China's SaaS market is expected to grow at 56% next year to reach $171 million in revenues by the end of 2010.
A report from Springboard Research showed that demand for SaaS will increase in the next two to three years and the growth rate will far exceed that of the traditional IT industry, including the on-premise software market.
Springboard's survey of Chinese enterprises indicated that three out of four respondents interviewed are already subscribing to SaaS solutions, while out of the remaining, more than half are likely to subscribe to SaaS in the next 12 months. Also, almost 100% of respondents in China reported being "aware" of the SaaS concept, compared to only 52% last year. In terms of vertical industries, SMBs in retail, logistics, manufacturing, services and circulation report higher SaaS adoption.
"The appeal and growth of SaaS in China are based on the advantages of SaaS applications compared to traditional software such as lower upfront costs, easier maintenance and quick roll-outs," said Devin Wang, business analyst for emerging software at Springboard Research. "We see aggressive demand for SaaS in China in the coming months, as corporate IT budgets continue to be under tighter scrutiny and enterprises look to hire fewer technical staff," he added.
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