Software-as-a-Service Market To Grow in AP region

As the economy still uncertain, companies are still looking for ways to be more effective in the most cost-efficient way. Corporate decision makers are choosing equipment that comes with power saving and environment friendly functionalities.

Also. companies are slowly considering Software-as-a-Service (SaaS) due to its business nature. Pay only what you use or pay as you use. The only stumbling back of this service is quality, security and reliability.

But despite these concerns, IDC expects the SaaS market to take off significantly in 2009, despite a challenging year for IT market in Asia/Pacific (excluding Japan) region. According to IDC’s latest report “Asia/Pacific (excluding Japan) Software-as-a-Service Market Size and Forecast, 2009-2013: The Growth Has Yet to Peak”, the regional SaaS market is expected to reach US$298 million in 2009, which is an increase of 18% from 2008. This growth rate is 6 times higher than the overall packaged software market growth of 3% in 2009.

Enterprises are considering to shift the hardware and software maintenance expenses towards SaaS, which appears to be a cost-efficient alternative by merging the license, hosting and management fees into a single subscription fee.

With a low upfront investment cost, SaaS is also a good testing ground for enterprises to try out new applications before making heavy investment and enterprise-wide implementation. In the emerging markets, companies are also likely to embrace SaaS with open arms, because they have less prior IT investment and legacy issues.

In terms of market size, Australia is expected to contribute 45% to the overall SaaS market, followed by the PRC, where the country contributed 29% to the market. The active local vendors in China are driving awareness and adoption of SaaS, accelerating growth over the next 5 years in the market at a CAGR of 25%. India will be another fast-growing market that is expected to grow at a CAGR of 42% within the next 5 years.

The report also shares insights into the different applications that are more likely to be delivered via SaaS. As a result of aggressive marketing initiatives over the past few years, CRM applications are expected to lead in the APeJ SaaS market in 2009, capturing 31% of the overall SaaS market in the region.

IDC also notes that more companies are finding the subscription of human capital management and financial applications via SaaS is a very feasible and attractive proposition. Pervasively available software such as collaborative and security software is also expected to increase in significance as far as SaaS delivery model is concerned.

Before you plunge into SaaS, evaluate your needs first and decide whether SaaS will be more efficient than maintaining your own infrastructure and application. At the end of the day, efficiency should come first before cost-savings. But of course, it’s better to have the best of both worlds if possible.

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