Indonesia Information Technology Report Q1 2012 Asian PC leader Lenovo hopes to build on strong growth in 2011. In March 2012, Lenovo plans to establish an Indonesian subsidiary company to help manage its local business. In future Lenovo imports from China will be managed by the local subsidiary. Lenovo aims to increase its PC market share in Indonesia to around 10%, from 7.3% in Q311. The Q311 share in itself marked an improvement from an estimated 5.8% in Q211. In August 2011, Chinese vendor Lenovo, the bestselling computer vendor in the Asian region, launched a campaign targeting young Indonesian consumers. The company said that its planned for retail expansion would be based around connecting with this demographic. In an attempt to improve its position, Lenovo has also strengthened its logistics and service infrastructure in Indonesia and opened new stores. Lenovo currently has more than 600 outlets in 13 cities, 53 service centers in 24 cities and 11 pick-up and drop-off services in Jakarta. In May 2011, Lenovo announced plans to achieve a double-digit Indonesia PC market share in its current fiscal year. Lenovo's strongest position is in the large enterprise segment, where its share is 15.8%, followed by 9.8% for small and medium enterprises. Meanwhile Lenovo's share of the key consumer segment, which is the fastest-growing, is only 5.1%. The consumer segment is the one that Lenovo has targeted for most growth in 2011. Lenovo has previously failed to establish dominance in Indonesia, despite intense marketing efforts. Like other vendors, Lenovo has attempted to ride the popularity of lower priced small-form factor netbooks, having attributed much of its recent local market growth to the consumer segment. Dell is another vendor that is targeting the SME segment. The US vendor is also striving to meet market demand by moving away from simply providing SMEs with hardware by offering services. Dell's IT Pro Support and Fast Track Dispatch services provide certification of expertise to the IT staff of SMEs in remote areas of Indonesia. Toshiba plans to use low-end notebooks as its mainstay products in the Indonesian market. The company defines low-end as notebooks sold for less than IDR8mn. Toshiba's Indonesian notebook distributor, PT Techking Enterprises, said Toshiba aimed for low-end notebooks to account for 70% of sales in 2009, an exact reverse of the situation in 2008, when high-end products accounted for 70% of sales. In the Indonesian market as a whole, the low-end price tier accounts for about 70% of sales. Toshiba reported that Indonesia contributed to 35% of the company's total ASEAN and Indian revenues in 2008 and was the largest contributor in Q109. Dell, the traditional leading desktop supplier in the government and big corporate segments, with a 12% share, has implemented a strategy over the past few years to target Indonesia's consumers. Dell introduced new products and added new channel partners such as its partnership with retail network Metrodata. The company launched a new range of Inspiron-series laptops and slim-build desktops, which were available in major cities. Indonesia accounted for 7% of Dell's Asia Pacific revenues in 2007, © Business Monitor International Ltd Page 45 Indonesia Information Technology Report Q1 2012 up from 3% the year before, and Dell includes the country on a list of 14 priority emerging markets. The company expected the consumer segment to contribute around 20% of the company's Indonesian income. In contrast to Dell, Lenovo's strategy was already to focus on the consumer market with its own products, while supplying IBM legacy products for the commercial market. Lenovo's desktop computers cost US$490-1,100 and its notebooks are priced at US$700-2,000. Dell's overall commitment to Indonesia was demonstrated when it moved its South East Asia regional headquarters from Singapore to Jakarta. It has also set up 10 service centres in nine major cities in the country. Vendors are stepping up initiatives to reach out to SMEs. Enterprises account for 70-80% of all sales in Indonesia, while SMEs make up more than 90% of businesses. HP intensified its focus on SMEs in 2008 by launching several new computer portfolios specifically targeted at SMEs. IBM launched a local version of its Express IT package, which offers a range of hardware, software and related services, to SMEs. Prices ranged from US$1,000 to US$150,000 and the scheme offers various backup features. IBM Indonesia serves around 2,500 SME clients in various industries. Microsoft offered up to a 25% discount to SMEs that purchased the Windows Starter Edition. Software Software market leader Microsoft hopes that upgrades to its Windows operating system will continue to boost local sales. Microsoft has more than 3,500 business partners in Indonesia and has been active in IT for education initiatives. It works in cooperation with telecoms company PT Telkom and local software company PT Pesona Edukasi on an educational software development programme. Microsoft founder Bill Gates visited Indonesia back in May 2008 and discussed supporting the government's programme to provide low-cost computers and software to schools. Meanwhile in 2011, Microsoft announced that it planned to invest around US$2.5bn in Indonesia to develop cloud-computing systems. The company is partnering with Telekom Indonesia, and a number of other partners such as Astra Graphia Information Technology, cloud-computing infrastructure firm Greenview and Infynis System Indonesia for the initiative. Microsoft said that cloud computing was now at the centre of its business development plans in the region, and the company has forecast that the addressable market for cloud services in Indonesia could reach US$75 within the next few years. The company reported at several governent agencies and at least 14 large companies had expressed an interest in its cloud services. The government has made a number of attempts to promote open-source software (OSS.) In 2005, the governent launched the Indonesia Goes Open-Source initiative, hoping to counter software piracy, reduce dependency on proprietary software and encourage local manufacturers. The government has also launched many, largely unsuccessful, campaigns to convince consumers to shift to OSS. In 2009, the © Business Monitor International Ltd Page 46 Indonesia Information Technology Report Q1 2012 government issued a decree calling for all local governments to adopt OSS by 2011 and in July 2009 a pilot project was launched in Surabaya. Back in 2004, five ministries signed a declaration to use open-source. However, only the Department of Research and Technology really acted on the declaration, with 92% of its computers running on OSS. The barrier appears to be the