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market to grow to US$460 million by 2010
IT market research company
Springboard Research has announced results from its latest research covering
the Software-as-a-Service (SaaS) Customer Relationship Management (CRM)
market in Asia (excluding Japan).
Springboard estimates that the SaaS CRM market will grow at a compound
annual growth rate (CAGR) of 61 per cent between 2006 and 2010. Springboard
pegged the SaaS CRM market in Asia at US$69 million in 2006, and expects it
to reach US$460 million by 2010.
SaaS is a disruptive innovation that has the potential to transform the
software industry. Many new players are entering the SaaS market, while
established software companies are scrambling to compete against these new
entrants by developing SaaS products themselves.
Australia, Singapore, Hong Kong, Korea, India, and China are the key SaaS
CRM markets in Asia Pacific. Of these, Australia remains the top market,
accounting for 35 per cent of all SaaS CRM sales generated in the region.
“SaaS CRM has gained acceptance in Asia’s business mainstream and the coming
year will see higher adoption rates as larger enterprises opt for SaaS CRM,”
said Balaka Baruah Aggarwal, Senior Manager for Emerging Software for
Springboard Research. “At the same time, the market is set to witness
unprecedented growth in the SME sector as a spate of new initiatives by
vendors such as SAP, Microsoft, and Oracle promote their CRM offerings,”
Increased adoption among larger enterprises will be the turning point in the
uptake of SaaS CRM and will bring the model a legitimacy that it did not
have when it was mainly used by small and medium enterprises (SMEs).
Already, leading vendors like Salesforce.com, who had traditionally targeted
the SME market, are now eyeing larger enterprises.
Springboard Research also forecasts that the SaaS CRM market is set for
consolidation as the number of players increase and bigger players make
serious forays into the marketplace.
Springboard currently estimates that SaaS CRM represents the largest segment
of SaaS application expenditures in Asia at 45 per cent, followed by
collaboration, ERP/PLM/SCM applications, and human resource applications.
Within the SaaS CRM segment in Asia, Salesforce.com has captured a very
dominant position in the market. Other prominent vendors in the region
include RightNow, Oracle, and Netsuite.
“Springboard Research believes that a substantial portion of the growth in
Asia Pacific’s SaaS CRM market will come from the SME segment. We expect
SMEs in Asia Pacific to go for simpler CRM solutions that are not too
complex,” said Aggarwal.
“This will drive CRM vendors, especially the traditional licensed software
companies, to sell stripped-down versions of on-premise offerings or to
develop SME-specific applications for distribution via the SaaS model.”