Asia Ramping SaaS to $300M in 2009, Profits Questionable

In another sign of continued SaaS customer acceptance, ZDNet Asia provided a summary of a new IDC report, countries included were Australia, China, India, Korea, and Singapore (note this excludes Japan). Overall, this SaaS market is expected to hit $300M in 2009, with Australia at $134M and China at $86M.

Surprisingly China wasn't higher, at least more than Australia, but another report from TMCNews summed it up as:

"What Chinese SaaS service providers are waiting for is the day when Chinese smaller businesses get into the habit of paying for SaaS service."

This coming from the frustration of only ~10% of registered users are paid users and many of the local software vendors (UFIDA, Kingdee, and Alisoft) are seeing their SaaS endeavors as a big money pit.

I think this though is a sign of any industry in its' infancy, where it just takes time for people to get used to something different, such as putting their company data on the web. This is also supported by the fact of their stated user base of ~300k, which of a total of 43M SMB, is still very early in any type of user adoption metric.