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Traditional software applications are slowly beginning to yield ground to SaaS applications, with 32 percent of SaaS adopters replacing an on-premise application, says the latest bulletin ‘Software-as-a-Service in India 2009/ 2010’ from Springboard Research, an IT market research provider.
The bulletin also revealed that 22 percent of those already using an on-premise application have later chosen to adopt the SaaS version of the same application in another geography or department within the organisation.
The Springboard bulletin disclosed that India is the fastest growing SaaS market in Asia Pacific, and is estimated to register a growth of 60 percent CAGR from 2008 to 2012. The India SaaS market, which was $105 million in 2009, is estimated to be worth $352 million by 2012. The growing appeal of SaaS in India is also evident from the fact that SaaS familiarity levels in India are much higher than in the Asia Pacific region as a whole, where only 60 percent of respondents reported being ‘very familiar with SaaS’, as compared to 74 percent in India.
“The SaaS market in India is poised for continued strong growth, with the availability of a plethora of SaaS applications and related services,” said Balaka Baruah Aggarwal, Senior Research Manager for Emerging Software at Springboard Research. “Given the pent-up demand for SaaS applications among enterprises, the momentum generated by vendor activity, participation by telecom companies as partners, and the hype around cloud computing, SaaS will proliferate rapidly in the next 18-24 months, not only in top-tier towns and cities but even to secondary places,” Aggarwal added.
Cost & Convenience: The Top Reasons for SaaS Adoption
According to Springboard Research, ‘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.
In terms of satisfaction, SaaS scored an average of 8 on a 10 point scale (where 10 is the highest score and 1 is the lowest). Among applications, e-mail scored the highest with 9.5 while ERP generated a comparatively low level of satisfaction at 7.6.
Springboard noted that despite an overall focus on cost savings, very few organisations have quantified the savings accrued from using SaaS applications. Among the respondents who did quantify SaaS-related savings, e-mail had an astonishing 127 percent return on investment.
The Springboard bulletin observed that SaaS has been adopted by enterprises that are in high growth sectors like power, infrastructure, contact centres, banking, and technology.
“While the ‘plug and play’ nature of SaaS makes it suitable for rapid adoption, ideally enterprises should ensure optimal usage in terms of application functionality as well as to smooth integration with enterprise applications or other SaaS applications as required,” advised Michael Barnes, Vice President of Software Research at Springboard Research. “The recessionary economic conditions represent a significant opportunity for vendors to market the low TCO associated with SaaS, as they attempt to migrate users from on-premise software applications as well as sell to first-time IT users,” added Barnes.
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