Local vendors win in Asia SaaS market

The SaaS model puts local software firms on a par with larger vendors

Local companies and smaller vendors are holding their own against giant international corporations in Asia's market for software-as-a-service (SaaS), according to new research.

Despite the disparity in size, smaller firms and local vendors grabbed 54 per cent of the market from giants like WebEx and Salesforce.com during 2006 and 2007, Springboard Research discovered in a recent survey.

"The SaaS model has had a democratising effect on local software vendors and ISVs, putting them on a par with larger vendors in terms of reach and access to customers," said Balaka Baruah Aggarwal, a senior manager in charge of emerging software at Springboard Research.

In SaaS environments, software applications are accessed via the internet instead of running directly on client PCs.

SaaS vendors develop software and manage servers, and may also host the servers themselves. From the client's point of view, a SaaS application runs in a web browser in a similar way to services such as Gmail and Google Docs.

In Asia, widely-used SaaS applications include traditional office software, such as word processing, spreadsheets and email.

Other popular services include security/compliance applications, human resources and payroll/workforce management solutions.

Being internet-based is also helping small SaaS operators to break through traditional barriers to expansion.

"Riding on the wave of increased internet usage, small software providers with niche applications have not only tapped local markets, but have started expanding beyond national boundaries," Aggarwal said.

"Asia will see a few upstart software vendors emerge in the SaaS market as there is no dearth of developer talent in countries like India and China."