Springboard Research, a leading innovator in the IT Market Research industry, and Channel Enablers, a leading global channel consultancy, training, and solutions company, today announced the results from their latest Software as a Service (SaaS) in Asia research. The most recent data showed that while SaaS is growing very rapidly in Asia with increased adoption and awareness, the role of the traditional IT channel in this new ecosystem is still unclear.
“Up until now, the channel has been largely irrelevant to SaaS across Asia with close to 100% of end-users purchasing directly from the vendor,” said Greg Eckstein, Channel Enablers Vice President for Asia. “And although end-users see a role for the channel with SaaS, the areas they value are typically much less profitable for the channel,” Eckstein added.
Research also found that 73% of end-users perceived the role of the channel as “helpful,” with 68% of end-users further responding that the channel was “necessary” for SaaS. However, when looking at areas where end-users see the channel adding value (67% named “Training,” 55% indicated “Comfort via Face-to-Face Interaction”), they tended to be the areas of least interest to the channel. “Installation and Integration,” typically the highest profit areas for the channel, ranked lowest in this category with 48%, and 47%, respectively.
“SaaS has undergone a very substantial increase in awareness and adoption in the last 12 months,” said Dane Anderson, CEO & EVP of Research for Springboard Research. “Awareness jumped from 41% in 2006 to 61% in 2007, so SaaS is undoubtedly gaining traction in the market. With SaaS market revenues expected to grow 86% this year in Asia (excluding Japan), satisfaction levels for SaaS currently very high, and the increased interest by larger vendors like Microsoft and SAP, we expect SaaS to continue to gain adoption.”
“The channel is the key question – how can SaaS vendors and traditional software firms set up the best channel structure to reach more of the market in Asia? Some vendors like Netsuite, with its SuiteFlex program, have some interesting approaches to the channel, but overall it is still the early days of channel involvement,” Anderson continued.”
“Channel Enabler’s advice for IT vendors is to start their SaaS channel strategy with a blank sheet of paper and define what you want the channel to do in your SaaS model,” Eckstein added. “Using traditional routes to market will not work with this non-traditional, disruptive technology. How the channel derives value from up-front, conventional software license revenue is entirely different from what they are going to encounter in the SaaS world. IT vendors need to approach their go-to-market strategy from a fresh perspective and take a long, hard look at their selling and support processes to help reduce costs and better support the profit margins and revenue implications of SaaS.”
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