronics refurbishing firm NewJaisa Technologies's initial public offering (IPO) will be open for subscription on Monday, i.e September 25. The company aims to raise ₹39.93 crore through its IPO. The issue will close for subscription on September 27. The company's IPO had opened for anchor investors on Friday. The fresh issue size is of 84,96,000 equity shares at face value of ₹5 each.
icon
Latest News India is currently seeing a surge in cases of acute conjunctivitis or eye flu. It is caused by various factors, such as allergies or infections, resulting in inflammation of the conjunctiva that covers the white part of the eyeball. The incessant rain, humid conditions, and waterlogging are providi
icon
Bussiness The Reserve Bank of India (RBI) has announced the launch of the Pilot Project for Public Tech Platform for Frictionless Credit by Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of the RBI. The Reserve Bank of India (RBI) has announced the launch of the Pilot Project for Public Tech Platform for Frictionless Credit by Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of the RBI.
icon
Bussiness India's foreign exchange reserves jumped $708 million to $602.161 billion for the week ended August 11, the Reserve Bank of India (RBI) said on Friday. This is the first increase in the kitty after declining for three consecutive weeks. In the previous reporting week, the overall reserves had declined $2.417 billion to $601.453 billion.
icon
Entertainment Filmmaker Anurag Kashyap recently gave a glowing review to Karan Johar's directorial comeback Rocky Aur Rani Kii Prem Kahaani. After Anurag revealed he loved, cried and watched the film twice, many users took to the comment section of his post and criticised the film. Responding to them all, Anurag c
icon
World Ukrainian President Volodymyr Zelensky arrived in the Netherlands on Sunday aiming to strengthen his country's air power, a day after a “heinous" Russian missile strike killed seven people and wounded 148 in Chernihiv. Ukrainian President Volodymyr Zelensky arrived in the Netherlands on Sunday aiming to strengthen his country's air power, a day after a “heinous" Russian missile strike killed seven people and wounded 148 in Chernihiv.
icon
Bussiness Gogoro In, a global technology leader in battery-swapping ecosystems that enable sustainable mobility solutions for cities, today announced a vehicle partnership with Swiggy, India’s leading on-demand convenience delivery platform. Gogoro In, a global technology leader in battery-swapping ecosystems that enable sustainable mobility solutions for cities, today announced a vehicle partnership with Swiggy, India’s leading on-demand convenience delivery platform.
icon
Latest News NEW DELHI: Union minister Jitendra Singh on Saturday said, BRICS (Brazil, Russia, India, China and South Africa) should continue to hold global significance for being the most populated marketplace, driven by the knowledge, creativity and innovation economy.