Recession or Not, Australia SMBs Continue to Invest in SaaS, Says Study

Small and medium businesses (SMBs) in Australia are expected to invest $66 million in SaaS (News - Alert) applications this year, more than 11 percent of what they invested last year, predicts New York-based Access Markets International (AMI) Partners.

 

Demand for SaaS applications will only be the cheerful factor in the IT segment in today’s grim economic climate, says the researcher. To weather the economic storm, SMBs in Australia have started focusing on improving internal efficiency that they hope will gain them a competitive edge.

 

“Deploying ERP applications is essential to meeting this goal. Nearly 79 per cent of SBs and 82 per cent of MBs see the importance of using the application, up by 8 per cent and 25 per cent respectively from 2007,” said Analyst Yuki Uehara.

 

Australian SMBs, many of them are on expanding mode, want flexibility, scalability and accessibility that ERP offers, according to the company. The research firm estimates roughly a third of these SBs and a fourth of MBs are planning to outsource IT security.

 

To improve customer satisfaction and maximize sales from existing customers, many SMBs are deploying seamless CRM applications.

 

 “Where the overhead cost of CRM adoption is too burdensome given the current cost-cutting pressure, SaaS offers flexible subscription-based pricing, no overhead, and a shorter installation timeline than in-house installation,” said Uehara.

 

Other business applications account for the vast majority of the SaaS space. Roughly a third of Australia SMBs are using applications via SaaS. Popular applications include email, accounting, online data backup, document management, and web conferencing.

The researcher predicts that these applications may collectively generate 82 percent of total SaaS spending and may grow by 10 percent in 2009.

 

The opportunity for SaaS model is not limited to applications alone. Actual incidences of security breaches have increased among SMBs as their need for adequate security has risen.

 

 A subscription-based managed security service offering may be the best match for Australia SMBs’ growing needs in coming years, suggests the researcher.

 

Deploying multiple security solutions and products makes security environments too complex to manage. This is particularly true for Australia SBs that have very limited internal capability and resources to manage an increasingly complex security environment, according to the company.