- Tamil Nadu is one of the first States in India to formulate policies for the IT & ITeS sector. The industry has opened up tremendous opportunities for the promotion of software exports and services in the State. A strong industrial base and infrastructure, world class connectivity, abundant supply of power, world class health care, top grade educational institutions and outstanding human resources have made Tamil Nadu a highly favoured destination in IT-related activities.
- The State offers state-of-the-art telecommunication infrastructure for high-speed large volume data transfer. Tamil Nadu has an excellent Optical Fibre Cable (OFC) network and availability of reliable large bandwidth. With three submarine landing cables, Tamil Nadu has one of the largest bandwidths among Indian States. The total bandwidth available is about 14.8 Tbps, connecting Tamil Nadu with international locations.
- There are 42 operational SEZs, out of which 18 SEZs are IT/ITeS sector-specific. A total of 246 IT Parks are in different stages (operational to construction) with a built up space of 146 million sq. feet in Tamil Nadu. On the other hand, SEZs particularly provide companies with many incentives, which, in turn, promote FDI and technology. Tamil Nadu houses multiple IT & ITeS-specific SEZs.
- Chennai has been referred to as the ‘SaaS Capital of India’, with Coimbatore being the second place of choice for SaaS Startups coming to Tamil Nadu.
- Tamil Nadu Startups have become synonymous with software-as-a-service (SaaS) innovation, thanks to the rise of Startups such as Zoho, Freshworks, Orangescape, Chargebee and many others.
- Software Technology Parks of India (STPI) has established its parks in Chennai, Tiruchi, Madurai, Tirunelveli and Coimbatore.
- Tamil Nadu offers the largest pool of technically qualified professionals in the country. The annual intake of 573 engineering colleges at undergraduate level is 2.6 lakh, out of which around 37% (90,000 students) specialise in IT, Computer Science, Electronics & Telecommunication. Post-graduate courses like Master of Computer Applications are specially designed to prepare a qualified workforce.
IT/ITeS & SaaS
Advantage Tamil Nadu
Introduction
Information Technology/Information Technology-enabled Services [IT & ITeS] and Software as a Service [SaaS] is a cloud computing model where software applications are hosted and delivered over the Internet on a subscription basis. SaaS has gained popularity worldwide and more in Tamil Nadu, which is known for its thriving IT industry. Tamil Nadu has several SaaS companies, Startups and IT hubs that offer various SaaS solutions to businesses and organisations.
The Tamil Nadu SaaS ecosystem is growing aggressively. A recent Motilal Oswal report says that the Indian SaaS ecosystem is projected to increase its global share by 4-5%, translating to a $50-70 billion revenue opportunity by 2030.
Indian SaaS Startups are maturing at a rapid pace, attracting increased interest at all phases of the investment process. They help to increase capital efficiency, create talent pools and improve growth prospects for both employees and employers, making them highly transformative in driving value development.
By extension, the SaaS sector can play a huge role in helping the State Government achieve its ambition of becoming a $1 trillion economy.
Initiatives
Union Government
In the past few years, the Indian SaaS ecosystem has witnessed a lot of growth as more than 35 Indian SaaS enterprises had $20 million or more in annual recurring revenue (ARR) in 2021 and investments in the space increased by 170% over 2020, reaching $4.5 billion in 2021.
- India’s technology industry revenue is estimated to be $245 Bn in FY 2023. Technology exports, at $194 Bn, are expected to grow at 9.4% in reported currency terms. In terms of FDI equity inflow, the computer software and hardware sectors attracted the highest FDI in FY 2021-22.
- Between April 2000 and December 2022, it attracted FDI equity inflow of $93.58 Bn. India secured 1st rank in ‘AI talent concentration’. Also, it was ranlked 5th in ‘FTTH/Building Internet subscriptions’ and ‘AI scientific publications’
- India is one of the most preferred destinations for setting up Global Capability Centres (GCCs) and it has over 1570 GCCs. The total installed GCC talent is 1.38 Mn+. Over 45 new data centres are expected to come up by 2025. Data centres have attracted investment of $10 Bn since 2020. There are 162.52 Mn registered users on the DigiLocker in India.
- Indian SaaS companies saw 2x growth in share of global markets. The country has as many as 59 SaaS unicorns and potential unicorns. Internet connections rose to 83.69 crore in 2022 from 25.15 crore in 2014.
- The presence of optical fibre cable networks has increased from less than 100 panchayats in 2014 to 1.7 lakh panchayats in 2022. As per NASSCOM, the total amount of IT export is estimated to be $194 Bn in FY 2023.
