December 10, 2007, 12:01 PM — The Software-as-a-Service (SaaS) Customer Relationship Management (CRM) market
in Asia (excluding Japan) will grow at a compound annual growth rate of 61 percent
between 2006 and 2010, according to Springboard Research.
The research firm pegged the SaaS CRM market in Asia at US$69 million in 2006,
and expects it to reach US$460 million by 2010.
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 percent of all SaaS CRM sales generated in the region.
Springboard's senior manager for emerging software, Balaka Baruah Aggarwal,
said SaaS CRM has gained mainstream acceptance and higher adoption rates by
enterprise can be expected in the coming year.
"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," Aggarwal said.
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.
Aggarwal said as traditional software players step up their activities by offering
proprietary SaaS CRM applications, large enterprises will be lured to the market,
creating an entirely new base of customers who had previously been fence sitters.
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
"We currently estimate SaaS CRM represents the largest segment of SaaS
application expenditures in Asia at 45 percent, followed by collaboration, ERP/PLM/SCM
applications, and human resource applications," she said.
"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
"We expect SMEs in Asia Pacific to go for simpler CRM solutions that are
not too complex," Aggarwal said.
"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." Aggarwal
described SaaS as a disruptive innovation that has the potential to transform
the software industry.