SaaS ERP market to grow to US$193 million by 2012 in Asia Pacific

SaaS ERP market to grow to US$193 million by 2012 in Asia Pacific

Springboard Research survey finds SaaS ERP has the highest penetration within the manufacturing sector.

The market for software-as-a-service (SaaS)-based enterprise resource planning (ERP) in the Asia Pacific (excluding Japan) is estimated to grow from US$35 million in 2008 to US$193 million by 2012, according to Springboard Research. Coupled with the low level of on-premise ERP applications penetration, the region is tipped to experience faster growth especially in the markets of China and India, pointed out Balaka Baruah Aggarwal, senior market analyst - emerging software at Springboard. The numbers were from the research firm's bulletin titled 'SaaS ERP in Asia Pacific: An Overview'.

"The increasing availability and reliability of broadband across the region and the overall dynamism of the emerging markets will also drive increased demand," added Aggarwal.

Springboard's survey found that SaaS ERP currently has the highest penetration within the manufacturing segment. China showed the highest levels of SaaS ERP adoption within the region.

However, CIOs in the region would generally find SaaS ERP systems immature. "So far, SaaS ERP has been less popular in part because the SaaS mode does not allow much flexibility for customisation," said Michael Barnes, vice president - software at Springboard.

The situation could change as the vendors continue to improve their offerings, he added. "They have the opportunity to improve adoption, especially with organisations implementing ERP for the first time," he said.

Local players

Springboard identified that growth in the region's SaaS ERP market is also constrained by the limited presence of large, well-established SaaS ERP vendors and the lack of mature solutions that cater to the region's specific needs.

So far, Netsuite is the only SaaS ERP provider with a region-wide footprint, said Springboard. It has a strong presence in Australia and Southeast Asia, as well as an ongoing expansion in high growth markets such as India.

Other leading on-demand ERP providers are more country-focused with players such as Ramco leading the market in India. In China, local ERP player Kingdee has started offering specific modules such as accounting and supply chain in the on-demand mode, and will eventually provide a full-fledged SaaS-based ERP suite.

Many US-based SaaS ERP providers are currently exploring the potential within the Asia Pacific market, but in contrast to other SaaS applications, Springboard is expecting more leadership coming from the local players.

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Tags cloud computingSoftware as a service

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