SaaS Market Will Proliferate in India: Springboard

by CXOtoday Staff    Jan 20, 2010

Software as a Service (SaaS) is gaining significant acceptance in India which is seen as the fastest growing SaaS market in Asia Pacific with a CAGR of 60% from 2008 to 2012.

According to a new report released by Springboard Research, the SaaS market in India is expected to rise to $ 352 million by 2012 from from US$105 million in 2009.

SaaS as a concept is also gaining in popularity in India as compared to Asia Pacific region and is seen growing at the cost of on-premise applications. As per the report, 32% of SaaS adopters in the country are replacing an on-premise application.

Balaka Baruah Aggarwal, Springboard’s senior research manager for emerging software, noted in the report that SaaS will grow rapidly in India not just in top-tier towns and cities, but also in secondary places over the next 18 to 24 months. This will be driven by momentum generated by vendor activity, participation by telecom companies as partners, and the hype around cloud computing.

The satisfaction level for SaaS was found to be 8 on a 10 point scale. Email applications scored the highest with 9.5 followed by ERP at 7.6.

Michael Barnes, Springboard’s vice president of software research, noted in the report that despite the "plug and play" nature of SaaS, which makes it suitable for fast adoption, enterprises should ideally ensure optimal usage in terms of application functionality as well as smooth integration with enterprise applications or other SaaS applications.

Barnes said the recessionary economic conditions presented a significant opportunity for SaaS vendors to market the low total cost of ownership associated with SaaS, persuade users to migrate from premise software applications and sell to first-time IT users.

The research says zero or low maintenance is the leading reason for SaaS adoption in India, followed by ease of use . Among SaaS vendors, Salesforce.com, Citrix Online and CiscoWebEx have a strong hold over the market, as they have been in the market relatively longer than most other players.