SINGAPORE, 20 MAY 2009 -- Software-as-a-service (SaaS)-based customer relationship management (CRM) solutions will soon represent 48 per cent of the total CRM market in Asia Pacific (excluding Japan), said Springboard Research, an IT market research organisation. Its latest bulletin, ‘SaaS CRM in Asia Pacific: Strong Growth Despite Market Concerns’, pegs the SaaS CRM market at US$183 million at the end of 2008, and forecasts it to reach US$570 million by 2012.
The findings are supported by a Springboard survey of 296 SaaS users in enterprises across Asia-Pacific which confirmed that CRM is the top priority among the SaaS planners, with 40 per cent of potential buyers indicating a preference to invest in CRM in the next 12 months. The demand for SaaS CRM is highest in Australia and New Zealand, with 61 per cent of potential buyers citing purchase plans in the next 12 months, followed by India and the Association of Southeast Asian Nations (ASEAN) region.
“SaaS CRM will remain one of the fastest-growing markets in the region, as CRM penetration is still relatively low,” said Balaka Baruah Aggarwal, senior manager, emerging software, Springboard Research. “As organisations seek to better manage and ultimately reduce upfront IT-related capital expenditures, we expect SaaS-related spending to become a far larger percentage of total software spending, thereby ensuring strong ongoing growth.”
Popular applications
The bulletin notes that CRM is now the most frequently used on-demand application after e-mail, with 29 per cent of all respondents using SaaS CRM in their enterprises. The bulletin also highlights that a majority of SaaS CRM deals are done direct via face-to-face interaction with an account manager from the vendor, while online sales was the second most popular channel.
“Vendor strategy in the region has focused primarily on reaching out to customers directly, however, that severely restricts vendors’ ability to reach a wider base of customers,” said Michael Barnes, vice president - software, Springboard Research. “Existing vendor resource constraints, combined with the size and complexity of the APEJ market, make it imperative for SaaS CRM vendors to leverage channel partners, who will not only be able to tap a wider base of customers, but can also play a significant role in ongoing customer support.”
The SaaS CRM market is dominated by a single vendor, with 41 per cent of survey respondents using Salesforce.com. The bulletin notes that Salesforce.com’s strong market share is due to its long presence in the region combined with its dominance in the global market. The survey also found that 25 per cent of SaaS CRM subscribers indicated using local SaaS CRM providers. Some of the other SaaS CRM vendors mentioned repeatedly by name include Digital China, Gate 13, Microsoft, Netsuite, Siebel and SugarCRM.
