 "APAC Business Applications As A Service Market Picking Up")
The Asia Pacific business applications as a service (BAaaS) market is picking up strong traction as enterprises grow increasingly aware of the model’s attractive low-cost value proposition. The economic slowdown has been driving the adoption of BAaaS as customers looking for cost savings moved from expensive on-premise deployments to the affordable software as a service (SaaS) model. With cost cutting being foremost on the agenda of CXOs, the easily predictable operational expenditure (OpEx)-based SaaS model hugely appealed to the senior IT decision makers.
New analysis from Frost & Sullivan, Asia Pacific Business Applications as a Service Market 2010, finds that the market earned revenues of over $769.7 million in 2010 and estimates this to reach $6,469.1 million in 2017.
“The positive buzz surrounding SaaS is driving enterprises to try out the delivery model by implementing it for customer research management (CRM), human resources management (HRM) and office automation applications,” said Mayank Kapoor, Research Analyst, Frost & Sullivan. “Having experienced rapid deployment cycles and flexibility at a low cost, enterprises are expanding the number of applications being used from the cloud.”
Despite the significant advantages over on-premise systems, widespread uptake of SaaS is being hampered by enterprise concern around security and privacy. Enterprises are skeptical about handing over control of their confidential/critical data to third-party service providers due to lack of clarity of access, storage, and archival policies of the service providers. These concerns are limiting BAaaS penetration to non-core applications as enterprises lack confidence to migrate their core applications such as enterprise resource planning (ERP) and supply chain management (SCM) into the cloud. Besides migration, integration challenges are also restraining market momentum.
To counter the skepticism, service providers are spreading awareness on the many benefits of choosing the solution and driving innovations in security and pricing models. They are highlighting the strength of the security measures in place and their effectiveness vis-à-vis on premise systems secured by firewalls and antivirus systems.
Service providers are also offering the private or hybrid cloud option, depending on clients’ data storage and security requirements. Over the medium term (3-4 years), significant innovations are expected to further augment the security of SaaS-based applications.
“It is imperative for service providers to raise confidence by following a highly transparent framework to cloud computing,” said Kapoor. “This includes adherence to industry best practices such as ISO 27001 and SAS 70 framework to build trust among customers.”
The service level agreements (SLAs) must be clearly specified and move beyond availability issues to include factors such as disaster recovery and incident handling. Regular assessment by third parties will help instill customer and enterprise trust.