SaaS provides nearly half of Asia-Pacific's CRM

Customer relationship management solutions provided on a software-as-a-service (SaaS) basis now represent 48 per cent of the growing CRM market in the Asia-Pacific region, excluding Japan, according to global IT-market research firm Springboard Research.

Customer relationship management is the process by which a company tracks and organises contacts with its current and prospective customers.

Springboard's latest bulletin, "SaaS CRM in Asia-Pacific: Strong Growth Despite Market Concerns," pegs the SaaS-based CRM market at US$183 million (Bt6.28 billion) at the end of 2008 and forecasts that it will reach $570 million by 2012.

A Springboard survey of 296 SaaS users in the Asia-Pacific region confirmed that CRM was their top priority, with 40 per cent of potential buyers indicating a preference to invest in CRM in the next 12 months. The demand for SaaS-based CRM is highest in Australia and New Zealand, with 61 per cent of potential buyers citing purchase plans in the next 12 months, followed by India and the Asean region.

"SaaS-based CRM will remain one of the fastest growing markets in the region, as CRM penetration is still relatively low," said Springboard Research's senior manager of emerging software, Balaka Baruah Aggarwal.

"As organisations seek to better manage and ultimately reduce upfront IT-related capital expenditure, we expect SaaS-related spending to become a far larger percentage of total software spending, thereby ensuring strong ongoing growth," Aggarwal said.

The bulletin confirms that customer relationship management is now the most frequently used on-demand application after e-mail. Twenty-nine per cent of all respondents use SaaS-based CRM in their enterprises. The bulletin says a majority of SaaS-based CRM deals are done in direct face-to-face interaction with an account manager from the vendor, while online sales are the second most-popular channel.

"Vendor strategy in the region has focused primarily on reaching out to customers directly. Existing vendor resource constraints, combined with the size and complexity of the Asia-Pacific excluding Japan market, make it imperative for SaaS-based CRM vendors to use channel partners who will not only be able to tap a wider base of customers, but can also play a significant role in ongoing customer support," said Springboard's vice president for software at research, Michael Barnes.

Furthermore, the SaaS-based CRM market is dominated by a single vendor, with 41 per cent of survey respondents using Salesforce.com. The bulletin notes that Salesforce.com's strong market share is due to its long presence in the region combined with its dominance in the global market. 

The survey also found that 25 per cent of SaaS-based CRM subscribers used local SaaS providers. Some other SaaS-based CRM vendors mentioned repeatedly included Digital China, Gate 13, Microsoft, Netsuite, Siebel and SugarCRM.