May 28, 2009




SaaS in Asia Pacific
Opportunities for ISVs, SIs and VARs


SaaS Asia 2009


 Dane Anderson | CEO and EVP...
SaaS and Cloud Computing
SaaS – a model of software deployment whereby a provider licenses an
application to customers for...
SaaS Market Opportunity in APEJ

  $2,500                                               90%
                              ...
SaaS Market Drivers
 Q: What was your primary reason for adopting SaaS? (N=530)


             Ease of use & management   ...
Why Cloud Computing?
 Focus on the forest….

                          Business is interested in processes and
          ...
…Why Now?

             Virtualization
               •   Driving data centre improvements – lower
                   cos...
SaaS Market Inhibitors
 Q: What was your primary reason for adopting SaaS? (N=530)


             Ease of use & management...
SaaS Market Size (US$M) – 2009
 Total = US$785 Million


                                                    Others
      ...
Competitive Dynamics in Asia

•   Salesforce.com is the clear market leader with over 20% market share
•   Webex ranks sec...
The SaaS Road Ahead
Predictions
•   SaaS offerings will continue to blossom across all application market
    segments and...
How does the channel fit in?



                               11
SaaS purchase channels are less “virtual”
 than generally realized
 Q: From which channel did you buy your SaaS applicatio...
SaaS End-Users: Channel Preferences
  Q: Is the involvement of a reseller/agent helpful/necessary during a SaaS purchase? ...
SaaS Channel Observations (1/2)

•   Traditional resellers and on-premise vendors are having a very
    difficult time sel...
SaaS Channel Observations (2/2)

•   Our research suggests SIs are more able to transition to a SaaS
    model than tradit...
Boot Camp Handoff

•   SaaS/Cloud Computing is not a fad; it is a fundamental market
    shift with staying power

• Under...
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SaaS In Asia Pacific- Opportunities For Local Partners

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This is the Springboard Research presentation from our SaaS & Cloud Partner Bootcamp in May 2009.

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  • On-Demand approaches have evolved into a compelling business caseMulti-tenancy enables a leveraged approach and ensures that economies of scale are possibleVirtualization can even make single tenancy a potentially viable option (as long as the business mandates timely customer adoption of patches and software updates)ASPs and previous On-Demand approaches did not allow for economies of scale and therefore were not compelling from a business standpointIT infrastructure (software, hardware, networking) will continue to standardize and commoditize over timeInternal ‘ownership’ of this infrastructure is not a competitive imperative or even necessarily an advantage, certainly not for every scenarioThe more well-managed and efficient the infrastructure, the more invisible it should become to business ‘owners’ and users, who only notice the IT infrastructure when something goes wrongThis reality creates a ready market for ‘hosted infrastructure’ once performance and privacy concerns are overcomeCloud infrastructure with better managed and more predictable and more cost-effective SLA’s are a logical choice for SMBs but also for many large organizations, at least for a subset of their application needsGrowth will come at the expense of on-premise IT infrastructure
  • The approach has certainly been tried before – ASPs, On-Demand, even time-sharing and service bureaus
  • SaaS In Asia Pacific- Opportunities For Local Partners

