SaaS investments in 2010 to increase in APAC

by CXOtoday Staff    Jun 11, 2010

By the end of 2010, 75 percent of Asia Pacific organizations will increase their software as a service (SaaS) investments. According to a survey conducted by Gartner, 80 percent of the organizations surveyed are currently using SaaS for enterprise applications such as ERP and CRM. The remaining 20 percent plan to use it in the next 12 months.
Gartner analysts stated that SaaS has become more widely accepted in the Asia Pacific region in the past two years — this in spite of initial concerns revolving around security, performance and availability. These concerns, according to Gartner, have been gradually diminishing as SaaS business and computing models become more mature.

The top five most commonly used SaaS enterprise applications are financials (accounting), e-mail, sales, expense management, and customer service and support.
On the flip side, acceptance of SaaS remains ‘uneven’, say Gartner analysts, throughout the region, with a large variation in adoption patterns in different countries and industries. Of the organizations surveyed, respondents in Malaysia, Hong Kong and Singapore have used SaaS the longest. Australia has the lowest number of users with respect to period of SaaS use. However, there was growth in the number of new SaaS users in the last 2 years.

In India, SaaS uptake is still in the early stages. More than 80 percent of respondents using SaaS started using it in the past two or three years. The Gartner survey found that contrary to the belief that China is the least mature market about 50 percent of country’s based respondents have been using SaaS for four years or more.

According to a Gartner analyst, even though SaaS has potential in Asia Pacific, it is still emerging, with SaaS providers and users still on the ‘learning curve’. This curve includes fine tuning of technical issues, pricing, and engagement models to comply with legal requirements in the Asia Pacific.
Since SaaS is still relatively new, Asia Pacific organizations are still skeptical about the costs that can actually be saved versus using on-premises solutions — especially with low labor rates in many Asia Pacific countries. The definition of SaaS is still not well understood by many Asia Pacific organizations. To deal with this lack of awareness, some vendors are providing hosted software services. Unlike SaaS, these are easier to understand and offer more flexibility to customize the software.