Asia-Pac SMB software as a service market to reach $1.5 billion in 2012

SINGAPORE: Small and medium businesses (SMBs, companies with less than 1,000 employees) in the Asia-Pacific region (excluding Japan) will continue to boost their focus on scalable public cloud applications and will invest close to US$1.5 billion in Software-as-a-Service (SaaS) solutions, according to the latest research conducted by AMI-Partners. Driven by the need to continuously acquire new business capabilities and technology functionalities, SaaS solutions have emerged as a central lever for SMBs to implement their growth and innovation strategies.

AMI forecasts SaaS software and services adoption will more than double by 2015. The increasing demand for scalable pay-as-you-go application provisioning services will lead to an annual market growth of over 30 percent for SaaS solutions across the Asia-Pacific region. This demand will assure that the SaaS market will remain the strongest growing SMB software segment and will continue to outperform the total software market growth in the region by a factor of three.

“Thanks to rising mobile solution and broadband penetration levels, we’re seeing a considerable uptake in SaaS adoption among Asia-Pacific SMBs,” says Singapore-based Stefan Haas, AMI-Partners’ consulting director, Asia-Pacific. “The majority of SMBs will focus their 2012 technology investment priorities on solutions that will allow them to streamline operations to manage overall profitability levels and realize incremental business growth through geographical expansions and product and service innovations. SaaS solutions can provide SMB IT executives with the greatest value from the cloud, as they can access instantly available business functionality and build an adaptive technology platform for further business growth.”

In 2012, India and China will account for over 50 percent of total SaaS investment in the region and account for the lion’s share of total market growth. As a result of a constantly improving communications infrastructure and maturing vendor offerings, AMI expects the ASEAN markets to record the highest growth opportunities in the region as overall IT maturity and SaaS awareness levels are on the rise.

Most APAC SMBs go through three phases when adopting SaaS. “While many organizations start with standalone CRM and e-commerce deployments to boost trust and comfort,” notes Haas, “applications that enable an agile communications platform (including e-mail and productivity solutions) become a top priority thereafter. Finally, once a number of successful SaaS deployments can prove the benefits in application availability, flexibility and resiliency, SMB IT executives turn to more mission-critical applications such as industry solutions to further explore their use in a public cloud setting.”

The rapidly maturing IT sophistication of the Asia-Pacific SMBs will eventually lead to an accelerated adoption cycle for public SaaS solutions. The advantage these SMBs will have is they will not need to migrate from a legacy IT infrastructure and application environment. “SMBs still carefully weigh the risks related to data security, business continuity and service levels of providers before choosing SaaS services,” adds Haas. “Yet our intelligence suggests that SMB IT executives feel increasingly confident in public cloud deployments and conclude that the benefits outweigh potential risks once they have successfully deployed SaaS pilots.”