Indian startups are increasingly seeing enhanced benefits by adopting a strong digital core on cloud.
Enterprise tech on the cloud is the future enabler, and startups will continue to prioritize enterprise technology as a critical aspect of their investment to navigate the next phase of growth and development, says a report by SAP India, in collaboration with Zinnov Digital. The report has found that the best-run startups run on a modern digital core. Technology remains centre stage, influencing how startups grow sustainably.
The numbers say that about 74% of Indian startups reported direct benefits from implementing enterprise applications. 24% believe that achieving maturity in their business model, driven by robust technological capabilities and scalable operations, plays a crucial role in attracting investors. About 68% of respondents reported a strong growth in revenue, after adopting enterprise technology solutions, leading to an increase in their valuations.
37% of the startups plan to increase their spending on enterprise applications by more than 15% in 2023. Whereas 81% cited automation and standardization of processes across divisions with faster customizations as the primary benefit being derived by hosting enterprise applications on the cloud.
Adoption across the public cloud is set to grow by 2X whereas the private cloud promises about a 50% increase in adoption indicating a high focus for startups to shift their workloads to the cloud.
As we enter 2023, we remain optimistic that investment in the right technology and organizational augmentation can help startups navigate the economic slowdown caused by the recession and other macroeconomic factorsSidhant Rastogi, Managing Partner at Zinnov Management Consulting
Remarkably, over 80% of startups in the enterprisetech, healthtech, retail, and logistics and autotech sectors have reported a substantial increase in revenue, underlining the significant positive impact of enterprise applications on startup performance and success.
The study of 115 startups also suggests that startups will continue to invest in enterprise technology platforms, driven by their proven ability to deliver business outcomes and ROI. Some of the key benefits of enterprise applications include top-line acceleration and control on the bottom-line, quick revenue recognition and handling complex billing based on contracts and consumption for differentiated service lines.
Mission-critical Enterprise Resource Planning (ERP) systems on cloud are powerful enablers that provide valuable insights and direction to navigate any challenges, and accomplish their goals, including attracting investors, fair valuations and retaining a competitive edgeSanket Deodhar, Vice President- Digital Natives and Startups, SAP India
Sanket Deodhar, Vice President- Digital Natives and Startups, SAP India said, “Indian startups today require adequate tech infrastructure to help them diversifying business, scaling up operations and acquisition and retention of the right talent. Mission-critical Enterprise Resource Planning (ERP) systems on cloud are powerful enablers that provide valuable insights and direction to navigate any challenges, and accomplish their goals, including attracting investors, fair valuations and retaining a competitive edge.”
Addressing challenges, Indian startups stay resilient
Despite the funding winter and dynamic market conditions, Indian startups continue to grow and there is no sign of investments slowing down for high-performing startups in the coming years. More than 75% of startups point towards metrics such as revenue generated in the past year, product and service margins, and market share based on traction, for determining valuations.
81% of startups reported customer sentiment as one of their biggest business concerns, indicating the importance of customer acquisition, experience, and servicing metrics. 70% of respondents noted that partner evaluation and lack of in-house knowledge to manage remain the top challenges for startups while implementing enterprise application solutions.
Sidhant Rastogi, Managing Partner at Zinnov Management Consulting, said, “In 2022, Indian startups faced significant challenges due to market headwinds and reduced valuations. As we enter 2023, we remain optimistic that investment in the right technology and organizational augmentation can help startups navigate the economic slowdown caused by the recession and other macroeconomic factors. By doing so, they can ramp up valuations and revenue and achieve sustained growth.”