NEW DELHI, INDIA: SaaS ERP solutions are of major demand in Asia Pacific region, says Springboard Research, an IT Market Research industry.

A survey research revealed a substantial pent-up demand for SaaS-based ERP solutions, with 35 per cent of potential SaaS buyers indicating interest in procuring SaaS-based ERP in the next 12 months, said a press release.

The survey was conducted with 530 CIOs and IT decision makers in enterprises across Asia Pacific.

Springboard’s survey of SaaS users across the region also found that SaaS-based ERP is being used by 20 per cent of the respondents. These findings are reported in the latest Springboard Research bulletin, titled “SaaS ERP in Asia Pacific: An Overview”, the release said.

According to this bulletin, the market for SaaS based ERP in Asia Pacific (excluding Japan) is estimated to grow from US$35 million in 2008 to US$193 million by 2012. The market for SaaS-based ERP applications (together with SCM and PLM) contributes 7 per cent to the total SaaS market in the region.

“We expect this market to experience faster growth, given the relatively low current level of on-premise ERP application penetration in the region, particularly in the growth markets of China and India,” said Balaka Baruah Aggarwal, senior market Analyst - Emerging Software at Springboard Research.

He added that the increasing availability and reliability of broadband across the region and the overall dynamism of the emerging markets in the region will also drive increased demand.

Springboard’s survey also found that SaaS ERP currently has the highest penetration within the manufacturing segment. China showed the highest levels of SaaS ERP adoption within the region.

“So far, SaaS ERP has been less popular in part because the SaaS mode does not allow much flexibility for customization,” said Michael Barnes, VP - Software at Springboard Research. “As vendors continue improve the customization capabilities of their products, they have the opportunity to improve adoption, especially with organizations implementing ERP for the first time,” Barnes added.

According to Springboard’s research, growth in SaaS ERP market is also constrained by the limited presence of large, well-established SaaS ERP vendors in Asia and the lack of robust and mature solutions that cater to the specific needs of the market.

Netsuite is the only SaaS ERP provider with a region-wide footprint, with a strong presence in Australia and in the ASEAN region and an ongoing expansion in high growth markets like India.

Other leading on-demand ERP providers are more country focused with players like Ramco leading the market in India. In China, local ERP player Kingdee has started offering specific modules like accounting and supply chain in the on-demand mode, and will eventually be offering a full-fledged SaaS-based ERP suite, the release added.