Singapore to develop SaaS for SMBs

update At CommunicAsia tradeshow, ICT regulator IDA announces plans to issue call for collaboration worth S$21 million to develop sector-specific software-as-a-service to help smaller companies adopt IT services.
Written by Kevin Kwang, Contributor

update COMMUNICASIA, SINGAPORE--Heavy cost burdens of IT products and services on local small and midsize businesses (SMBs) have prevented them from adopting technology. To address this, the government will partner both public and private entities to develop the local software-as-a-service market to help smaller enterprises deploy such tools.

Speaking at the Infocomm Media Business Exchange (imbX) tradeshow here Tuesday, Yaacob Ibrahim, Singapore's minister for information, communications and the arts, said the adoption of SaaS will help SMBs lower their IT expenditure as they can benefit from the pay-per-use model.

With this in mind, he revealed the Infocomm Development Authority of Singapore (IDA) will be issuing a S$21 million (US$16.5 million) call-for-collaboration (CFC) to develop "high-impact, sector-specific" SaaS products. This will be in partnership with other public sector agencies such as Spring Singapore, e2i, and the Ministry of Community Development, Youth and Sports, Ministry of Education, he added.

"This CFC targets sector where many SMBs are largely manual in their core operations, such as the education, services, maritime and logistic sectors," Yaacob said.

Andrew Khaw, senior director for industry development group at IDA, told ZDNet Asia in a separate interview that the initiative was specifically targeting companies with 10 or fewer employees on its payroll, or "micro SMBs", which constitute some 80 percent to 90 percent of Singapore's community of 160,000 SMBs.

Citing an earlier IDA survey, Khaw noted that 5 in 10 SMBs in 2010 use IT services, but once "basic" services such as accounting and payroll are taken out of the equation, the ratio falls to 3 in 10. This is because these smaller businesses do not have a lot of resources or knowhow to leverage IT to solve their pressing workplace needs, he said.

Furthermore, the micro SMB segment is very fragmented and there is little impetus for IT vendors to create products for these businesses, even though there is obvious market potential, he added.

"While there are general schemes and agencies such as Spring Singapore helping SMBs better utilize IT, it is hoped that this CFC will encourage vendors to build products for the smaller SMBs. The new products can hopefully be exported, too," Khaw stated.

Meeting niche needs with cloud
Khaw went on to say the SaaS products envisioned will go beyond just Web mail and storage services, and be tailored to meet specific sector needs.

For example, local vegetable wholesalers have problems sourcing for transport services to ferry their produce around. To solve this, the targeted cloud offering should help consolidate all transport service providers on a single platform and enable wholesalers to engage them via the Internet or mobile devices, he suggested.

Another instance would be allowing coffee shop owners to share data regarding their cleaning crew and schedules, so as to better distribute available resources, the IDA executive said. Currently, toilets at many coffee shops are often not cleaned in a timely manner and such IT tools would help alleviate such situations, he added.

In all, the SaaS CFC aims to benefit 300 smaller companies and the IDA hopes these will come from 5 to 8 sectors, including the four mentioned earlier by Yaacob, stated Khaw.

Update on ongoing IT initiatives
In his speech, Yaacob also elaborated on Singapore's IT growth, stating that total revenue generated by the local ICT industry grew by 18 percent to S$83 billion (US$65.4 billion) in 2011. Export revenue grew from 66 percent to 71 percent, while the ICT manpower base grew from 141,300 to 142,900, he added.

On the progress of the government's eGov2015 masterplan, the minister said its data.gov.sg portal had put out over 7,000 government data sets for public use. This marked a jump of some 2,000 from last year's 5,000 data sets.

The mGov@SG portal has also grown and now houses more than 120 government mobile apps, up from over 40 apps from a year ago, he added.

As for expanding the local 4G market, Yaacob pointed out that the IDA recently sought industry views on its proposed framework to allocate a total of 320 megahertz of spectrum for the latest wireless technology.

Once the framework is finalized, the IT regulator will conduct the 4G spectrum auction by 2013, he said.

The minister also took the opportunity to highlight a relatively new tax initiative meant to encourage energy efficiency in data center deployments. Introduced in March this year, the Investment Allowance Scheme for Energy Efficient Projects (Data Centers) allows companies to claim up to 50 percent of their qualifying expenditure on the installation of energy-efficient equipment in data centers as tax relief, Yaacob explained.

Singapore is in the midst of setting up a Data Center Park to attract multinational companies, banks, telcos, enterprises, and Internet and media companies to set up data centers, shared services and regional offices in the country.

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