B2B Payments

India’s B2B Graveyard

The good news for Indian tech start-ups that they are leveraging the cloud to offer services that range from ERP and CRM solutions to data storage to developer platforms. Even better news, the world – particularly the parts inhabited by venture capitalists – are starting to take notice and pour investment dollars into the subcontinent. Yet, for all their success in attracting international investment and client bases, Indian B2B service providers are conspicuously unable to form partnerships on the home front. Are large Indian companies too unlikely take the relatively small risks associated with new product adoptions to partner with homegrown start-up developing those next generation products? Can those start-up overcome that hesitation?

In some ways it has been a very good year for Indian tech start-ups looking to build back-end services for business and enterprise levels users.  These tech outlets are building ERP and CRM solutions, data storage mechanism and developer platforms—and the world is starting to take notice. Though India does not receive the scale of venture capital investment one might expect given the size of its IT market , B2B service companies are increasingly drawing investment, reports  ZD Net .

Unfortunately, enthusiasm on the world stage is not helping Indian tech entrepreneurs win the war at home, as Indian companies are more wary than average about making small technical changes.

Druva  has over 2,500 enterprise customers worldwide,  including space research NASA.

“It’s a hard sell, even for Druva,” said cofounder Milind Borate, 42, an ex-Veritas employee, reports The Financial Times. “For startups this is bad, because they don’t get face time with the customers. They have to travel all the way overseas to understand that. For companies, it’s a loss as they don’t get to use cutting-edge products.”

Druva figured out within a year of its inception six years ago that Indian companies were not interested in their products and quickly began looking abroad for opportunity. Today, about 60 percent of its sales come from United States.  To accommodate this, the company has moved its headquarter to Silicon Valley, where it has raised multiple rounds of venture capital and seen revenues cross the $15 million mark, reports Sramana Mitra’s blog

Borate went on to note to FT that while he is sure that Indian companies have no shortage of problems that the nation’s many tech start-ups could help them address, the market for those solutions remains weak. Druva, with a strong international base to keep it profitable is valued at about $120 million.

Smaller ventures, like Abinash Saikia’s  cloud management software maker Enclouden barely managed to stay afloat by selling to a couple of small enterprises.

Bangalore-based 1Click started off with a focus on their home nation, but found it to be unsustainable. With the help an online marketing professional, the company proceeded to change its focus to American and European markets.

“I would have loved for it to be an India-focused product. But there are no early adopters. What can we do?””said Hrishikesh Kulkarni, founder and CEO of 1Click,  told the Financial Times.

The “graveyard” of adoption is written off largely to a highly conservative business culture in India, that is hesitant to change its habits, even if those changes led to greater levels of efficiency or productivity for firms.

“Big firms tend to be bureaucratic, focused on process delivery than innovation. The financial gains of engaging with startups are rarely commensurate for them,” said Saurabh Mukherjea, CEO, Institutional Equities, Ambit Capita

Though adoption has been slow among companies in India, there are some signs of life in the graveyard.  India-based software services exporter Wipro will be partnering with almost a dozen startups in areas such as payment processes, big data analytics and visualisation , information security, text analytics, storage.  This continues a tradition, the company has worked with 100 startups over the past two years.

“If the startup does come up with a really innovative product, then we are equally keen to take it to market quickly,” said K R Sanjiv , CTO, Wipro, told FT. “Not all startups may match these requirements.”

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