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.