'India to be fastest growing mkt for Software as a Service'

India is expected to be the fastest growing market for Software as a Service (SaaS) in the Asia-Pacific region, according to Springboard Research, a global IT research agency.

The report says there is strong growth in adoption levels in India and across Asia for SaaS in 2005, and even brighter prospects ahead. India saw revenues increase over 53 per cent to $7 million in 2005, and the market is expected to grow to $48 million by 2008, representing the fastest growth in the region.

SaaS is an emerging software delivery model in which application software is delivered remotely through a subscription-based fee rather than being sold for perpetual use. The users do not buy the license for the software, but only a right to use it. SaaS is also referred to as On-Demand Software and On-Demand Application.

"The SaaS market is receiving considerable focus from software vendors operating in various spheres of the industry," noted Dane Anderson, research vice president at Springboard Research.

"Global software giants, local ISVs and emerging on-demand software vendors all have a healthy dose of respect for the power of SaaS to disrupt the competitive frameworks of the software industry in the future."

A survey of Indian Small and Medium-sized Businesses (SMBs) identified cost benefits as the primary driver for SaaS adoption, but ease of use and business benefits were also cited as important market accelerators.

Indian SMBs have the highest level of awareness of SaaS in Asia. However, SaaS has not made much headway among them largely because of low penetration of software application usage in this market segment.

The mismatch between high SaaS awareness and low penetration is also because most of the SaaS vendors are not present in India and large traditional vendors dominate the Indian enterprise application software market.