About Author: Aditya Ghosh is a Product & Marketplace Growth leader at Techjockey, with prior experience at Urban Company and FabHotels. He has delivered lectures at MDI Gurgaon, IIMs, IIT Delhi, Altera Institute, Delhi University and more. To know more visit www.adityaghosh.com
Why India’s SaaS Adoption Is Still Broken
India is often positioned as the next global SaaS powerhouse.
With over 63 million MSMEs, the country represents one of the largest untapped markets for software adoption. Yet, despite this scale, digital adoption remains uneven and inconsistent across segments.
At the same time, the Indian SaaS market is projected to grow to nearly $100 billion by 2035, according to IBEF.
This creates a clear contradiction:
The supply of SaaS is accelerating rapidly – but real adoption on the ground is still fragmented.
Adoption is Surface-Level (The Maturity Gap)
Data from NASSCOM paints a deceptive picture of progress. While over 60% of Indian SMBs have technically adopted cloud solutions, nearly half remain in the tentative, early stages of usage. There is a massive chasm between a founder “buying” a tool and a workforce “inhabiting” it.
Currently, the market is defined by Surface-level adoption. In many cases, software is purchased by a business owner who sees the vision, but it is handed down to a staff that lacks the digital fluency to integrate it into their grueling 10-hour workdays. When a tool isn’t woven into the daily workflow, it doesn’t solve problems, it creates administrative overhead
The Discovery Problem
India does not suffer from lack of software options. If anything, the problem is the opposite.
An SMB searching for a CRM, HRMS, or accounting solution is often faced with dozens of alternatives – each claiming similar benefits.
Without structured comparison systems or clear guidance, decision-making becomes difficult. According to insights from McKinsey & Company, Indian SMBs often struggle with navigating fragmented digital ecosystems, which slows down technology adoption.
More choice without clarity leads to delayed or poor decisions.
Trust Is Still Built Offline
Unlike standardized e-commerce experiences offered by platforms like Amazon, SaaS buying in India is still heavily dependent on trust and human interaction.
Reports covered by Economic Times highlight that SMBs continue to rely on: Sales conversations, Referrals, Assisted demos
This results in longer buying cycles and higher drop-offs.
India is not yet a fully self-serve SaaS market. It is still an assisted decision-making ecosystem.
Onboarding Is Where Adoption Breaks
One of the most overlooked challenges in SaaS adoption is what happens after the purchase.
Many tools are designed for digitally mature users, while a large portion of India’s SMBs are still early in their digital journey.
Research from KPMG indicates that usability and onboarding complexity remain key barriers to technology adoption among small businesses.
The result: Tools are underutilized, Teams struggle to get started and Value realization is delayed
Adoption does not fail at buying. It fails at onboarding.
The Pricing and ROI Gap
The “flexible” pricing models that the West loves variable costs, usage-based billing, and complex add-on tiers:- are often perceived as a threat by Indian SMBs. For a business operating on thin margins, a variable cost is not “flexibility”; it is an unpredictable risk
They demand cost predictability and a straight line to ROI. When pricing tiers become too complex to explain in a five-minute conversation, trust erodes and the sales cycle stretches indefinitely.
Innovation vs Readiness Gap
Another emerging disconnect is between what SaaS companies are building and what SMBs are ready to use.
Coverage by Economic Times suggests that a large percentage of SaaS companies are rapidly integrating advanced capabilities like AI.
However, a significant portion of SMBs is still navigating basic digitization. This creates a widening gap between Product innovation and User readiness
The Real Opportunity
India’s SaaS adoption problem is not about products. it’s about everything around them. From broken discovery and low trust to unclear decision-making and poor onboarding, the real gaps lie in the buying and adoption journey. The next wave of growth won’t be driven by more features, but by simplifying how businesses discover, evaluate and start using software. This means building guided decision frameworks, seamless onboarding and context-aware experiences.
Because in the end, adoption is not driven by how powerful a product is. It’s driven by how easily it can be understood, trusted and used.
Conclusion: The Path Forward
The next decade of Indian SaaS won’t be defined by who has the most powerful AI, but by who has the most invisible friction. To unlock the $100 billion potential, we must stop building for the power of the platform and start building for the readiness of the person using it. We need simplified buying journeys, guided decision frameworks, and onboarding experiences that feel like a helping hand rather than a technical manual.
Are you building for the sophistication of the technology, or the reality of the user who has to live with it every day?
