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Need for action to revive India's enterprise apps market

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DQI Bureau
New Update

Let us take a stark takeaway from the latest IDC numbers on India's enterprise applications market. And it is bad news for SAP, Oracle, IBM and others, who are habitual of feasting on the meaty accounts for their ERP, CRM, SCM, HRM and BI solutions. The takeaway is: the enterprise applications market has hit the near saturation spot.

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Utterances through number

Without reaching at raw conclusions, it is better to go through the numbers. IDC has predicted the Indian ERM (enterprise resource management) market to be in the region of Rs 20 billion in 2013, with a growth of 12.8% five year CAGR (2011-16). Wary of the market trends and the competitive insights, IDC has slightly downgraded its ERP forecast for "the coming periods due to the continued mindset of caution and tactical investments by the organizations." It is, however, hopeful on the CRM market which, it says, is comparatively more bullish and is expected to be around Rs 16 bn in 2013, with very similar growth trajectory as ERP for the 5 year period. It further justifies that there is an ever increasing demand for CRM applications to understand customer psychographics and improve customer service to gain a competitive edge.

Will vendors shut their shops?

When the numbers are scary, is there a reason for the application providers to linger on in the saturating market? What is the business sense? Well, the questions must be clicking through the craniums of thought-leaders in these companies. India is not a saturating market...at least not in the near future. Abundant opportunity lies for solution vendors. You would wonder where? Well, it is there in the backyard in the SMB segment which the application vendors have often overlooked. The endless world of Indian SMBs needs IT solutions and wish to compete shoulder-to-shoulder with their enterprise-grade counterparts in the global market.

According to an estimate, there are 50 million SMBs in India, out of which merely 4 million use PC and 2 million use internet. Vendors need to revisit their policy to exploit this abundant treasure of opportunity. If the application providers relook at their strategy, the move will boost their prospects and force them to stay in the scene for longer than they may have thought in the negative environment.

Indian SMBs need Indian solutions

But there is a pre-condition. Stop the talk through the traditional enterprise applications prism. It is better that the vendors understand the psyche of Indian small business owners and re-package their products through cost-effective offerings in the cloud and over the SaaS (software-as-a-service) platform. Make no mistake but they don't need Oracles and SAPs of the world. They simply need solutions that work, let them perform better and help them compete in the global scene. If an SMB in the textile manufacturing wants a solution, the solution should be able to serve needs of a small scale textile manufacturer.

IDC has well-said when it points at the growth of vertical, industry specific solutions which are more in demand in the SMB space. And it is a heartening fact to know that "vendors are trying to address the specific requirements and customize their offerings to cater to this segment by making their applications more focused and easier to use and manage."

Decoding the opportunity

SMB segment is always in hurry and, thus, wants specialized solutions with fast deployment cycle, which many of the vendors are not used to. But they need to serve their needs in their fashion. If vendors need a pill for the headache, give them a pill for the headache and not for the toothache. In essance, the latest numbers are not in contrast to what all of us think and have learnt in last couple of years. The call is just at decoding the opportunity. SMBs can and will spend on IT. It is on to vendors as to how they want to reap the opportunity.

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