Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

APAC Software-as-a-Service awareness at an 'all time high'

Jared Heng | Sept. 15, 2008
Annual SaaS growth rate of 59 per cent forecast to 2011

SINGAPORE, 15 SEPTEMBER 2008 -- APAC's (Asia-Pacific excluding Japan) software-as-a-service (SaaS) market is expected to jump to about US$1.8 billion by 2011, according to Springboard Research. The SaaS market was worth about US$274 million in 2007.

The research firm expects the market to register a compound annual growth rate of 59 per cent during the forecast period. Salesforce.com remains the dominant SaaS vendor in the region, while other key players include Cisco Webex, RightNow, Netsuite, Citrix Online, Microsoft and Oracle, Springboard says.

A Springboard survey showed that SaaS awareness and familiarity among some 500 IT leaders in India, Southeast Asia, China, Australia and New Zealand has reached an all time high. 

However, the research firm notes that regional customers are still struggling with issues like finding the right application and ensuring reliable connectivity. Data reliability and security concerns have also affected the market's growth.

Although SaaS awareness has reached a peak, deployments in the region demonstrate that the market is still in its early stages, said Balaka Baruah Aggarwal, senior manager of emerging software at Springboard Research. That's because most customers have deployed SaaS applications in isolation without integrating these with other enterprise applications.

Adoption challenges

Aggarwal advised vendors to continue educating customers on the best ways to derive SaaS benefits, especially in China, Southeast Asia and India.

According to the survey, the technology, manufacturing and financial services industries have emerged as leading verticals in the region to adopt SaaS applications.

However, respondents said that investment in existing on-premise applications was the biggest obstacle to SaaS adoption.

SaaS' traditional value propositions of low upfront investment and ease of use and management are no longer enough to lure existing customers with on-premise applications, said Michael Barnes, Springboard's vice president of software research.

Barnes said that SaaS vendors would have to respond by offering functionality that existing on-premise applications do not offer. They also need to greatly expand local partner channels and delivery capabilities to appeal to these customers.

Regional trends

Australia remains the largest and most mature SaaS market in the region, according to Springboard. Strong SaaS market growth is also observed in many parts of India and China as vendors step up investments in both countries.

In terms of revenue generation, CRM leads Asia's SaaS application market with a 42 per cent market share, Springboard says. This is followed by on-demand collaboration tools and core enterprise applications like ERP and Supply Chain Management.

Adoption of other SaaS applications like on-demand e-mail, desktop applications, security and compliance, HR payroll, accounting tools, and e-procurement platforms, also grew rapidly last year.

There are opportunities for SaaS across many applications, but Springboard believes that on-demand collaboration will emerge as the most pervasive SaaS application as more enterprises seek to leverage and empower an increasingly distributed workforce, Aggarwal said.

 

 

Sign up for Computerworld eNewsletters.