The market for software as a service solutions is continuining to show strong growth in adoption levels across the Asia-Pacific region, a new study Springboard Research, said.

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 of 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,” Dane Anderson, research VP at Springboard Research said.

“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 Asian 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.

Springboard Research further said of the surveyed SMBs that had adopted SaaS, estimated savings ranged from 5-55% compared to the traditional licensed model, with the majority (58%) reporting estimated savings of between 20-30%.

Although SMBs represent the primary SaaS market in Asia today, a key study finding is that adoption is picking up in the large enterprise sector as well. Large enterprises are far less likely to leverage the SaaS model for core applications such as ERP, but for applications deemed less mission-critical and those on the edge of their infrastructures, SaaS is receiving considerable interest.

Customer Relationship Management (CRM) currently represents half of total SaaS revenue in Asia, followed by Web Conferencing and Collaboration and back-office applications, the research said.

Given the cultural and economic complexity and diversity of the Asia Pacific region, the adoption of SaaS is not uniform across the region.

Australia and New Zealand are closer to North America in terms of SaaS adoption trends, and Australia is the largest SaaS market in the region.

China and India are seen as countries with the greatest potential in the mid to long-term future, the study said.

Asian software vendors are slowly entering the SaaS marketplace, but North American vendors currently dominate the market. The top 5 vendors – Salesforce.com, WebEx, RightNow Technologies, Oracle and NetSuite – represent more than 50% of market revenues, and their dominance is likely to continue for the next.