In this IDC study (which is a translation of the Japanese report IDC #J8380103) we present our analysis of the Japan SaaS market in 2007 as well as the forecasts up to 2012. Presently, the Japan SaaS market is attracting much attention amid the development of infrastructure technologies and the active efforts of vendors to provide SaaS services. As the Japan SaaS market expands, the technological barrier to entry is also lowered and user companies have also become less resistant to the idea of using SaaS. In the Japan market, the level of interest in SaaS has grown virtually to the point of being excessive. At the current point in time, the competition among vendors in this limited market is intensifying rapidly. An excess of vendors and services is a cause for concerns.

"It is important for SaaS vendors to provide prompt services and create partner ecosystems while implementing risk control," says Satoshi Matsumoto, research manager for IT services, IDC Japan.