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

According to this bulletin, the market for SaaS-based ERP in Asia-Pacific (excluding Japan) is estimated to grow from $35 million in 2008 to $193 million by 2012. The market for SaaS-based ERP applications (together with SCM and PLM) contributes seven percent 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, Springboard Research. “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,” Aggarwal added.

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. As vendors improve the customization capabilities of their products, they have the opportunity to improve adoption, especially with organizations implementing ERP for the first time,” said Michael Barnes, VP—Software, Springboard Research.

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.

Many US-based SaaS ERP providers are currently exploring the potential within the Asia-Pacific market, but in contrast to other SaaS applications, Springboard reports seeing more leadership coming from the local players.

Springboard Research will also host 'SaaS Asia 2009: Ensuring Business Value in Uncertain Times', a targeted two-day event in Singapore on May 27 and 28, 2009. The focus of the event is on helping IT decision makers understand SaaS and cloud computing, and it will provide attendees with best practices from existing SaaS users and SaaS vendors alike.

The event will also provide a forum for discussing cloud computing and SaaS-related issues, opportunities and challenges with a select group of industry peers.