AWS Decreases Its Price 129 Times Since Inception: Amitabh Nagpal
With the decreasing price of cloud services, SaaS startups were the most benefitted among all. Nagpal said that in 2022, Amazon has provided almost USD 1 billion in credits through the AWS Activate program to support startups' growth and scalability
SaaS is one of the sweet spots and favourite of VCs and incubators in India specifically. There is no doubt that the sector as a whole is growing in India. However, it has witnessed a slowdown along with other sectors. There is around an 81 per cent drop to USD 635 million in the first half of 2023 (Venture Intelligence report). So, what are the underlying factors to this slowdown?
According to the SaaSBoomi and McKinsey report, In 2022, the capital investment in SaaS in India increased by 24 per cent, reaching USD 8.4 billion. This demonstrates the potential of India in the SaaS industry. India is currently in a favorable position, with successful SaaS companies and a talented pool of product engineers and managers.
This has attracted venture capital interest and investments. As a result, we can expect the creation of more unicorns in India's SaaS sector. In 2022, India accounted for around 6.7 per cent of the global unicorns created, many of which were in the SaaS field.
As far as unicorns are concerned, last year there were around six SaaS startups that made it into the unicorn club, but there is not even a single startup that could make it into the club this year. What do you think of this?
Unicorn creation happens over a period of time. It is difficult to look at it over a single year timeframe. If you go ten years back, there were lesser number of unicorns. I think success and growth should be looked at over a period of time, such as three years, five years and ten years. You will see the same evolution happening. Particularly with the confidence that we have seen with the capital growth happening in the early stage startup ecosystem in India over the last few years.
We have also observed that SaaS startups particularly do a lot of cash burn during their initial stages. What are you doing to help startups cut costs?
We understand that early-stage SaaS startups often have limited resources. Many of these startups begin their journey on the AWS Activate program and receive AWS credits. With the cloud and these credits, they can experiment, innovate and build their proof of concepts in a cost-effective way. In the past year, Amazon has provided almost USD 1 billion in credits through the AWS Activate program to support startups' growth and scalability. At AWS, our team members are dedicated to helping startup customers reduce their cloud expenses. This may seem unusual, but it reflects our customer-centric culture. Since our beginning, we have decreased our prices 129 times.
Could you please provide us with some information about the startup-focused programs that AWS is currently running?
We have different programs to help startups at different stages of their journey. These programs provide startups with the knowledge and connections they need to grow and succeed. We offer AWS credits to early-stage startups through our AWS Activate program.
The credits help startups create their product market fit and raise capital. We also have other business programs like SaaS Central, an accelerator program created in collaboration with Prime Venture Partners. SaaS Central provides mentorship and networking opportunities for selected startups. We have a program called US SaaS Delegation where we connect startups with experienced SaaS founders in the US market. We also provide technical assistance through programs like SaaS Factory and SaaS Competency Center. These programs help SaaS founders with their architecture.
When we examine the SaaS ecosystem in India, we notice certain parallels with the Information Technology (IT) boom that India experienced from the early 1990s to the early 2000s. So, what are some of the similarities and distinctions between the initial phases of these two sectors?
I have been associated with both types of entrepreneurship: as a services entrepreneur in the late 2000s, and later as a SaaS entrepreneur. The story is connected. In the past, India was focused on providing services, so many US software companies started setting up development centers in India.
Indian engineers had the opportunity to work in these offshore centers and learn how to build products. This led to the emergence of a group of founders who created product-centric SaaS companies. Now, India is considered the SaaS factory of the world, attracting a lot of investment in the SaaS ecosystem. This growth is expected to continue. At AWS, we will continue to support SaaS startups.
Coming to talent, India is one of the five largest countries having highly skilled AI and ML workforce. According to a report from Nasscom, after the US, India produces around 16 per cent of the world's AI talent. So how is India going to push the SaaS ecosystem in the coming years?
India has one of the largest AI talent pools globally. With an increasing focus on AI, the demand for AI/ML skillsets has increased across sectors. As per the report “Asia Pacific Digital Skills Study: The Economic Benefits of a Tech-Savvy Workforce,” commissioned by AWS and conducted by Gallup, 92 per cent employers in India say technologies like AI, edge and quantum computing, blockchain and cryptocurrency is likely to become a standard part of their future business operations.
At AWS, we have various programs that are aimed at upskilling people across the board with various cloud skills. We have trained over four million people in India with cloud skills since 2017.
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