India's SaaS to hit US$352M by 2012

By 2012, subcontinent poised to top Asia-Pacific in software-as-a-service market growth and familiarity, where hosted e-mail yield most returns, finds report.
Written by Liau Yun Qing, Contributor

A new report by Springboard Research has disclosed India as the region's fastest-growing software-as-a-service (SaaS) market, growing at a compound annual growth rate (CAGR) of 60 percent from 2008 to 2012.

This puts the country's SaaS market at an estimated worth of US$352 million by 2012, from US$105 million in 2009, the research firm said in a report released Tuesday.

Springboard highlighted that SaaS familiarity level in India is higher than the overall Asia-Pacific region, with 74 percent of Indian respondents indicating they were "very familiar with SaaS", compared with 66 percent of respondents in the region. "Zero or low maintenance" was cited as the key reason for SaaS adoption in India, followed by "ease of use".

Balaka Baruah Aggarwal, Springboard's senior research manager for emerging software, noted in the report that SaaS will grow rapidly in India not just in top-tier towns and cities, but also in secondary places over the next 18 to 24 months. This will be driven by momentum generated by vendor activity, participation by telecom companies as partners, and the hype around cloud computing.

The report noted that despite a focus on cost savings, very few organizations actually quantified their savings as a result of using SaaS applications. Respondents that did pointed to e-mail as yielding return on investment of 127 percent.

In terms of satisfaction, e-mail again ranked the highest with a score of 9.5 on a 10 point scale, with 10 being the highest and 1 the lowest. ERP (enterprise resource planning) ranked lower at 7.6, while overall SaaS satisfaction scored 8.

Michael Barnes, Springboard's vice president of software research at, added in the report that despite the "plug and play" nature of SaaS, which makes it suitable for fast adoption, enterprises should "ideally" ensure optimal usage in terms of application functionality as well as smooth integration with enterprise applications or other SaaS applications.

Barnes said the recessionary economic conditions presented a "significant opportunity" for SaaS vendors to market the low total cost of ownership associated with SaaS, persuade users to migrate from premise software applications and sell to first-time IT users.

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