In what is as a responsive move to the constantly evolving demands of CIOs, Indian product start-ups are serving up a range of solutions across technologies, according to a study mapping enterprise IT demands to start-up solutions. The report finds them eager to tap into the huge potential and disrupt the way organisations adopt and consume technology. The study covered over a 100 CIOs and top IT decision makers (ITDMs) across enterprises as well as nearly 300 start-ups.
Over 50% of the ITDMs belonged to organisations with over Rs 1000 crores in annual revenues. More than three-quarters of respondents were senior decision makers (CIOs) within their organisations, with 31% in charge of the global technology mandate of their respective companies. Over a quarter of the respondents (27%) have a IT budget of over Rs 10 crore for the year, while 48% work with over Rs 5 crore. As much as 67% of the respondents have an IT budget of at least Rs 2 crore. The start-up respondent group comprised of more than 300 technology product start-ups from India who are at the early stage of evolution in the enterprise start-up system. A majority of them (82%) have developed and deployed enterprise application solutions, as opposed to infrastructure and app development. 49% of respondents are 2-4 years old, and 27% are between 1-2 years old. 15% of respondents were older than 4 years.
Mobility, security and analytics come under the radar of CIOs: Technologies that are constantly under the radar of IT decision makers (IT DMs) are topped by mobility solutions and mobile apps, while security, analytics and collaboration solutions are also drawing great interest within this group. An emerging, but potentially strong contender for attention is the BYOD (Bring Your Own Device) syndrome, as a majority of respondents (73%) affirmed that it is likely to play a key role in their organisations. Cloud solutions are also being closely watched, irrespective of whether they are private or hybrid solutions, as well as enterprise-wide services being delivered from public clouds. Use of personal cloud by employees, though a smallish trend, is also under the overall ‘cloud solution’ tracking of these organisations.
Indian product start-ups geared to disrupt IT adoption: As many as 82% of the respondents have already developed and deployed application solutions. Business analytics and big data solutions are being offered by 46% of start-ups that responded to this study, enterprise services on the cloud by 30% and mobility solutions are served up by 21%. Key functions targeted by these solutions include sales (73%), business development (70%), service delivery (66%), HR (51%) and the supply chain (48%).
Younger technologies expected to drive agility and flexibility of organisations: A whopping majority of the IT decision makers (95%) believe that solutions arising from new technologies could not only improve business processes and customer services, but increase the agility and flexibility of the organisation itself. Some of the concerns plaguing IT DMs, and are driving them to seek new solutions, include the increasing demand to invest in new technologies by business users (80%), upgradation of their aged IT systems (74%) and increasing security risks with information management (71%). The study reflects that it is a bucketful of new-age technologies, less than a decade old, that are expected to address these concerns. Mobility solutions top the list (91%), followed by solutions in collaboration (82%), security (81%), mobile apps (80%) and big data / business analytics (71%). Surprisingly, cost is not a major factor that is driving the adoption of these new technologies as less than half the respondents (43%) strongly believed that it had impact.
CIOs and top IT decision-makers keen to look at start-ups: Perceptions about solutions from start-ups is encouraging as 90% of IT DMs said that they are likely to see a demo, implement on a trial basis or conduct a review. As much as 72% of respondents are likely to invest in a limited implementation of the solution, while 54% are willing to invest in a full implementation of the solution.
India emerging as the hotbed to test technologies for developed and emerging markets: Entrepreneurs agree that there are elements of ‘India advantage’ in the ecosystem, especially with relation to cost of product development, implementation and support. The ease of pilot testing and availability of technical skills contribute to enhancing the global product offering. However, availability of funding and infrastructure pose serious challenges to sustenance, as entrepreneurs have cited these two factors as low advantages.
Technology buyers keen to fuel start-up ecosystem: In a bid to fuel the technology product surge in India, IT DMs are demonstrating a new-fangled willingness to help start-ups, beyond mere purchase. 85% of respondents stated that they are willing to work (and play an advisory role) with the start-up to help evolve or improve the product. A majority of respondents (82%) are keen to provide customer references while 68% agree that being one among the first five customers for a start-up is acceptable.
Start-ups and IT decision makers are not completely aligned with factors contributing to the purchase decision: While both groups (of start-ups and the IT decision makers) agree on a few factors as being key to the purchase decision including performance and reliability of the solution, vendor support, scalability and costs, they are still non-aligned on several other factors. Consider this: while IT DMs placed great emphasis on the features and functionality of the solution (78%), only 36% of start-ups ranked this as a very important factor. Moreover, as much as 65% of IT DMs believed that technical specifications of the solution was key to purchase, but only 15% of start-ups believed so.
Hierarchy, access and appetite for risk are chief bottlenecks for start-ups: As many as 70% of entrepreneurs cited hierarchy in decision-making as the most important hurdle in selling to enterprises, while access to the right people (54% cited this) and the risk appetite of CIOs for start-up solutions (51% cited this) came up as challenges too. Other pain points included mindset of the business user, lack of sufficient customer references and the opportunity cost of a demo.
Chief concerns when buying from a start-up: IT decision makers primarily worry about the reliability of the solution (78% cited this as a high risk) as well as the long-term quality of support from a start-up vendor (72%). Scalability of the solution and its performance are also aspects which IT buyers believe that start-ups must fine-tune in order to seal the deal.
Commenting on the report findings, Alok Goyal, Partner, Helion, said, “This is a great time to be a technology product start-up from India, given the maturing ecosystem, and a plethora of exciting global opportunities both in the highly mature markets as well as emerging ones. Entrepreneurs must look at a diverse set of influencers, including the buyer group, who will help strengthen their product offering if they want to completely harness this opportunity. It helps to have an ear to the ground, and align with the expectations of the buyer group, especially those concerning performance, scalability and vendor support.”
