In the last six months, due to the slowdown there was a perception that the Software-as-a-Service (SaaS) industry had peaked. However, it is not the case. There is a slowdown but it is only temporary and more innovation can be created with new technologies like Artificial Intelligence and Internet of Things, said Tien Tzuo, CEO of the US-based $400 million SaaS company Zuora, which has a centre in Chennai.

Chennai, with companies like Zoho and Freshworks, is known as the SaaS capital of India. “Many categories have not been created. There should be a SaaS product for dentists, carpenters and small companies can develop solutions for every sector. I don’t think we are anywhere close to saturation,” he told businessline on the sidelines of Zuora opening its new office in Chennai.

There is a slowdown but in the long-term, the subscription model economy is not going to go away. This is a better model for the consumer and companies. Every physical device like a car, an appliance, medical device or buildings are connected to the internet. For example, Whirlpool will install a machine in a house, the customer need not pay the company but operate as a service. The consumer will simply pay the company based on how often the clothes are washed, how clean the clothes are getting, he said.

Similarly, Bridgestone says it will not charge for the tyres but based on the usage and the wear and tear.

Zuora has around 1,400 employees globally with Chennai being the second largest centre after the headquarters with around 200 staff. It entered India in 2017 by acquiring the city-based Leeyo with 60 employees, and today employs around 400 across India he said.

The company has been handling SaaS for the last 15 years, and invested around $1 billion on R&D, and that number is only growing. “We have operations in Europe, US, Japan, China but it was important for us to tap in to the workforce in India,” he said.

Zuora helps clients in the finance and technology departments with a single integrated solution on a subscription model. The New York Times is Zuora’s client. If a consumer goes to the paper’s website, they have many options, including subscribing to the puzzle, news and getting a free trial for a few days. All these, including billing, are done in the background by Zuora, he said.

Zuora has over 1,000 companies, including Zoom, Caterpillar, General Motors, Schneider Electric and Siemens to nurture and monetise direct, digital customer relationships. Last year, it reported around $400 million in revenue. The Total Addressable Market globally is around $10 billion, he said.