SaaS set of stellar growth in Asia

Stuart Corner
Tuesday, 24 July 2007 01:51

Business IT - Technology

IT researcher, Springboard Research says that awareness and adoption rates for software as a services are increasing significantly across Asia.

Springboard claims that the market for SaaS almost doubled in 2006 to reach a value of $US154 million (excluding Japan) and it is forecasting a compound annual growth rate of 66 percent to 2010 by which time SaaS wil account for 15 percent of the enterprise software application market and be worth $US1.6 billion annually.

Springboard says it recorded a substantial increase in SaaS awareness in the last year, with awareness among 385 organisations surveyed - CIOs and IT decision-makers at enterprises in Australia, China, India, New Zealand, and Singapore - increasing from 41 percent in 2006, to 75 percent in 2007. Forty six percent of the surveyed enterprises said that they were using some form of SaaS, compared to 29 percent in 2006. Springboard says it also observed that the primary reason for adoption had shifted from price to other factors that included ease of use, ease of implementation, and lower maintenance.

"We saw significant increases across the board for SaaS through our research, which proves that SaaS has market momentum for the long run," said Dane Anderson, CEO & executive vice president for research at Springboard Research. "It is a very dynamic time for SaaS in Asia with pure-play vendors like Salesforce.com, NetSuite, and WebEx gaining increased traction [and] with smaller SaaS firms making moves into the region. Round that out with the large players in the industry like SAP, Oracle, and Microsoft becoming more aggressive with SaaS, and the market for the rest of 2007 and 2008 is going to be very interesting."

Smaller players identified as starting to make their presence felt included Australia-based Saasu (accounting applications), Aussiepay (payroll application), Singapore-based JustLogin (collaboration), China-based 800CRM (CRM on-demand) and India-based Adrenalin eSystems (payroll/employee management).

Springboard found that although customer relationship management (CRM) remains the largest SaaS application segment by revenue in Asia, representing 45 percent of total SaaS revenue in 2006, organisations are aware of and use many different types of SaaS applications. It also found satisfaction levels with SaaS applications ran very high, with all application segments scoring between a 7 to 8 on a 10-point scale.

"SaaS is definitely going beyond CRM, which is the area it has been associated with in the past," said Ravi Shekhar Pandey, research manager for Springboard Research. "With all segments of SaaS growing, we are seeing applications across the board being adopted by enterprises in the region and more importantly, we are seeing enterprises being very happy with the SaaS applications they are using. This bodes well for the market, not only the small to medium businesses that have been the mainstay for SaaS vendors, but also those large enterprises looking at SaaS for non-critical application."