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May 2018 - Market Presentation - Doc # AP43839318

2H17 Country Report on IT Services - Indonesia

By: Meily LisdiyantiMarket Analyst

On-line Presentation

Abstract

This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in Indonesia from July to December 2017 (2H17). It covers the market size movements and growth trends in each of the macromarkets (i.e., project-oriented, outsourcing, and support and training services) as well as the key industries such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of large global and local IT services providers in the market.

The data and insights within this presentation are part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.

Indonesia reported that its GDP growth rate for 2017 was 5.05%, slightly higher than 2016's growth rate of 5.02%. This is in line with a recovery in global economic growth in 2017 driven by both developed and developing countries. The large amount of investments in the country concentrated in several sectors such as construction, government, and resources. The investment in these sectors led to increasing demand for IT services such as hardware and software deployment, IT outsourcing, and other professional services.

Banking, manufacturing, and retail continue to be the fastest-growing and mature industries in Indonesia. In the banking sector, Indonesia's fintech ecosystem has attracted global players such as Google, Alibaba, and Tencent to take part in fintech development as a player or investor. IDC has witnessed the entry of new and nontraditional vendors into financial services. Fintech start-up companies in the "Payment and Lending" category dominate the overall Indonesia fintech landscape in terms of maturity level, followed by marketplace, wealth management, company solutions, and use of accounting-based software providers.

IT outsourcing is expected to grow quickly in Indonesia, given the emphasis on the development of an organization's core business. More mature companies have started to identify the gap between business and ICT initiatives, that can be bridged by working with IT services providers. In addition, IT outsourcing services will be driven by demand for datacenter and systems/infrastructure management. Thus, digital transformation and the focus on developing an organization's core business, will lead to the acceleration of IT outsourcing's growth in Indonesia.

Managed services such as endpoint management, application management, and IT outsourcing are forecast to experience a high level of growth. Furthermore, a growing interest among Indonesian enterprises in adopting an opex-based business model, coupled with greater demand for digitalization, will lead to an increasing growth for managed services.


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