Businesses in the Asia-Pacific region, excluding Japan, will spend almost US$2.3 billion on software-as-a-service (SaaS) by 2012, growing their budget by 46 percent from 2008.
According to new study released Thursday by Springboard Research, SaaS penetration is highest among large enterprises, contrary to "popular belief" the platform will prove more attractive to small and midsize businesses (SMBs).
The study also found that most companies chose SaaS after evaluating an on-premise application, a sign that Springboard said indicated "SaaS applications have begun to eat into the on-premise applications market".
"The ongoing economic slowdown and interest in cloud computing have emerged as the primary factors driving increased interest in subscription-based SaaS solutions throughout the region," Balaka Baruah Aggarwal, Springboard's senior research manager for emerging software, said in the report.
SaaS-related services and consulting revenues will grow as more partners join the ecosystem, Aggarwal noted.
The research firm polled 530 technology and business leaders from large enterprises and SMBs across the region, as well as collated data from interviews with leading SaaS market players.
Higher adoption among large enterprises
"Large enterprises are typically more experienced and IT-savvy, and are hence better prepared to leverage innovative technologies or approaches like SaaS, to reduce costs," said Michael Barnes, vice president of software research at Springboard.
However, he noted that there is also growth of adoption among new segments of users that "previously could not afford expensive, on-premise software applications".
According to Springboard, while Australia currently leads the region in SaaS deployments, India and China will see increasing adoption of the platform. However, global SaaS vendors keen on the Chinese market will face "language and localization challenges".
The study also noted that CRM (customer relationship management) remains the most popular SaaS application, followed by security and collaboration tools.