Cloud Powers SaaS Growth in APAC

by CXOtoday Staff    Oct 20, 2009

Driven by the ongoing economic slowdown and growing interest in cloud computing, the Software as a Service (SaaS) market is impacting the on-premise application segment in the Asia-Pacific Region excluding Japan (APEJ).

Research firm Springboard’s latest study has predicted the SaaS market to be worth $ 2.25 billion by 2012 in APEJ.

"The ongoing economic slowdown and interest in cloud computing have emerged as the primary factors driving increased interest in subscription-based SaaS solutions throughout the region," said Balaka Baruah Aggarwal, senior research manager for emerging software at Springboard Research.

"Going forward, SaaS-related services and consulting revenues will grow substantially over the next 18-24 months as more partners enter the ecosystem," added Aggarwal.

As per the research, 50% of enterprises who were evaluating on-premise application ultimately settled for SaaS.

Contrary to the belief that SaaS model will appeal only to SMEs, the study found that the highest penetration of SaaS is among large enterprises — those with more than 1,000 employees.

"Large enterprises are typically more experienced and IT savvy and are hence better prepared to leverage innovative technologies or approaches like SaaS to reduce costs," commented Michael Barnes, vice president of Software Research at Springboard Research.

Barnes, however, added that "SaaS vendors will have to compete more fiercely to justify replacing these (on-premise applications) previously deployed solutions with SaaS-based offerings".

The telecom sector led the other sectors in SaaS adoption, followed by education, infrastructure & construction, professional services and retail.

Australia leads other countries in the region, while India and China hold good potential.

In terms of applications, CRM is the most widely deployed SaaS application, followed by security compliance and collaboration tools. However, content and collaboration was the most deployed application in 2009., Citrix Online, Cisco Webex, Microsoft, Netsuite, Oracle, and RightNow were the prominent players in the SaaS segment.