SaaS gaining mindshare over license model

Enterprises in the Asia-Pacific continue to buy software online, but software-as-a-service is pulling customer attention away from this distribution model, say vendors.

Enterprises in the Asia-Pacific region are continuing to purchase software online, but software-as-a-service (SaaS) is pulling customer attention away from this distribution model, according to some vendors.

Darryl Dickens, head of marketing, Hewlett-Packard software and solutions, Asia-Pacific and Japan, said a "significant portion" of the vendor's installed software offerings are delivered online.

In the Asia-Pacific region, excluding China and Japan, online distribution accounts for more than three quarters of HP's software business, said Dickens, in an e-mail interview.

He noted that physical delivery of software was preferred in Japan because of language localization and in China, because it is a legal requirement, but said the two countries are expected to embrace online delivery "over time".

"[Online distribution] has been growing well and reflects strong customer is widely accepted and considered an effective mode of interaction," he said.

Dickens added, however, that a different online distribution model, SaaS, is picking up in adoption rate due to its touted benefits such as lower total cost of ownership, quick deployment and lowered risk of implementation.

Different from software sold online, which is, downloaded or activated online but still installed on-premise, SaaS provides software accessible as a service over the Internet, with no installation of it on customers' hardware.

Stable broadband connectivity in the region is also helping boost interest in SaaS for HP, he said.

And SaaS lifts the burden of managing customer licenses and delivering software maintenance from vendors' shoulders too, said Dickens.

Manish Goel, BoxSentry CEO, echoed these points in an interview with ZDNet Asia.

Goel said the industry is "not shying away" from selling software online, but that customer interest in SaaS' "greater value proposition" is pulling vendors to answering this demand.

But he also noted that on-premise software is plagued by piracy--a factor in the company's decision not to sell software this way.

"Software piracy is a big issue. Research and development (R&D) is expensive and we don't want our intellectual property to be diluted," he said.

The e-mail security firm sells 60 percent of its software via SaaS and 40 percent on appliances.