More than 50% of SaaS adopters had evaluated an on-premise application before ultimately choosing a SaaS solution, indicating that SaaS applications have begun to eat into the on-premise applications market across APEJ, according to Springboard in a recently released report.
Nearly a third of adopters claimed to have had a SaaS application replace an on-premise one, the analyst firm added.
Report findings are based on Springboard's survey of 530 technology and business leaders from large, medium and small enterprises in ASEAN, China, India, Australia and New Zealand, as well as extensive secondary research and interviews with leading SaaS providers in the market, according to Springboard.
"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."
Springboard's survey found that the highest SaaS penetration in Asia Pacific is among large enterprises with more than 1,000 employees. This runs contrary to the popular belief that SaaS primarily appeals to the SMB sector, said Springboard.
In terms of verticals, SaaS penetration is strongest in the telecom sector, and then evenly spread across other major sectors, including education, infrastructure & construction, professional services and retail.
"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," said Michael Barnes, vice president of Software Research at Springboard Research. "On the other hand, we are witnessing a growing penetration of SaaS solutions among a new segment of users, most of whom previously could not afford expensive, on-premise software applications."
While Australia continues to be the most mature SaaS market in the region, India and China are upcoming hotbeds of SaaS activity, said the research house, adding that the Chinese market is encumbered by the language and localization challenges for global SaaS vendors, even as it holds potential similar to India.
The report also notes that despite a very strong current demand, the growth rate of SaaS market will naturally flatten somewhat as the market matures.
Based on the number of adopters surveyed by Springboard, CRM continues to be the most widely deployed SaaS application, followed by security/compliance and collaboration tools.
However, in 2009, Content and Collaboration surpassed CRM in terms of overall market size in Asia Pacific. Said Springboard, adding that Salesforce.com continues to dominate the SaaS market with other leading players including Citrix Online, Cisco Webex, Microsoft, Netsuite, Oracle, and RightNow.