China SaaS market to reach US$171 million in ’10: Springboard
China’s software-as-a-service (SaaS) market is expected to grow at 56 per cent next year to reach US$171 million in revenues by the end of 2010, according to a report from Springboard Research.
The IT market research company has recently launched the report titled, ‘Software-as-a-Service in China: 2009/2010’, which further reveals that demand for SaaS will increase in the next two to three years. It also said the growth rate will far exceed that of the traditional IT industry, including the on-premise software market.
The Springboard survey also indicated that three out of four respondents interviewed are already subscribing to SaaS solutions, while out of the remaining, more than half are likely to subscribe to SaaS in the next 12 months.
“Also, almost 100 per cent of respondents in China reported being ‘aware’ of the SaaS concept, against only 52 per cent last year,” the report said. “In terms of vertical industries, SMBs in retail, logistics, manufacturing, services and circulation report higher SaaS adoption.”
The report also noted that on-demand applications in security and compliance have the highest penetration among the SaaS adopters in China, owing primarily to the large number of on-demand security applications available for free. Web conferencing/collaboration, customer relationship management (CRM) and e-mail were the other SaaS applications with high penetration in the country, said the report.
“On-demand security applications have a high penetration, but they account for only a small percentage of total SaaS revenue in China. The majority of SaaS revenue is driven by CRM, e-mail and collaboration applications,” said Balaka Baruah Aggarwal, senior research manager for emerging software at Springboard.
According to the survey, the majority of SaaS applications in China are deployed in isolation. Chinese organisations are also behind the regional (Asia Pacific) average in terms of integrating SaaS solutions with enterprise applications.
Further, the survey noted, the largest percentage of SaaS purchases are made during face-to-face interactions, while only 22 per cent of purchases were made online through SaaS vendor websites.