    1. 1. May 28, 2009 SaaS in Asia Pacific Opportunities for ISVs, SIs and VARs SaaS Asia 2009 Dane Anderson | CEO and EVP of Research
    2. 2. SaaS and Cloud Computing SaaS – a model of software deployment whereby a provider licenses an application to customers for use as a service on demand A collection of IT-enabled resources and capabilities that can be delivered via the internet as a  Services Vary service • Software as a Service (SaaS) • Platform as a Service (PaaS) • Infrastructure as a Service (IaaS)  Certain Characteristics are required • Web-based user access • Multi-tenancy and shareable resources • Massive scalability and dynamic resource allocation 2
    3. 3. SaaS Market Opportunity in APEJ $2,500 90%  SaaS growth will be 3-5x on- 80% premise SW growth $2,000 70%  “The Cloud” provides additional boost to the SaaS model 60% $1,500  CRM & collaboration leads, but 50% SaaS apps are blossoming $1,000 40%  SaaS is often bought and installed 30% by business users rather than IT departments $500 20%  Traditional vendors 10% (SAP, Oracle, Microsoft) have $0 0% stumbled 2008 2009 2010 2011 2012  The channel is a critical and uncertain issue IT Market Size SaaS Growth SW Growth Source: Springboard Research, 5/2009 3
    4. 4. SaaS Market Drivers Q: What was your primary reason for adopting SaaS? (N=530) Ease of use & management 29% Lower cost of ownership 23% Quick & easy to deploy 13% Adds value for my business 10% Business demands 9% Scalability 8% Zero/Low maintenance 6% Other reasons 3% 0% 10% 20% 30% 40% Source: Springboard Research, 5/2009 4
    5. 5. Why Cloud Computing? Focus on the forest….  Business is interested in processes and information • Not technology, applications or infrastructure  IT is a means to an end, not an end in itself • The ‘service’ being consumed is ultimately all that matters • Everything else is simply part of the plumbing  From a business standpoint, IT has no inherent value at all • All value lies in how effectively IT is applied to help meet business objectives ….not the trees!!! 5
    6. 6. …Why Now?  Virtualization • Driving data centre improvements – lower costs, improved service • Focusing attention on ‘economies of scale’ – the value of shared resources  Open Standards • Rich Internet Applications and Web 2.0 standards – enhanced usability • Improved interoperability and applications as a collection of ‘services’  Internet • Available, reliable, and affordable broadband 6
    7. 7. SaaS Market Inhibitors Q: What was your primary reason for adopting SaaS? (N=530) Ease of use & management 29% Lower cost of ownership 23% Quick & easy to deploy 13% Adds value for my business 10% Business demands 9% Scalability 8% Zero/Low maintenance 6% Other reasons 3% 0% 10% 20% 30% 40% Source: Springboard Research, 5/2009 7
    8. 8. SaaS Market Size (US$M) – 2009 Total = US$785 Million Others $160 Others 20% S'pore $130 CRM $50 17% Australia $260 6% $290 HR 33% 37% $40 India 5% $105 ERP/PLM 13% /SCM Korea China Content $100 $110 $55 & Collab. 13% 14% 7% $270 35% Source: Springboard Research, 5/2009 8
    9. 9. Competitive Dynamics in Asia • Salesforce.com is the clear market leader with over 20% market share • Webex ranks second with roughly 10% market share • RightNow, Oracle and Netsuite round out the top five, each with market shares between 3-6% • Other international brands and local players account for approximately 50% of the market • Oracle, SAP, Microsoft and Symantec have announced or launched new SaaS offerings and strategies over the past 6-9 months — Struggling to balance traditional on-premise businesses with SaaS offerings — Entire business models and processes are challenged by this dynamic — Full intentions and commitment – especially in Asia – are very unclear; however, these players could be sleeping giants that shake-up the market in the long term 9
    10. 10. The SaaS Road Ahead Predictions • SaaS offerings will continue to blossom across all application market segments and become a more important component of every IT market • Pricing will eventually move away from pure user-per-month models to more precise fees for usage • Cloud Computing will strengthen and broaden SaaS; service level agreements and “auditable” services will make for more robust solutions • Business users will remain key buyers of SaaS/Cloud Computing and much more so than they are for current IT solutions • The success of SaaS/Cloud Computing will boost the “productization” or “industrialization” of IT services • Like the PC and Internet waves before it, SaaS/Cloud Computing will usher in a new competitive framework for the IT industry • SaaS/Cloud Computing will be a highly disruptive dynamic for the channel 10
    11. 11. How does the channel fit in? 11
    12. 12. SaaS purchase channels are less “virtual” than generally realized Q: From which channel did you buy your SaaS applications? (N=530)  F2F interactions accounted for F2F Direct w/ Vendor 40% 58% of APAC SaaS purchases in 2008 Online (Vendor/Reseller) 28%  Online/phone purchases accounted for 42%  Marketing and demand-pull are F2F Interaction w/Reseller 18% critical for SaaS success currently Phone (Direct w/ Vendor) 10% Phone (Local Reseller) 4% 0% 10% 20% 30% 40% 50% Source: Springboard Research, 5/2009 12
    13. 13. SaaS End-Users: Channel Preferences Q: Is the involvement of a reseller/agent helpful/necessary during a SaaS purchase? In which area would the involvement of a reseller/agent benefit you the most? (N=530) Perceived Reseller Value Valued Reseller Role Comfort Factor During F2F 29% Interaction Reseller/Agent 55% Necessary During Explaining the Offering 18% SaaSPurchase 45% Training 17% Integration 8% 25% Reseller/Agent Helpful During SaaS Purchase Installation 5% 75% Other 23% No Yes Source: Springboard Research, 5/2009 13
    14. 14. SaaS Channel Observations (1/2) • Traditional resellers and on-premise vendors are having a very difficult time selling both on-premise and SaaS offerings at the same time ₋ Sales teams, incentive structures and business models do not easily lend themselves to easy or effective SaaS rollouts • SaaS vendors and resellers need to cross a chasm of supporting heavy upfront costs before healthy annuities can support them – this can last at least 2 years • Distribution models are evolving and the environment is in flux ₋ Online SaaS Marketplaces – WebCentral, SaaS Central, etc. ₋ Pure-play SaaS Channel Consortiums – NexGen, OnDemand Asia ₋ Telcos & ASPs ₋ SaaS Platform Ecosystems – AppExchange (Salesforce), SuiteFlex, etc. 14
    15. 15. SaaS Channel Observations (2/2) • Our research suggests SIs are more able to transition to a SaaS model than traditional resellers and VARs ₋ Greater predictability and lessened dependence on people is a major draw ₋ Moreover, business models less dependent on “cash turns” makes the transition for SIs easier • A strong sales and marketing machine is required for broad acceptance ₋ Sometimes partnering with a larger provider can change fortunes overnight • Many partners are very worried that selling SaaS solutions will eventually give their customers away to vendors 15
    16. 16. Boot Camp Handoff • SaaS/Cloud Computing is not a fad; it is a fundamental market shift with staying power • Understanding how to leverage SaaS/Cloud Computing – or at least how to manage it – is a new channel imperative • Springboard Research does not claim to have all the answers; today is all about: — Putting the issues on the table — Getting some answers — Providing exposure to key lessons, best practices and leaders — An active and lively discussion 16

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