G2's Predictions and Strategies on India's SaaS Future

G2's latest report, "Proving Value in the Age of AI," highlights the shifting landscape of software purchasing, revealing both opportunities and challenges as buyers demand quicker returns on investment (ROI) and more streamlined decision-making.

Despite rising software budgets, vendors face increasing pressure to deliver value fast, as deal velocity slows, buying cycles lengthen, and executive scrutiny intensifies. AI, once considered hype, is now a tangible differentiator, with 83% of organizations that purchased AI platforms reporting positive ROI within just three months. Additionally, security, integration, and trust have become top priorities for software buyers, as the number of products considered in purchasing decisions continues to shrink.

Godard Abel, CEO of G2.com, and Chief Revenue Officer Eric Gilpin, discuss how G2’s platform is helping vendors navigate these trends, offering actionable insights from their 2024 Buyer Behavior Report. With AI taking center stage, buyers are placing more emphasis on public product reviews and independent forums over traditional analyst firms, and they increasingly value integrations and service providers when selecting software. As Indian and global SaaS markets evolve, understanding these trends is critical for success in the rapidly transforming tech landscape.

Excerpts:

G2 Eyes India as Growth Engine

G2 has transformed how companies evaluate and purchase software. Could you share some of G2’s latest innovations and how you're continuing to shape the software marketplace?

Godard Abel:  G2 is the leading global software marketplace, with over 90 million business buyers annually using G2 to discover and research the best business applications for their companies. APAC is one of our fastest-growing regions, contributing over 20% of our global traffic. We’re also thrilled that 10% of our customers are now from India and APAC, with this region set to be our fastest-growing in the next decade. G2 serves over 3,500 customers worldwide, including major players like AWS, Microsoft, and Salesforce, along with high-growth startups.

One of our latest innovations is the AI agent, Monty. Monty assists software buyers by offering personalized recommendations based on business requirements and data from G2. We also launched a Monty AI agent for software sellers, which helps answer buyer questions and guide them through the sales funnel, sometimes even closing deals.

Could you share insights into G2's financial performance, particularly in India? Are there specific sectors driving your growth here?

Godard Abel: Globally, G2 has surpassed $100 million in revenue. APAC and India are our fastest-growing markets, though we’re not disclosing specific growth rates. Long-term, we believe India will play a major role in our journey to becoming a public-scale global company. With Eric joining us, we have the leadership to accelerate this vision, as he has guided companies like Upwork from private to public status.

Eric Gilpin: In India and APAC, we're seeing companies benefit from the globalization of business. Indian SaaS companies are thinking beyond their local markets and looking to solve global problems, supported by platforms like G2, which help build their global brand through customer reviews.

Are there particular sectors in India driving your success?

Godard Abel: AI and security are the fastest-growing sectors on G2, both globally and in India. AI software listings on G2 have grown by 150% over the past year, and security solutions are in high demand due to increasing cyber threats.

G2's latest report, Providing Value in the Age of AI, highlights a shift in buyer behavior, with companies consolidating tech stacks and focusing on ROI. What factors do you think are driving this trend?

Godard Abel: We’ve seen companies globally, especially in the US, consolidating their tech stacks due to the economic shift post-COVID. Companies now focus on ensuring quick returns on investment (ROI), with most buyers expecting ROI within six months. Software sales cycles have also lengthened, and purchases often require C-level approval.

Eric Gilpin: Another critical factor is the importance of integration. Buyers no longer want isolated solutions—they're looking for products that seamlessly integrate with their existing workflows and data strategies.

Where do you see the Indian B2B SaaS market headed next, and what can companies do to continue their global momentum?

Godard Abel: The future for Indian Software as a Service companies is incredibly promising. Companies like Freshworks and Chargebee have already become global leaders, and we expect many more to follow. While there has been a dip in venture funding recently, we're confident it will bounce back, and India will continue to be a hub for global SaaS innovation. Building trust with global customers is key, and platforms like G2 can help companies build that credibility through customer reviews.

Eric Gilpin: With India’s growing population of STEM graduates and the rapid adoption of cloud technologies, Indian SaaS companies are well-positioned to grow. The global market is more accessible than ever, and companies that capitalize on these trends will thrive.

So, this momentum requires Indian SaaS companies to innovate differently compared to their global counterparts, right?

Godard Abel: Yes, definitely. The core technologies are similar, but Indian SaaS companies have built a strong foundation of creating functionally compelling products quickly. However, the major challenge is that the largest software markets and revenue opportunities lie in the US and Europe. The key is for Indian SaaS companies to build global brands and earn the trust of buyers in these regions. Some companies like Chargebee and Freshworks have figured this out, but for most entrepreneurs, the challenge is about building a trusted brand internationally.

What are some of the striking differences you have noticed in software investment trends in India compared to the rest of the world?

Godard Abel: One interesting trend we found is that Indian SaaS providers, along with others in APAC, have a higher trust in AI—16% higher according to our buyer behavior survey at G2. India is ahead in areas like digital mobile payments, where almost everything is done digitally now. Also, India produces a large number of STEM graduates, giving the country an edge in AI innovation. For instance, G2 has built a major talent hub in Bangalore, including our global head of data science. It’s harder to find the right talent in the US for these specialized areas.

AI is clearly a hot topic. How do you think the hype will eventually settle, and when can we expect to see true performance measures emerge?

Godard Abel: At G2, we are trying to create a benchmark. We’ve started asking vendors three key questions about their AI use cases, ROI, and challenges. We’re already seeing positive ROI from categories like AI writing assistants, where tools like Grammarly are significantly improving productivity. While AI has been hyped, the investments by tech giants such as Amazon, Google, and Microsoft are enormous. Like the internet boom of the 90s, AI may see short-term pullbacks, but in the long run, it will likely transform industries on a massive scale.

Is there a framework for measuring AI ROI that G2 or other SaaS companies are using?

Goddard Abel: At G2, we are measuring AI ROI based on user feedback and reviews. For instance, we’re capturing insights on Salesforce’s new Agentforce platform and will soon have thousands of reviews on it. We believe that real-time feedback from business users is the best way to assess AI ROI at scale.

Do you believe trust issues and regulatory scrutiny will continue to impede AI investments? How do you see this playing out in India versus the rest of the world?

Godard Abel: Trust issues are not significantly impeding AI adoption in India. In fact, our data shows higher trust in AI here compared to other regions. The US is also not seeing AI held back by regulation. However, Europe’s AI Act might be constraining some investments. Nevertheless, with record investments in AI infrastructure and startups globally, regulation hasn’t slowed down innovation so far.

Cybersecurity concerns are increasingly becoming critical. What trends are you seeing in cybersecurity and data privacy, especially in terms of vendor selection?

Godard Abel: Security is becoming a top priority for software buyers. According to our recent buyer behavior report, 97% of buyers now involve a security stakeholder in the software selection process. Additionally, 81% of buyers consider a vendor’s history with breaches or security incidents as critical when evaluating solutions. This shift shows how crucial cybersecurity has become in vendor decision-making.