Indian SaaS firms get creative with pricing to grow despite economic downturn


Vidhya Sivaramakrishnan

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Vidhya Sivaramakrishnan

24 reads

With their clients laying off workers and looking to curb product spends, pricing has become the primary lever for Indian SaaS firms to continue growing in the current economic climate. SaaS leader Zoho, for instance, has adopted a complex mix of usage-based pricing and subscriptions.

July 24, 2023


Key Takeaways

  • The current macroeconomic climate has seen Indian SaaS companies struggle for growth as their clients look to curb spending
  • Many are now moving away from subscription-based pricing and experimenting with more creative approaches to keep revenue growing
  • While usage-based pricing (UBP) is one of the more popular new approaches, the likes of Zoho are adopting a hybrid model that combines subscriptions and UBP
  • Switching from subscriptions to these new models, however, requires careful planning and implementation. And even then, positive results aren’t guaranteed

The global economic downturn has weighed heavily on India’s software-as-a-service (SaaS) firms. Indeed, while a 2022 report from consulting firm Zinnov forecast that the Indian SaaS market would generate revenues of $100 billion by 2026, the same report a year later revised this figure to just over a quarter of that—$26 billion.

It’s no secret why. Even though companies have woken up to the benefits of employing SaaS tools, the current climate necessitates frugality. Layoffs across industries have also meant that even those employing SaaS products are doing so at a smaller scale.

As director of finance at virtual events SaaS platform Airmeet, Naga Subramanya has a leg in both camps. On one hand, he keeps an eagle eye on his company’s SaaS spends, while on the other he’s responsible for Airmeet’s revenue generation.

“The number of tools in your arsenal reduces drastically in a downturn. When people are getting laid off, the people who were championing your SaaS product may no longer be in the organisation,” says Subramanya. In such a situation, he says, the only tool left for a company to leverage is pricing.

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