Transformative Thinking Fuels Indonesia ICT Proliferation in 2013
17 Dec 2012
Jakarta, December 17, 2012 – ICT will play a pivotal role in the transformation of the country's economy, and to aid it in achieving its coveted economic goals. As of November 2012, Indonesia continued to grow at an excellent rate mainly due to the influx of foreign direct investment (FDI) and a sustained domestic consumption.
In moving ahead to 2013, IDC expects technology to play an integral role within traditional sectors, as enterprise ICT adoption is expected to increase significantly within the coming year, spinning off spending into areas which will aid organizations to achieve its business goals.
"The economic year that was, and the technological year that will be, best sums up IDC's thoughts on how Indonesia is transforming itself. As enterprises begin finding their footing amidst the influx of FDI, IDC expects IT spending in the country to achieve US$15.8 billion by the end of 2013 collectively driven by a rise in enterprise ICT spending," says Sudev Bangah, Head of Indonesia Operations, IDC Indonesia.
Drawing from the latest IDC research and internal brainstorming sessions amongst IDC's region and country analysts, the following are the top 10 ICT predictions in 2013 for Indonesia.
1. Continued Spending on Infrastructure Will Drive Vertical ICT Spending
Discussions on the modernization and the building of infrastructure in Indonesia have been on the lips of many for several years. Many analysts have argued that Indonesia's incapacity may be self-inflicted in years to come, should infrastructure spending not match the direct investments.
In recent time, some analysts have pointed towards signs of a change in the coming year as the government recognized the need to continue to build and maintain investor confidence. With majority of FDI influx moving into traditional sectors of Construction and Manufacturing, IDC is optimistic that major infrastructure projects are set for take-off in the coming year, which will continue its inadvertent impact on the ICT industry.
2. Mobile Broadband Will Be a Key Centerpiece of Heightened ICT Utilization
It is no secret that the current proliferation of broadband is correlated with the rise of consumption of mobile devices in the country. In an information hungry, and community based society such as Indonesia, the need for connectivity to feed into the "bareng" mentality is pivotal towards an average Indonesia's lifestyle.
With that said, the total broadband market is anticipated to grow at a Compound Annual Growth Rate (CAGR) of 55% till 2016 driven significantly by the anticipated expansion of coverage by mobile operators, the declining price of USB modems/dongles and mobile devices, as well as the provision of more affordable broadband packages to consumers.
3. The "Start-Up" Movement Will Be the Foundation of a Budding ICT Ecosystem
The ultimate goal of a budding advanced information society is a creation of a viable ecosystem, where inter-dependence becomes the lynchpin of collectives success within the industry.
In recent time, local tech startups in Indonesia have garnered some attention from global investors who are looking at tapping on the local market. Local conglomerates have also been making the news in terms of their interest in technology based start-ups. The search for the "next big thing" has essentially be driven by a host of entrepreneurs attached to large local companies
4. Cloud Computing - Moving from Awareness to Understanding
Within the context of 2011 and 2012, the cloud "movement" has been greeted with both interest and apprehension as organizations continue to look towards a tangible case study or ROI when discussing this "concept".
The activity in the past year on Cloud Computing in Indonesia has been fairly significant, however, the depth of understanding on the actual benefits of it to the organization seems lost. IDC's 2012 Continuum Survey of Indonesia end-users showcased that more than 25% of those interviewed are going to increase their utilization and spending on Cloud Computing – however, this remains to be seen as to the maturity of the utilization.
5. Bring-Your-Own-Device (BYOD) Discussions Will Occur Blurring the Lines between Consumer and Enterprise Device Consumptions
The term "Bring Your Own Device" (BYOD) has captivated an audience in Indonesia, with the simplistic understanding that BYOD consist of a consumer bringing forth his own personal device for utilization within the workplace.
While PC adoption within the enterprise segment rose by close to 3% in third quarter of 2012, however, IDC's best estimates showcases a 80% consumer adoption, in comparison to a 20% enterprise adoption. Indonesia end-users showcased that more than 52% of those interviewed plan to increase mobility within their workplace, with BYOD as a consideration, as 44% of those interviewed are looking at suitable hardware to be integrated within their enterprise.
6. Hyper-Competition in Tier 1 Cities Will Motivate PC Vendors to Seek Opportunities Elsewhere
As competition begins to heighten in urban West Indonesia, and the key differentiators between vendors begin to diminish, IDC predicts that PC vendors will be placing a concerted effort in expanding their business portfolio towards tier 2 and tier 3 cities, as well as those main cities outside the Java islands.
With a rising middle income group in Indonesia, which has been ear-marked as their target consumers, IDC acknowledges that movements from vendors this year has suggested that beginnings of an aggressive move outside of Java, to capitalize on consumers who are ready to purchase their first PC.
7. OS Wars - The "Clear Winner" is Not So "Clear" in the Battle for Mobile Device Supremacy
The year 2012 was an exciting year for the mobile phone market, with many positives which reverberated across the entire industry, spelling a huge paradigm shift, which was driven by a changing lifestyle, rise of middle income earners, enterprise integration and progression towards a knowledge hungry society.
The evidence from Quarter 3 2012 alone was enough for IDC to remain terrifically optimistic over a country with a vast population, with many who are yet to own their first mobile device, and what more a smart phone. The ever changing and hyper-competitive phone market has benefitted the consumers in a large way, with abundant of choices of brands and devices, with smart phones starting as low as US$40 dollars.
8. Data Center Services Demand Will Heighten as Traditional Sectors Begin Seeing Transformative Value
IDC has found that the nascent shape of the industry today, presents a credible opportunity for tomorrow – leaving many verticals and industries in the country as "untapped", and the needs for awareness and education on the potential it can bring to the company is required. IDC's 2012 Continuum survey showed that 32% of Indonesian enterprises interviewed were looking at efficiencies and reducing the cost of their current IT infrastructure. The idea of moving from a CaPex to OpEx model is still attractive for many enterprises, which has left Data Center services as something of an exploratory component for them moving into 2013.
9. CIO Transformation: Less Talk, More Dabble
In 2013, IDC expects the CIOs to take a larger stand in the IT making decisions, and further shifts of IT expenditure to be removed from the reigns of the CFO. There will be more collaboration between the CIOs and LoB managers, and further discussions on social media as a channel, mobility as a tool, cloud for efficiency, and data analytics for intelligence will come into their minds more often than not.
10. East Indonesia Conquest - Setting the Stage for Future Proliferation
As business at this juncture still centers around West Indonesia, IDC expects in vendors in 2013 to begin expanding their mindshare in East Indonesia so as to be top of mind vendors when the need for service acquisition were to occur in the future. IDC expects global vendors to continue to understand and look into expansion plans with both national level and regional Sis, while national level SIs will look towards supporting locally and penetrate verticals specific to that part of the region.
For more information about the research or to purchase this data, please contact Sudev Bangah +62 813-1028-7324 or email@example.com . To set up an interview with Sudev Bangah, please contact Agita Saraswati at +62-21 520-3496 or firstname.lastname@example.org.
About IDC’s Predictions
IDC’s annual Predictions in APEJ draws upon the latest IDC research and a worldwide brainstorming exercise among IDC’s 1000+ analysts. This was followed by an extensive regional review to weigh in on key industry events, user trends, vendor strategies and economic measures that promises to uniquely define the technology trends that would impact and drive the market in APEJ for 2013. Across the globe, following the release of IDC’s global top ten predictions, IDC’s geographic, technology and industry teams will be releasing their own specific predictions in the coming months.
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 48 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting http://www.idc.com.
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