New Delhi: A survey of IT decision makers from small, medium and large enterprises in India has revealed that ease of use and convenience are the top reasons for adopting Software as a Service (SaaS). The study by Springboard Research, in the IT Market Research industry, also revealed that the biggest barriers to SaaS adoption in India are a high level of comfort with on-premise applications and lack of adequate awareness about the availability of suitable SaaS applications.
In its report titled “Software as a Service in India: An Overview,” Springboard forecasts that India SaaS market will register a compounded annual growth rate of 76 percent between 2007-2011 and reach $260 million in revenues by 2011. Springboard also said that the Indian SaaS market is poised for high growth with 76 percent of survey respondents, who have not adopted SaaS, planning to do so within the next 12 months. SaaS-based ERP and CRM solutions are likely to see highest demand in the country.
Balaka Baruah Aggarwal, senior manager of emerging software for Springboard Research, said, “Application penetration in Indian enterprises is low and since CRM is a fairly new concept in India; an on-demand mode makes it easy for Indian businesses to adopt CRM applications without investing huge amounts of money. Similarly, on-demand ERP offers a viable alternative for many organizations, as many small organizations are either unable to afford expensive ERP solutions or have already deployed point solutions.”
Springboard’s survey found that SaaS customers and prospects in India do not significantly recognize the value-add provided by local resellers and agents. 69 percent of SaaS users indicated that a reseller or partner is not necessary to make a SaaS purchase. Resellers contributed to just one percent of SaaS purchases, while the largest number of SaaS purchases was made during face to face interaction with a representative from the vendor.
Aggarwal, added, “As the consumer base grows and gets more scattered geographically, developing local channels and base of partners is a key challenge and likely to emerge as an important differentiator in the market. Vendors will have no choice but to ramp up partner/reseller channels to keep up with demand.”
The end-user survey also focused on additional areas such as SaaS Pricing Models, SaaS buying pattners and key decision makers and SaaS usage and deployment trends.
“There is still a long way to go before the full range of SaaS benefits becomes well known as the current demand for SaaS applications is confined to just a few applications,” Aggarwal said. “Vendors need to push applications like email, security/compliance and human resources which have been adopted widely in other regions, even within Asia.”
Among the vendors, the report states that WebEx commands an estimated 69 percent market share in web-based collaboration tools, while Salesforce.com, Citrix Online, Microsoft and Ramco On-demand are other key players with a significant presence.
Source: Springboard Research: www.springboardresearch.com
