January 03, 2008
SaaS CRM in Asia to Hit $460 Million by 2010, Springboard Says
By David Sims, TMCnet Contributing Editor
The SaaS (News - Alert) Customer Relationship Management market in Asia (excluding Japan) will grow at a compound annual growth rate of 61 percent between 2006 and 2010, according to a study by Springboard Research.
Springboard pegged the SaaS CRM market in Asia at $69 million in 2006, and expects it to reach $460 million by 2010.
Australia, Singapore, Hong Kong, Korea, India, and China are the key SaaS CRM markets in Asia Pacific, the report finds. Of these, Australia remains the top market, accounting for 35 percent of all SaaS CRM sales generated in the region.
"SaaS CRM has gained acceptance in Asia's business mainstream and the coming year will see higher adoption rates as larger enterprises opt for SaaS CRM," said Balaka Baruah Aggarwal, Senior Manager for Emerging Software for Springboard Research. "At the same time, the market is set to witness unprecedented growth in the SME sector as a spate of new initiatives by vendors such as SAP (News - Alert), Microsoft, and Oracle promote their CRM offerings," she added.
Increased adoption among larger enterprises, the Springboard analysts think, will be the turning point in the uptake of SaaS CRM and will bring the model a legitimacy that it did not have when it was mainly used by small and medium enterprises: "Already, leading vendors like Salesforce.com (News - Alert), who had traditionally targeted the SME market, are now eyeing larger enterprises."
In May of 2006 Springboard released a similar report, finding that the regional market (excluding Japan) saw revenues increase over 80 percent to $80 million in 2005. At the time, Springboard analysts said, the market was expected to grow to $501 million by 2008.
"The SaaS market is receiving considerable focus from software vendors operating in various spheres of the industry," noted Dane Anderson, Research Vice President at Springboard Research n 2006. "Global software giants, local ISVs and emerging on-demand software vendors all have a healthy dose of respect for the power of SaaS to disrupt the competitive frameworks of the software industry in the future."
The 2006 report said that given the cultural and economic complexity and diversity of the Asia Pacific region, the adoption of SaaS is not uniform across the region. Australia and New Zealand are closer to North America in terms of SaaS adoption trends, the analysts said, and Australia is the largest SaaS market in the region.
The current report says that as traditional software players step up their activities by offering proprietary SaaS CRM applications, large enterprises will be lured to the market, creating an entirely new base of customers who had previously been fence sitters. Springboard Research also forecasts that the SaaS CRM market is set for consolidation as the number of players increase and bigger players make serious forays into the marketplace.
The 2006 report said that given the cultural and economic complexity and diversity of the Asia Pacific region, the adoption of SaaS is not uniform across the region. Australia and New Zealand are closer to North America in terms of SaaS adoption trends, the analysts said, and Australia is the largest SaaS market in the region.
The current report says that as traditional software players step up their activities by offering proprietary SaaS CRM applications, large enterprises will be lured to the market, creating an entirely new base of customers who had previously been fence sitters. Springboard Research also forecasts that the SaaS CRM market is set for consolidation as the number of players increase and bigger players make serious forays into the marketplace.
Springboard currently estimates that SaaS CRM represents the largest segment of SaaS application expenditures in Asia at 45 percent, followed by collaboration, ERP/PLM/SCM applications, and human resource applications.
Within the SaaS CRM segment in Asia, Salesforce.com has captured a very dominant position in the market. Other prominent vendors in the region, according to the report, include RightNow, Oracle, and NetSuite (News - Alert).
"Springboard Research believes that a substantial portion of the growth in Asia Pacific's SaaS CRM market will come from the SME segment. We expect SMEs in Asia Pacific to go for simpler CRM solutions that are not too complex," said Aggarwal.
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Communications industry. The library offers whitepapers, case studies and other documents which are free to registered users. Today’s featured white paper is The Challenge of Maximizing Service Availability and Security. David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.
