At a time when Indonesia’s ICT spending for 2020 is expected to decline by 7.1% as opposed to the 7.5% growth expected before the COVID-19 outbreak, mobility and cloud technologies are set to present opportunities for vendors, says GlobalData.
An analysis of GlobalData’s Market Opportunity Forecasts Model reveals that the COVID-19 outbreak will lead to a decrease in ICT spending from last year across almost all segments of the market.
Spending on hardware is expected to fall by 7.7% as against the growth of 9.9% in 2019 and the projected growth of 8.3% before the COVID-19 outbreak.
Kaipa Sai Shashank, Senior Technology Analyst and GlobalData comments: “Enterprises in Indonesia have been deferring hardware purchases as an initial response to the economic uncertainty owing to the pandemic. With the enterprises now having moved onto the remote working phase, all capital expenditures are being re-evaluated, leading to decreased hardware spending in the domestic market in Indonesia.”
The demand for software will also decrease in 2020 with enterprises delaying the roll-out of applications this year. The market for enterprise social networking and collaboration platforms, however, is set to increase by 31.3% for 2020 owing to the demand for collaboration due to remote working.
The market for ICT services too is set to fall in Indonesia, with organisations pausing their project-oriented services until business visibility improves. In addition, spending on managed and support services is set to decline with enterprises holding these off amidst the financial uncertainty.
Public cloud market comprising of SaaS, PaaS and SaaS will occupy a significant share of the cloud computing market in Indonesia in 2020, with the market expected to grow by 3.3% over 2019.
Mr Shashank explains: “Enterprises in Indonesia are leveraging public cloud services to effectively manage their processes such as data-recovery and a safe backup system.”
In terms of sector impact of the COVID-19 pandemic, the government sector in Indonesia will be the least impacted, with ICT spending in the sector projected to decrease by 0.8% in 2020. Similarly, ICT spending in the healthcare and communications sectors are expected to decline marginally by 1.0% and 1.4%, respectively
Mr Shashank concludes: “To ensure business continuity and minimise losses, organizations in Indonesia have adopted a cloud-first strategy by shifting their ICT infrastructure to the cloud, which has increased their focus on adopting cloud-based solutions. The new workplace models adopted due to the COVID-19 outbreak have also increased demand for collaboration tools in the country.
“For ICT vendors, mobility and cloud technologies will continue to be an opportunity in the near term, especially from SMEs, as their digital transformation is relatively cost-effective compared to large enterprises, which run on legacy ICT infrastructures.”
