Software-as-a-Service Ups Its Game in New Zealand

by CRM Today

Market Expected to Experience 65% Growth in 2007 and Grow to NZ$64 Million by 2010

Springboard Research, a leading innovator in the IT Market Research industry, today announced the results of its latest research on the Software-as-a-Service (SaaS) market in New Zealand. Increased vendor activity and the inherent appeal of SaaS have been responsible for the market growing 65% in 2007 to NZ$14 million. Together with Australia, New Zealand continued to be the most mature market in the region.

“Organizations in New Zealand have been leading adopters of SaaS in the region,” said Phil Hassey, Australia & New Zealand Country Manager for Springboard Research. “SaaS in many ways is uniquely suited to New Zealand- both from a user and developer perspective. SaaS has the potential to free the user from relying on the local infrastructure and implementation capabilities of the software developer as well as giving New Zealand ISVs easier access to a global playing field” added Mr. Hassey.

Compared with traditional software implementations, the business user is becoming the key influencer and enabler regarding SaaS in New Zealand. As non-IT personnel can easily choose, implement, and use SaaS applications, many business users are pushing forward with SaaS either without the knowledge of the IT department in larger organizations, or in the absence of an IT department in smaller companies.

“The number one reason organizations adopted SaaS was because of ease of use and manageability, which empowers non-IT staff to make their own software decisions based on their business needs, instead of their IT infrastructure,” said Balaka Aggarwal, Senior Market Analyst for Emerging Software for Springboard Research. “In countries like New Zealand where IT staff can be expensive compared to the rest of Asia, as well as in high demand, these benefits combined with zero or low maintenance, quick and easy deployment, and a lower cost of ownership help to make SaaS a more cost effective option for most organizations.”

Buoyed by the success of SaaS, Springboard saw that there has been considerable activity in the local ISV space in New Zealand. While multi-national SaaS pure-plays have been active, local ISVs have also stepped up and are being recognized both in New Zealand and internationally. The emergence of small but focused players like Xero (accounting services) who recently raised $15 million to foray into the international market indicates the increased maturity of local players.