Small and medium businesses have contributed 36% of India’s total manufacturing output, which is basically 1/3rd of the country’s output go to SMBs and this sector is expected to contribute over 2 trillion dollars of the economy and create 50 million additional jobs by 2024, There is a tremendous amount of need emerging for technology and the penetration of technology in SMB is probably not that high at all, says
Paddy Srinivasan, chief executive officer at
GoTo Inc.

How do you see the market potential for technological advancement for the small and medium businesses in India?


Paddy Srinivasan: India is the largest SME market in the world. We have close to 75 million SMEs and that is projected to grow to 95 million or more in the next few years. It already contributes more than a trillion dollars to the economy and has a potential to create 10s of millions of jobs in the next few years. As these 10s of millions of people enter the workforce through the SMEs, there are several challenges that these SMEs are going to face. And the reason why we take a lot of pride in building solutions for the SMEs is because SMEs have every challenge that the large enterprise faces with a fraction of the budget available to solve those problems. The skills available at their disposal are also very very limited. They don’t work with the largest system integrators in the world, they don’t have an army of consulting companies to help them solve the problem.

So, it’s very important that we produce technologies that are ready to plug and play. As they bring in 50 million people into the workforce, these employees need very seamless user experience because they are working in Tier 2 tier 3 cities, where connectivity and network footprint might not be that pervasive so what they expect is their experience to be completely seamless end to end. What companies should expect from technology like ours is it should just be secured by default without having to invest in additional security software or get security experts and consulting companies to come and spend lakhs of rupees in fortifying the software. The technology should just be secure out of the box. That’s why we spend a lot of R&D bandwidth.

What is the market size of SMBs and SMEs in India at present and with respect to technological grounds, how much of that has been already tapped into that market or what are the new technologies that are going to tap that market?

Paddy Srinivasan: We have an annual report for the MSME and when we look at that, SMBs have contributed 36% of India’s total manufacturing output, which is basically 1/3rd of the country’s output go to SMBs and this sector is expected to contribute over 2 trillion dollars of the economy and create 50 million additional jobs by 2024. This was a research and survey done by the Times Group. Two trillion of India’s five trillion dollar economy ambition, 40% of the country’s output is going to come from the SMBs. The new workforce is going to come into the picture through SMEs. There is a tremendous amount of need emerging for technology and the penetration of technology in SMB is probably not that high at all.

Digitalisation itself contributes to 30% of the 70 million SMEs. That potential to help SMEs to digitalise their business is massive. And this was a report that Mckinsey provided, which talked about the digitalisation in SMEs is only 30% right now.

Post pandemic, technology is playing a bigger role than ever before. What are the challenges for the SMB businesses with respect to technology and how drastically have things changed for all businesses?

Paddy Srinivasan: The fundamental challenges that SMEs face in India are not any different from any of the enterprises or the challenges that enterprises face. Both in terms of not having the same amount of budget at their disposal to solve these problems also skills. That’s at a foundation level. To be more specific, one of the most important aspects of technologies that SMEs face is that they don’t have the skills or budget to run these products on premise or have someone on their staff to install, implement, manage this infrastructure in their network. That’s why you see a proliferation of adoption in the cloud and very specifically Software as a Service or SaaS business adoption from the SME. So, it reduces the capex and the needs for specific skills to manage and maintain this software inside the network. SMEs as we know are highly sustainable and some of them are seasonal. So any kind of pay-as-you-go model is extremely beneficial to them.

Typically SMEs just throw their workforces to the deep end of the ocean and expect them to perform in a relatively short amount of time. So, how do you create an environment using collaboration and communication software that helps them learn on the job by forging really strong relationships with their peers, reaching out for help and having the ability to do internal collaboration and communication in a very seamless manner.

The concept of security is a really important thing. Cyber security threats are not just unique to large companies, today ransomware attacks, in one of the recent surveys, about 75% of the SMEs said they have been subjected to ransomware attacks in the last 12 months. This has become pervasive and for SMBs they don’t have time, budget or the skills to go after very sophisticated cyber security products to prevent ransomware types of attacks from happening. Any technology they procure should be secure by default. And it should just provide security out of the box without having to invest in additional consulting and systems integrated resources to make it work for their environment. These are some of the problems that SMEs are facing especially in today’s world even though their workforce and frontline employees are becoming increasingly mobile and very distributed. It is really important for them to have access to technologies that are affordable, flexible from a subscription basis, available on the cloud so they don’t have to babysit and manage these technologies, user experience – very seamless, access to technologies which are secured by default.

What the financial capability of SMEs and SMEs in India to actually go for high end tech?

Paddy Srinivasan: Yeah, I think it is hard for me to make a sweeping statement that they cannot afford to buy high-end tech but high-end tech doesn’t necessarily have to come with high-end prices, right? Also, in today’s market, there is a drive towards super specialisation of products. And this is especially true from an enterprise software perspective because the type of specialisation means that enterprises have to procure 3x or 4x number of products to accomplish certain things like cybersecurity.

R&D and innovation in the global tech industry, how do you look at it? And how do you look at the contribution of India in the R&D centre? Are we doing well with the R&D or what’s the scenario there like?


Paddy Srinivasan: So, from what I perceive in terms of the global R&D is that it is becoming even more important in a post pandemic world, but perhaps a pre-recessionary kind of world is the need for R&D to be even more agile and nimble and fast than ever before, because the challenges are evolving extremely quickly. And for which we have to build and ship products at a speed which is 3x or 4x, which we have been used to over the last 10 years. India is a very, very important part of our R&D presence. It is more important today than ever before that R&D moves extremely fast in response to all the threats and the opportunities we are seeing in the market. I think every market disruption is an opportunity for technology companies like ourselves, only if and only if we can move fast to take advantage of it.

Being an industry player, what are the top priorities for SMBs and SMEs in India, with respect to tech support and tech solutions? How does the tech industry in India look for them?

Paddy Srinivasan: Yeah, from my perspective, as a tech industry player, I think we need to, especially given the the role that SMBs are already playing in India and the fact that another 25 to 30 million SMBs are going to be born over the next two to three years, and 50 million people are going to join the workforce to SMBs, I feel like we need to make software accessible for them.

Make tech affordable for them. Make tech easy for them both from an infrastructure point of view by deploying them on the cloud and making it subscription based but also make the software localised and and accessible for them to use and make them secure by design. I feel the security problems are getting in the way of companies leveraging technology and getting their jobs done so. So I think these are some of the basic principles that come to mind. Not only from our company’s perspective, but generally as a tech industry player, something that I wish we start seeing more of from all technology vendors.