Saas in the Asian Context by Springboard Research

Filed in archive Enterprise Software
by prashanth

Springboard Reseach has recently publised a report titled "The Software as a Service Market in Asia Pacific, 2005 to 2008: Executive Overview". Its a report that as the name suggests covers the SaaS market in the Asian market.Report is based on a survey of 210 CIOs and IT decision-makers at small and medium enterprises in Australia, China, India, Korea, Malaysia, the Philippines and Singapore helps to contribute to this executive overview.The report is accessible at the site.

Below are excerpts from the report:

Our review of the Asian SaaS market revealed a particularly dynamic, promising and exciting corner of the IT market. Many segments of the market are doubling in size every year, and the pace of strategic experimentation is astounding.

• The SaaS Market is Here to Stay: Unlike many hot IT industry buzzwords that come and go, all evidence we gathered points to the long term staying power of the SaaS model. Early adopters report significant savings and high satisfaction, vendors are investing heavily, and ecosystems to support SaaS growth are taking shape quickly.
• SaaS is not Just for Asia's Small and Medium-sized Businesses: Although adoption levels for SaaS will be greater in the SMB market sector, vendors indicated there is activity in the large enterprise sector as well, and that upper mid-market and large businesses represent some of their largest and most important clients.
• Competitive Frameworks in the Enterprise Application Industry will be Reshaped by SaaS: Traditional enterprise application vendors are already adjusting their offerings to address the SaaS dynamic, and new formidable competitors are emerging at a rapid pace.
• SaaS is in the Process of Branching out of the Core CRM Segment to other Application Markets: CRM has been the pioneer and largest segment of the SaaS market, but a myriad of other markets are now gearing up for a SaaS push.
• A SaaS Channel and Ecosystem is Emerging in Asia Rapidly, but it is Marked by Experimentation and Fear: The race is on as traditional software firms and SaaS vendors are working hard to develop extended regional networks of resellers, system integrators (SIs) and developers.
• The Asia Pacific SaaS enterprise applications market amounted to US$80 million in 2005, and generated 82% revenue growth over the previous year. The market is projected to grow at a CAGR of 84% from 2005 to 2008.
• CRM is the largest SaaS application segment in the region, representing 50% of total SaaS revenue in 2005. CRM is trailed by Web Conferencing and Collaboration (30%) and back-office applications such as ERP (9%)
• Australia is the largest regional SaaS market with a 36% share of 2005 Asia Pacific revenues. China/Hong Kong (16%) and Korea (10%) are the next largest regional SaaS markets.
• Salesforce.com leads the regional SaaS market with a 21% revenue market share. WebEx (11%), RightNow Technologies (9%), Oracle (6%) and NetSuite (4%) follow the market leader.
• Based on a survey of Asian Small and Medium-sized enterprises, 41% were aware of the SaaS concept. Only 29% of SMEs surveyed had reported adopting SaaS; however, many likely did not fall into Springboard's official SaaS definition, which would lower this figure.
• The primary factor driving SMEs to adopt SaaS applications is cost benefit (33%), followed by ease of use and business benefits.
• Of the surveyed SMEs that had adopted SaaS, they reported savings ranging from 5-55% compared to the traditional licensed model, with the majority (58%) reporting estimated savings of between 20-30%.
• The primary factor preventing SMEs from adopting SaaS is the perception that it is more expensive than licensed software. The next most important inhibitors are a lack of SaaS understanding and security concerns.
• Among SMEs that had not adopted SaaS, 25% indicated plans to do so within the next 12 months. The primary application being planned is CRM, followed by web collaboration, security and HR applications.