SaaS in China: An Ecosystem In Flux
July 16, 2008
Software as a service (SaaS)
is transforming the way software value is realized. Vendors are able to
benefit from an ongoing revenue stream through periodic service charges,
while customers can reduce up front license fees and hardware costs.
In 2008, SaaS has had
further development in China, as many vendors have embraced the model,
realizing revenues and profit. Chinese users have strengthened their
understanding of SaaS through vendor marketing and the media.
The SaaS ecosystem is
still in flux.
In China, the SaaS
ecosystem includes SaaS application service providers, software vendors,
hardware vendors, system integrators, Internet operators, telecom operators,
IT channels, and users. This ecosystem is still in its embryonic stage, as
players are still defining their roles and own SaaS models within the
For example, many players
are pursuing their own SaaS initiatives. Trading website Alibaba offers SaaS
applications targeted towards SMEs. Digital China has launched an SaaS
platform. China Telecom has launched its BizNavigator website. Governmental
entities also have their own SaaS application, such as the Ministry of
Commerceís International Trade and Economic Affairs.
Software vendors also have
their own vision of SaaS, including those from eAbax, Kingdee, Microsoft,
Oracle, and UFIDA to name a few.
Vendors form varying
degrees of partnerships to facilitate or support the SaaS model. IBM and
Lehman Brothers have stakes in Kingdee; IBM also partners with MainOne.
Softbank BB and Digital China have a joint venture to launch their SaaS
platform. Alisoft actively seeks partnerships with multinational software
vendors to deliver SaaS.
Chinaís small and medium
enterprises are the primary targets for SaaS, given low upfront costs and
pay-as-you go model of SaaS. Resource-rich large enterprises are typically
not the target for SaaS in China.
However, users are
concerned with vendors, or the ecosystemís, ability to deliver services on a
continual and stable basis. Data security and storage by various vendors is
also concern, given a lack of standards or practices.
For more information
contact us for these and
other China-related data, information and products.
Unless otherwise specified,
all information provided is sourced from CCID Consulting.