Hi, this is Damodar Arapakota. As a technology entrepreneur, I spent several years developing and selling software products, specifically made for the public sector. These included citizen service delivery platforms and payment systems, both on-premise and SaaS versions. As a result, I have gained valuable knowledge and experience in this Vertical SaaS market.

1. Public Sector– The Most Important Vertical SaaS Market
Hi, this is Damodar Arapakota. As a technology entrepreneur, I spent several years
developing and selling software products, specifically made for the public sector. These
included citizen service delivery platforms and payment systems, both on-premise and
SaaS versions. As a result, I have gained valuable knowledge and experience in
thisVertical SaaS market.
We are seeing so many startups focusing on B2B and B2C applications and very few
focused on the public sector. The public sector is a largely untapped niche. It is the
largest client in any country. The public sector includes federal/central governments,
State/provincial governments, and Regional/County and City governments. All
government agencies and other organizations also come under the public sector. As per
Statista, the worldwide public sector IT spend was nearly USD 500 Billion, out of which
almost USD120B was spent on software
Many governments were initially apprehensive of using SaaS applications and external
data centers. But that resistance is almost gone. Traditionally the sales cycles in the

2. government are long. But with SaaS applications, which do not need large initial capital
costs, the sales cycles can be quick, if the price points are right.
The potential for SaaS in the public sector is enormous. The public sector can use almost
every area of software/technology – including Artificial Intelligence, Web 3, and Fintech.
The range of applications is vast – public-facing, business-facing, and internal. The public
sector is actively embracing digital transformation, opening the possibility for new
startups to come up with innovative solutions to improve operating efficiency. These
include Citizen Service delivery, Customer Service, Operations Management, Forms and
Workflows, Grant Management, Permits and Licensing, tax collection, fee collection,
internal and external payments, and records management. The list is very long.
Many governments also have special programs to fund startups, innovative ideas and be
their first pilot customer. Many successful startups used government grants, subsidies,
and credits as their first external funding and then went on to become very successful.
Governments are also very sticky customers, providing long-term value.
Some VCs are starting to appreciate the market potential of the public sector and
investing in Vertical SaaS startups with applications specific to the public sector.