Gariba is not alone, and has joined scores of other Indian CIOs, who have opted for Salesforce.com’s on-demand CRM software. In a recessionary period, Salesforce.com’s subscription-based model is making tremendous sense for Indian CIOs, as they look at reducing IT-related costs, without sacrificing the edge that can be gained by using technology.

“Rapid time-to-value is the priceless advantage of SaaS. Rather than wasting time in the definition, acquisition, and configuration of commodity technology, an organization that adopts a SaaS portfolio can immediately begin its attack on the business problem or its pursuit of the business opportunity—while the strategic moment is still at hand,” comments Doug Farber, Vice President Operations, Asia Pacific, Salesforce.com.

As the software requires no installation, there are no associated costs of hardware, network, and maintenance. Elbee’s Gariba says that the fact that he does not have to worry about buying servers, software and paying maintenance fees, has not only helped him save costs, but also simplified life for his team. “Every year, the cost per user incurred due to hardware and associated software and maintenance keeps on increasing. Today, I have no such headaches,” says Gariba, explaining the rationale of adopting a SaaS model.

The Salesforce.com model allows Elbee Express to use a pay-per-user model, with the added benefits of scaling up quickly, without significant cost overheads. If Elbee Express had taken the traditional way of software, installing, and customizing software, it would have taken approximately six to eight months to implement the software. Comparatively, Salesforce.com has helped Elbee Express gain the benefits of using CRM software within a period of just two weeks. CIOs like Gariba believe that this is the future model of software and compare this model to a mall which allows users to try a product and buy it only if it suits their requirements.

Salesforce.com, which started operations in India during September 2005, is now the most successful SaaS vendor in India, with several big names among its list of clients. The client list includes Sify Technologies, Polaris Software Labs, Lodha Group, eBay India, Bharti AXA General Insurance, Servion, Maytas Properties, HCL, Sasken Communication Technologies, Ocimum Biosolutions, and state owned National Research Development Corporation (NRDC).

Bend IT Like Salesforce
The success of Salesforce.com is a rare success in a market, where other players have struggled with their SaaS-based offerings. While a host of industry voices still advocate a wait-and-watch model, Salesforce.com’s adoption has forced many vendors and customers to relook at their strategies. Says Farber, “One thing that is undeniably clear is that the age of experimentation is over—we are in a time of widespread adoption of cloud computing globally that is just taking hold in India. CIOs are hungry for the flexibility and efficiency that they can achieve with SaaS.” The flexibility comes from the fact that there is no client server software installation or maintenance and the software takes a shorter time to be used.

With SaaS, customers pay as they use, and IT cost is always directly aligned with IT value. There are no huge up-front costs in hardware or software and no hidden costs or armies of consultants required to get started. Since the vendor owns the ongoing maintenance of the infrastructure, there are no major operational costs either. SaaS-based offerings are a boon for CIOs, as front-loaded investments in commodity infrastructure and software licenses are replaced by pay-per-use fees that represent a variable cost, instead of being a constant drain of depreciation charges and debt service costs. Further, the multi-tenant model of cloud computing, which is used by Salesforce.com, allows each customer to manage and share information residing in a single database via the web. This means there is no problem of integrating data across multiple departments.

For example, before it implemented Salesforce.com’s CRM solution, real estate major, Maytas Properties, was using spreadsheets to manage customer activity. Different spreadsheets were being used by different sales representatives to upload customer activity. Since the spreadsheets were not integrated, customer information was not accurate and could not be shared across the board, resulting in a delay in responding to customer needs. Today, the on-demand solution from Salesforce has helped the firm to ease workflow and track information from a single console.

Farber compares this model to a utility and says that when a company moves into a new building they do not dig their own well for water or build their own power station—they tap into the already available infrastructure. “The same is true with Salesforce.com. It also allows our subscribers to leverage economies of scale and the collective resources of the community, where they can gain access to features and enhancements that they may not otherwise be able to afford on their own.”