March 13, 2010SaaS spending by China's SMBs to double by 2013
SaaS spending by China's SMBs to double by 2013
By SearchSMBAsia Editors | Jun 26, 2009
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With the right infrastructure in place and a high Internet penetration rate, China small and medium businesses (SMBs or companies with less than 1,000 employees) will continue to deploy software-as-a-service (SaaS) at an estimated compound annual growth rate of 17.8% over the next five years, having already seen over $90 million invested on SaaS applications in 2008. This comes from a new survey by AMI-Partners.
According to AMI-Partners, about 30% of channel partners in China offer remote managed services and account for almost a third of the total SMB channel partner revenue of $17.5 billion.
AMI-Partners said that China SMBs are getting more comfortable with using the Internet for conducting business transactions, which will pave the way for SaaS growth. With SaaS, SMBs get cost efficiency and simplicity of management and also minimize the likelihood of system breakdown and repairs. While basic IT applications such as email and payroll are currently the key SaaS solutions used, high-value SaaS solutions such as financials, ERP and CRM adoption will gain momentum as SMBs become more mature and sophisticated in their usage of technology.
Despite fast growth, managed services are still in their early stages of adoption with a few hurdles that need to be overcome such as competition from retailers, maintaining customer satisfaction, perception that it requires considerable investment, low margins, lack of technical knowledge and training and the lack of capital resources.
Moving forward, managed services awareness among China SMBs, especially in this economic environment, will be driven by the message of customer retention, increasing revenues, simplifying operations, focusing on core business and staying competitive.
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