32% of Indian SaaS adopters replace on-premise applications

Low maintenance and ease of use drive adoption of Software as a Service (SaaS) applications in India. SaaS adoption expected to grow over next 24 months.

According to the latest "Software-as-a-Service in India 2009/2010" report from Springboard Research, Software as a Service (SaaS) applications are gaining acceptance in India, with 32% of SaaS adopters replacing an on-premise application in 2009-10. The survey also reveals that 22% of organizations using an on-premise application have chosen to adopt the same application's SaaS version in another geography or department within the organization.  

Springboard estimates that the Indian SaaS market, valued at US$105 million in 2009, will be worth US$352 million by 2012. It's likely to register a growth of 60% CAGR from 2008 to 2012. The bulletin also discloses that India is the fastest growing SaaS market in Asia Pacific. The insights in the research bulletin are gained from a survey of 121 CIOs and IT managers of large, medium and small enterprises in India.

According to the report, zero or low maintenance is one of the major reasons for SaaS adoption in India, followed by ease of use. Among SaaS vendors, Salesforce.com, Citrix Online and Cisco WebEx have a strong hold over the market. The report observes that SaaS has been adopted by enterprises within verticals like power, infrastructure, contact centers, banking and technology.

Among the respondents who did quantify SaaS-related savings, email had an astonishing 127% return on investment.

"The momentum generated by vendor activity, participation by telecom companies as partners, and the hype around cloud computing will help SaaS proliferate rapidly over the next 18-24 months in top-tier cities and secondary places," says Balaka Baruah Aggarwal, the senior research manager for emerging software at Springboard Research. "The recessionary conditions represent a significant opportunity for vendors to market the low TCO associated with SaaS, as they attempt to migrate users from on premise software applications, as well as sell to first time IT users," adds Michael Barnes, the vice president of software research at Springboard Research.

In terms of satisfaction, SaaS scored an average of 8 on a 10 point scale. Among applications, email scored the highest with 9.5, while ERP generated a comparatively low level of satisfaction at 7.6. Among the respondents who did quantify SaaS-related savings, email had an astonishing 127% return on investment.

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