I am from Mumbai, India.

Software as a service (SaaS) and cloud computing are the buzz words in the information technology market today. Everyone is talking about the pros of cloud and SaaS offering and how it makes life easy for the customer. SaaS offering brings down the upfront investment to 10-25% of what a company would need in a traditional one time buy.

I believe the larger corporates would anyways prefer to maintain their own IT infrastructure due to data security and privacy issues and anyways they would have already invested in developing the IT team and the infrastructure. Where the SaaS would make an impact is the Mid and Small companies for whom investing upfront in an ERP software was not affordable.

SaaS ERPs are costing anywhere from free for few users to USD250/user/month. It will depend on how innovative and disruptive the SaaS provider is. India, China,Thailand, USA and other markets which has a lot of SMEs will be where the growth and innovation in SaaS offering will come from.

I am from India and recently have seen a number of startups coming up with SaaS CRMs and ERPs. iwebnotes.com is offering SaaS ERPs at USD 7/user/month. Then there is Zoho is offering CRM software at USD 13 a user/month and then SAP B1 and Ramco in the higher price range. Also the software on the look seems to be very good and different from traditional ERPs. It has an instant online setup and a 30 day trial.

The point is will such offerings make the SMEs adopt ERP software. I believe the major reason why SMEs have not been able to grow, especially in India, is the lack of awareness of how technology can help them scale and become leaner. They have always seen ERP software as an expense than an investment. I believe the SaaS offerings will break the initial entry barrier to adopt ERPs.

Lets see how it turns out.

Cheers!