Skip to main content
By

Selling software as a service



"In the past few weeks I have had a number of conversations with my friends in the venture capital community that have convinced me that consumers really want to purchase software as a service and not a shrink-wrapped CD offering."

So says US Venture Capital executive Charles Hudson in his web log

He goes on to add:

"I am fairly convinced that consumers do not want to manage complex applications or worry about the impact that a new application will have on his/her desktop computing environment. In a world where big businesses seem to have had their fill of enterprise software, enterprising entrepreneurs might want to take a hard look at services that customers would be willing to pay money to use."

Andrew Anker of August Capital adds in response:

"The services or ASP model is unfairly maligned because of a number of unsuccessful attempts at it during the late 90's. Those failures had more to do with the product than the model. I think the most important point Charles makes is that we don't even tend to realize that many of the services we use today (PayPal, Yahoo) are really just hosted software."

While these VCs are obviously talking about the US context, I believe that "selling software as a service" is something that is highly relevant--if not more relevant--in India.

Companies attempting to sell shrink-wrapped software in Indian constantly crib about how the Indian market is "very price sensitive". Add to that the problem of rampant piracy. Toss in the fact that the availability of affordable "always on" connectivity (through DSL/Cable) is increasing by the month. And my conclusion is that "pay per use" is going to end up as the best model to sell software in this country.

In selling the Internet to small and medium businesses, companies like ccavenue.com (payment gateway services), Net4India (ISP and hosting services) have already shown that the winning formula in India is to go for volumes with a "sweet spot" pricing. I believe it is a matter of time that this happens in software as well. What is missing so far are the "killer apps"--which address India-specific problems.

Popular posts from this blog

Startup Funding: The Luck Factor – By Sanjay Anandaram

By
We hear all the time about the amount of money that's available to fund startups. For example, that private equity funds invested over $ 3.3 billion in just the first 3 calendar months of the current year. That VCs are always looking out for good deals as most of the plans they see merit little or no attention. That they invest in about 5-10 a year out of the 500-1000 business plans they get. And so on…But the truth is that a majority of deals that get funded are those that come through a referral or because the VC knows (of) the entrepreneurs; its natural because VCs don’t have the time to look at all the plans that they get to pick out the Rediff, Naukri, or Tejas Networks. Deals that come through some trusted source or through a trusted filtering process are therefore valued higher and rise to the top of the pile of business plans. It is therefore easy to see how many plans don’t get funded. And also how competitive the race to secure funding really is. Given this situation, wh
Read more

How I Raised Funding - Priyanka Agarwal, Wishberry

By
You have to be confident and shameless while crowdfunding. Priyanka Agarwal, Wishberry shares on how to succeed in crowd funding with Venture Intelligence in this  interview. Priyanka also candidly shares how the team built Wishberry, raised funding from top angel investors like Rajan Anandan, on pivoting, and difficulties in raising capital for entrepreneurs operating in niche spaces not chased by VCs. Q: What does Wishberry do? Priyanka Agarwal : In its latest avatar, Wishberry has pivoted into crowd financing of low budget films (INR 1-5 Cr). We are essentially trying to create an internet platform for investment opportunities for HNIs in films including Marathi, Tamil, Kannada, or films targeting the global diaspora. L-R: Co-founders Anshulika Dubey & Priyanka Agarwal, Wishberry Given that you are building a marketplace, how did Wishberry solve the Chicken and Egg problem? Beyond the “all or nothing” model what did Wishberry do to pull in more artistes and inves
Read more

Profile of Career Forum founder

By
The Starship Enterprise column in The Economic Times (not available online), featured Sujata Khanna of entrance exam training institute, Career Forum. The company, which started with just seven students in Pune, now covers over 39 cities reaching over 15,000 students. ...The most important milestone I think was in 1995 when we decided to incorporate Career Forum into a Company. This brought in a lot of professionalism and we also went for expansion. ...Strong technical network is our unique selling proposition. We have a strong ERP system running across all centres in all areas of business from distribution to logistics... Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. View sample issues of Venture Intelligence India newsletters and reports.
Read more