On-Demand Software Market Set To Grow

by CXOtoday Staff    Mar 01, 2007

Analysis from Frost & Sullivan, Asia Pacific On-demand Software Market, reveals that revenues in this market - to cover 12 major Asia-Pacific countries ex-Japan - totaled US$70.3 million in 2006 is forecasted to grow at a CAGR (compound annual growth rate) of 27.1 percent (2006-2009), will reach a market size of US$144.3 million by end-2009.

On-demand software is a software distribution model where applications are hosted by a vendor or a service provider, and made available to customers. Known also as software as a service (SaaS), on-demand applications and hosted applications, the study covers only enterprise applications that includes customer relationship management (CRM) software, web conferencing and collaboration software, human resource (HR) applications, finance and accounting software, and other enterprise solutions such as enterprise resource planning (ERP), supply chain management (SCM), business intelligence(BI), and product lifecycle management (PLM).

“The rising number of SMEs, and the increasing adoption of software solutions that provide them with a competitive edge is likely to give rise to greater deployments of on-demand software across the region,” notes Subba Iyer, director at Frost & Sullivan.

“The advantages of web-based accessibility, cost feasibility, faster implementation cycles, and manageability would appeal to businesses; more so for SMEs,” adds Iyer.

Other findings of the survey include CRM software as the dominant solution in 2006, followed by collaboration and HR applications software. An increasing focus on enhancing customer service and mobility of usage were among key drivers for deployments of on-demand CRM software in Asia-Pacific.

Nevertheless, technological and infrastructural limitations, such as inadequate and costly bandwidth in developing countries in Asia-Pacific, remain a major barrier to adoption of on-demand software solutions. Similarly, security concerns on confidentiality of data and use of third-party hosting services are likely to hamper uptake of on-demand software.