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Government Cloud, Technology

Govt lags private sector SaaS adoption in Asia

By Kelly Ng | 23 June 2009

While Asia Pacific’s Software-as-a-Service (SaaS) market is expected to reach a high of US$298 million in 2009, little of this growth is expected to come from the government sector.

The public sector has a low SaaS adoption rate of 20 per cent compared to other verticals, according to an IDC survey.

Governments are slower adopters because of “prior investment in IT infrastructure and bureaucracy,” explained Sheila Lam, Senior Market Analyst, Enterprise Applications Research at IDC. “They would fully use the existing IT infrastructure before making a shift into a different software delivery model.”

However, Lam expects the lag to be temporary. Forty-nine per cent of governments have hinted at plans to subscribe to SaaS in the near future.

IDC predicts that the SaaS market will increase by 18 per cent over 2008 levels despite the challenging economic outlook.

Australia will contribute 45 per cent of the overall market, followed by China with 29 per cent.

Enterprises are looking to SaaS as they cope with increasing IT budget constraints. Instead of huge hardware and software investments, SaaS is a cost-efficient alternative with a flexible subscription fee.

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