- Till date, 63 STPI centres have been set up across the country. Additionally, the government has approved 22 new STPI centres.
- The Union Government has announced GENESIS (Gen-Next Support for Innovative Startups) to discover, support, grow and make successful Startups in small cities with emphasis on collaborative engagement among Startups, government and corporates for promoting digitisation, based on the principles of inclusivity, accessibility, affordability, leading to growth in employment and economic outputs.
Policies of Union Government
- Special Economic Zones (SEZs)
- National Strategy on Blockchain
- National Cyber Security Policy
- National Policy on Software Products
- National Policy on Information Technology
- National e-Governance Plan [NeGP]
- Software Technology Parks (STP Scheme)
State Government
Tamil Nadu has a thriving SaaS ecosystem with a robust infrastructure, a skilled workforce and government support. The SaaS industry in the State continues to grow and contribute to the broader Indian and global IT landscape.
- IT Parks and SEZs: Tamil Nadu has several IT parks and Special Economic Zones (SEZs) in cities like Chennai, Coimbatore and Madurai, which provide infrastructure and facilities for IT and SaaS companies. Some notable ones include Tidel Park and MEPZ SEZ.
- TIDEL Park (Chennai): This is one of the largest IT parks in Tamil Nadu, particularly in Chennai. It offers office space for IT companies, including those in the SaaS sector, and facilitates networking and collaboration.
- IT Industry Associations: Organisations like the National Association of Software and Service Companies (NASSCOM) and the Computer Society of India (CSI) have a significant presence in Tamil Nadu. They provide support, advocacy and networking opportunities for IT and SaaS professionals.
State Government Policies
- Tamil Nadu Data Centre Policy 2021
- Tamil Nadu Industrial Policy 2021
- Tamil Nadu IT Policy 2018
- Tamil Nadu & Startup Innovation Policy
Resources
Tamil Nadu is a prominent hub for the IT and SaaS (Software as a Service) industries in India. Here are various resources available for IT and SaaS companies and professionals in Tamil Nadu:
- Startup Incubators and Accelerators: Many incubators and accelerators, such as the Indian Institute of Technology Madras (IITM) Incubation Cell and Nasscom 10,000 Startups, focus on nurturing early-stage IT and SaaS Startups. They provide mentorship, resources and access to a network of experts.
- Educational Institutions: Tamil Nadu is home to prestigious educational institutions like IIT Madras and Anna University, which have technology and entrepreneurship programmes. These institutions can be sources of talent, research collaboration and entrepreneurial support.
- Startup Hubs: Startup hubs and coworking spaces like The Startup Centre, WorksBee, and Coimbatore Innovation and Business Incubator (CIBI) offer spaces for IT and SaaS Startups to work, network and collaborate.
- Industry-Specific Events: Industry-specific events and conferences in Tamil Nadu, such as SaaSx and other IT-related conferences. These events offer networking opportunities and exposure to the local IT and SaaS community.
- Chennai Tech Community: Online forums and communities like Chennai Geeks and other IT-focused groups on platforms like LinkedIn can be great places to connect with professionals and learn about industry trends.
- Investor Networks: Angel investor and venture capital networks in Tamil Nadu, as they can provide funding opportunities for IT and SaaS Startups. Organisations like The Chennai Angels are active in this space.
- Legal and Regulatory Support: Law firms and organisations specialising in technology and IT law to navigate legal and regulatory aspects of IT and SaaS businesses.
These resources collectively form a strong support system for the IT and SaaS industries in Tamil Nadu. Leveraging these resources can help IT and SaaS professionals and companies thrive in the region.
BPO, KPO, LPO
Well-developed tier II cities with lower real estate cost and availability of technically qualified English-speaking workforce is a huge attraction to BPO companies in Tamil Nadu.
Data Centres
Strategic location, excellent OFC network and surplus power have ensured the emergence of Chennai as a hub for commissioning, operation and maintenance of data centres.
Engineering and R&D Services
A unique blend of manufacturing base and technology ecosystem provides an ideal environment for research and development centres.
Centres of Excellence
The government encourages industry to collaborate with academia in creating centres of excellence in emerging technologies
Central Government Industry Associations
- Indian Software Product Industry Round Table
- National Association of Software and Services Companies
- Other Service Providers Association of India
- Internet & Mobile Association of India (IAMAI)
Tamil Nadu Industry Associations
- SaaSBoomi
- ICT Academy