Software as a Service, or SaaS as it is commonly known, is a delivery model which uses the Cloud to host and access software and data through the internet. This is in contrast to Hosted or On-Premise enterprise software solutions that organisations would manage and access directly through their own server network.
SaaS continues to enjoy worldwide growth with Gartner predicting that global SaaS revenues will grow 17.9% in 2012 and reach over USD$14.5 billion, up form just over USD$12 billion last year.
SaaS is generally accepted to have a superior business model than Hosted software due to its greater flexibility to add users, less capital investment up front, low training and maintenance costs and more accessibility through open API’s and Mobile capabilities.
In Asia Pacific, Gartner forecast revenue to rise to USD$934.1 million this year which has increased from the 2011 figures of USD$730.9 million, an increase of 27.8%.
10 years after the launch of SaaS experts are predicting that the SaaS market could grow to anywhere between USD $50 – USD $150 billion revenue of a $250 billion Enterprise software market.
Broad Applications Such As PM, ERP and CRM Most PopularEven though vertical specific software has the largest increase in interest, horizontal software remains the most widespread linking common purposes within distributed workforce models and virtual teams.
The fastest products which are seeing growth in SaaS models are Communication & Collaboration, Project Management, ERP as well as CRM applictaions.
Sectors that have the strongest adoption rate for SaaS models seem to be in Telecommunications. Second to this the other primary sectors such as Education, Construction, Professional Services and Retail Markets have equal SaaS penetration.
Mature Markets Lead APAC GrowthAdoption rates for SaaS are far higher in the more mature markets of Asia Pacific such as Australia, New Zealand, Hong Kong, Singapore and South Korea.
With more experienced IT industries and established infrastructure, higher volume of vendor availability for sales, marketing and support, mature markets have an advantage in the market demand for SaaS products.
Springboard research reported in 2010 that over 50% of those who adopted the Software as a service model had previously assessed a Hosted or On-premise application and chose to move forward with a SaaS model as the preferred option.
Historically Australia has proven to be the most mature market for software as a service. Recently however, regional giants India and China are increasingly active in SaaS adoption.
Global Characteristics and ChallengesDifferent regions around the world experience different challenges and characteristics which shape their SaaS adoption.
In Asia it seems the most challenging aspect for adoption of the software as a service model is a longer than expected deployment timeline.
While Europe, Middle East and Africa indicate that experiencing issues with network instability are more of a hurdle to overcome.
North America on the other hand, has challenges in limited flexibility of customization and integration as their key obstacles.
And China experiences trouble with localization and language for SaaS global vendors.
Whatever the challenges, there is no doubt that the appetite for SaaS is only going to continue to grow.