Pandemic spurs digitisation, smaller tech firms ride wave
The pandemic has bolstered digitisation efforts by technology customers across the world, which is, in turn, spurring growth for small-sized Indian software firms.
“This is possibly the best December we have had,” said Ram Sukumar, CEO of Indium Software, on the number of new clients his company has added. Indium signed on 32 new customers between April and September, an 11% increase from a year earlier. “A significant portion of this was in Q2, post July 2020.”
It sounds counter-intuitive that at a time when the COVID-19 virus was ravaging the world, small IT firms had been clocking up new customers looking for software solutions. A handful of companies that The Hindu spoke to confirmed this trend.
Arun Natarajan, founder, Venture Intelligence — that tracks financials, equity transactions and valuations of private firms – said the lockdown following the COVID-19 oubreak had pushed clients to digitise their organisations. “The pandemic-driven acceleration of digitisation at the end-customer level is indeed helping IT adoption and such vendors, especially those that offer SaaS,” he said.
Specific categories of customers opened up their purse strings – if Indium saw gaming software, healthcare and real estate clients show interest, GoFrugal had kirana and pharmacy stores in India signing up in a hurry.
GoFrugal, which offers cloud and mobile ERP solutions to retail, restaurant and distribution businesses, almost doubled its new client count to 2,470 stores in the kirana and pharmacy vertical in the eight months to November, compared with 1,320 stores a year earlier. CEO Kumar Vembu said as customers did not want to come to shops or handle cash, store owners jumped onto the tech bandwagon.
“With the pandemic, it was not easy for kirana and pharmacy stores to keep pace with orders and stock movement. Only tech solutions could ensure end-customers received delivery of exactly what was promised.”
While sales teams had more time on hand, thanks to zero commutes, client decision makers, too, wanted to make an improvement.
GoFrugal, which crossed $5 million in 2019 revenue and plans to achieve $10 million in 2021, saw traffic to its site doubling in the first 90 days of the lockdown.
“Money to spend was never an issue for prospects. Helping store owners understand the benefit was the challenge. COVID-19 helped quicken that process for us.”
Document360, a software-as-a-service from Kovai.co that helps build a self-service knowledge base for users, raced from 2,000 users to 5,000 in about 12 months in 2020. Saravana Kumar, CEO, Kovai.co, said, “From 100 logos we went up to 400 and revenue rose 500 times.” Significantly, the company, which raked in $10 million in revenue in 2020, did not use discounts to get clients in the door.
For, it was not just small-sized companies that found way to such vendors. “Large corporations, too, came to our website, especially those looking for niche artificial intelligence or data skills we had on offer,” said Mr. Sukumar of Indium, which is targeting $30 million in revenue next financial year.
How clients found small software firms probably offers a lesson in digital marketing. Mr. Sukumar said, “No events, in-person meetings, travel or luncheons were possible during the lockdown. So, we increased spends and focus on digital marketing and inside sales teams. These helped elevate our brand during this pandemic.” He also pointed out that clients’ preference for onsite manpower resources was not negotiable earlier.
But the pandemic proved work-from-anywhere was possible. So, where resources sat, became irrelevant. The same sentiment is now getting reflected in vendors such as GoFrugal.
“Our work is moving to where there are people to execute – be it in Kochi or Tiruvannamalai. Our customers are in places as far apart as Lucknow and Pollachi,” said Mr. Vembu.
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