Springboard Research has announced results from its latest research covering the Software-as-a-Service (SaaS) Customer Relationship Management (CRM) market in Asia (excluding Japan). Springboard estimates that the SaaS CRM market will grow at a compound annual growth rate (CAGR) of 61% between 2006 and 2010. Springboard pegged the SaaS CRM market in Asia at $69 million in 2006, and expects it to reach $460 million by 2010.

India, Australia, Singapore, Hong Kong, Korea, and China are the key SaaS CRM markets in Asia Pacific.

“SaaS CRM has gained acceptance in Asia’s business mainstream and the coming year will see higher adoption rates as larger enterprises opt for SaaS CRM,” said Balaka Baruah Aggarwal, senior manager for Emerging Software for Springboard Research. “At the same time, the market is set to witness unprecedented growth in the SME sector as a spate of new initiatives by vendors such as SAP, Microsoft, and Oracle promote their CRM offerings,” added Aggarwal.

Increased adoption among larger enterprises will be the turning point in the uptake of SaaS CRM and will bring the model a legitimacy that it did not have when it was mainly used by small and medium enterprises (SMEs). As traditional software players step up their activities by offering proprietary SaaS CRM applications, large enterprises will be lured to the market, creating an entirely new base of customers who had previously been fence sitters. Springboard Research also forecasts that the SaaS CRM market is set for consolidation as the number of players increase and bigger players make serious forays into the marketplace.

Springboard currently estimates that SaaS CRM represents the largest segment of SaaS application expenditures in Asia at 45%, followed by collaboration, ERP/PLM/SCM applications, and human resource applications.

“Springboard Research believes that a substantial portion of the growth in Asia Pacific’s SaaS CRM market will come from the SME segment. We expect SMEs in Asia Pacific to go for simpler CRM solutions that are not too complex,” said Aggarwal. “This will drive CRM vendors, especially the traditional licensed software companies, to sell stripped-down versions of on-premise offerings or to develop SME-specific applications for distribution via the SaaS model.”