Story image

SaaS revenue on the up

01 May 12

Gartner is predicting software as a service (SaaS) revenue will grow 17.9% globally this year, to reach $14.5 billion, and while the research company says New Zealand, as a mature market, won’t see quite those increases, it’s still predicting increasing SaaS adoption here.

Globally, Gartner says SaaS-based delivery will experience healthy growth through 2015, when worldwide revenue is projected to reach $22.1 billion.

Yanna Dharmasthira, Gartner research director, says the use of SaaS in New Zealand is more evenly spread out in different types of applications, in contrast to emerging countries. “Although the intention to increase on new SaaSinvestment in New Zealand is considered relatively less aggressive, compared to emerging countries, the users in ANZ tend to have fewer issues in their SaaS deployment.

SaaS revenue in Asia/Pacific is on pace to reach $934.1 million in 2012, up from $730.9 million in 2011. Gartnersays overall SaaS adoption in the region has been fragmented, with Asia Pacific being a combination of mature markets, such as New Zealand, Australia, Hong Kong, Singapore, South Korea and Taiwan, and emerging markets, including China, India, Malaysia, Thailand, Indonesia, Vietnam and the Philippines. “SaaS financial (accounting) applications are most popular, particularly in China and India. The next highest SaaS usage is for ERP functions such as expense management and employee performance management, followed by office suites, email and the CRM sales function.

No New Zealand breakdown on SaaS revenue was available. Dharmasthira says in terms of overall software spending, which includes on-premise license, maintenance and subscription, New Zealand usually contributes about 3% of the Asia Pacific (excluding Japan) software revenue, however that 3% share ‘should not be calculated as the SaaS share.

Gartner says longer than expected deployments are the top issue in Asia Pacific, compared to limited flexibility of customisation and limited integration to existing systems in North America and network instability in EMEA.

“Although New Zealand is considered one of the more mature markets in terms of SaaS adoption in the region, software vendors still offer hybrid selling approach to end users. This includes on-premise, SaaS, hosting or a combination of these options,” Dharmasthira says.