Springboard in a study released in the middle of the year forecasted strong growth in adoption levels in India and across Asia for Software as a Service (SaaS) in 2005, and even brighter prospects ahead.

In India revenues increased over 53% to US$7 million in 2005, and the market is expected to grow to US$48 million by 2008.

Results from a survey of Indian Small and Medium-sized Businesses (SMBs)

• Cost benefit is the primary driver for SaaS adoption,
• Ease of use and business benefits were also cited as important market accelerators.
• Indian SMBs have the highest level of awareness of SaaS in Asia, but has the a low market prescense largely because of low penetration of software application usage in this market segment, also because most of the SaaS vendors are not present in India and large traditional vendors dominate the Indian enterprise application software market.

"The SaaS market is receiving considerable focus from software vendors operating in various spheres of the industry," noted Dane Anderson, Research Vice President at Springboard Research. "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."

But in an presentation by Forrester we have slide highlighting "What prevents organisations from considering SaaS" and the top reason seems to be COST, this data was as per the slide based on a survey of technology decision makers at United States SMB's in 2005. Chart Below:

Question: Cost is the driving factor for SaaS adoption in India, but is a hindering factor in the US?? Or have a i got something wrong, can somebody clarify?

Source: 1

Prashanth Rai