reluctance of civil servants to invest time in learning how to use the open source applications. The government has said it is drafting 'new kinds of cooperation agreements' that could be made with Microsoft. In the enterprise applications segment, leading global vendor SAP has said it was optimistic that it could maintain its recent 60% annual growth momentum in Indonesia, despite the global economic slowdown. In 2008, the company predicted that it would surpass the 90 contracts secured in 2007. However, it said that most growth potential would come from up-selling to existing customers. Overall, SAP has 350 enterprise clients in the country spread across different segments. The company has been targeting the financial sector, with Bank Ekonomo among the customers implementing SAP's Human Capital Management solution. Meanwhile, US rival Oracle is also active in the Indonesian market. In 2011, the company's new clients included Acuatico Air Indonesia, one of the main players in water distribution in the southeast Asian region. Acuatico selected Oracle's Customer Care and Billing and Business Intelligence software to support its Indonesian operations. The next few years should feature a shift away from packaged proprietary software towards other models, such as cloud computing. Microsoft Indonesia reported that cloud computing accounts for around 20% of its local revenues and has been growing at about 50% per year. IT Services Major IT services vendors have reported growing demand in the telecoms, manufacturing and banking sectors. Oracle has an agreement with Indonesian IT solutions provider Sigma to provide outsourcing services. The arrangement focuses on providing large companies with business-related software that ensures security, performance and business continuity, as well as manpower. IBM won a contract from Excelcomindo to supply the telecoms company with a network fault and performance management system. E-government programmes are also seen by vendors as a potential growth driver. TCS said that it has targeted the government as a future growth driver in the Indonesian market. TCS' 15 Indonesian clients are mainly from sectors such as banking, financial services, telecoms and media. HP, which is promoting © Business Monitor International Ltd Page 47 Indonesia Information Technology Report Q1 2012 the idea of business technology in Indonesia, is to intensify its IT infrastructure recovery service. IBM has a partnership with local firm PT Mitra Integrasi Informatika to introduce its technology and consolidate servers at branch offices across the country. Indonesian companies are looking to leverage their advantages in the market. Sigma targeted a 40% growth in its managed services business in 2008. To achieve this, the company expanded operations and spent US$7mn on a new IT disaster recovery centre in Surabaya. Managed services accounted for around 42% of Sigma's total revenues and the company plans to expand across a number of verticals, including autos and manufacturing, as well as in its core area of finance. Backn 2008, Telekom Indonesia acquired an 80% stake in Sigma as part of its move into the IT services market. The telecoms company is hoping for synergies between Sigma's core customer base of 170, mainly banks. Telkom Indonesia said it regarded the move as the beginning of the Telkom Group's entry into Indonesia's IT services market. It was one of the largest IT services acquisitions in Indonesia's history. In Q311, PT Telekom's IT Services subsidiary Indonusa reported reveneus growth of 28% for its IT Services business. Cloud computing is a key focus for vendors . Telekom Indonesia has partnered with Microsoft to launch cloud computing services, including platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS). The partners targets the growing number of SMEs that hope to use ICT solutions to support their business activities. Telekom will offer companies applications in areas such as tax and finance. Meanwhile in August 2011, Telekom subsidiary Telekomunikasi Seular announced a partnership with Google to launch Business Connect, a Web-based package that includes email, instant messaging, office operation tools, a calendar, and documents-sharing. In March 2011, InstaCompute, a subsidiary of Indian IT giant Tata Communications, launched cloud computing services in Indonesia. The computing and storage services will be delivered by InstaCompute's unit in Singapore and be delivered via the internet backbone of Tata Communications. Meanwhile another Indian IT giant, Infosys, revealed in August 2011 that it had implemented a core banking solution, Finacle, in Bank Chinatrust Indonesia. The vendor's core solution, replacing the bank's legacy system, now drives operations across 13 branches of the bank. Internet Competitive Landscape The government has licensed more than 150 internet service providers, although only about 40 are operating. The number of broadband users in Indonesia was estimated at around 2.26mn in 2009, giving it a penetration rate of 1.0%. This has been a due to a lack of PCs, and service take-up has generally been © Business Monitor International Ltd Page 48 Indonesia Information Technology Report Q1 2012 restricted to Java, resulting in uneven development. The PC market has been growing and this, together with liberalisation in the sector, should enable Indonesia's broadband market to develop. © Business Monitor International Ltd Page 49 Indonesia Information Technology Report Q1 2012 Company Profiles IBM Indonesia Services Manufacturer, distributor and provider of advanced IT solutions, including hardware, software, peripherals and data processing equipment. Recent Developments In response to the tougher economic conditions faced by businesses, IBM has been promoting energy saving technologies and consolidation for datacentres. IBM Indonesia also launched a local version of its Express IT package, which offers a range of hardware, software and related services to SMEs. The price range is US$1,000-US$150,000 and the scheme offers various backup features. IBM Indonesia says it serves around 2,500 SME clients in various industries. The IBM Express programme for SMEs includes integrated solutions such as Linux-based suites for banking and the finance industries, ERP solutions for manufacturing industry inventory, supply chain management for retail and services industry, and web-based applications for hospitals, health centres, drug stores and universities. Future Plans IBM's Indonesian business consultancy services focused on three objectives: ERP system development, IT strategy design and application of a human capital management system. Local Market In the first quarter of 2010, IBM reported a 5% year-on-year (y-o-y) rise in income to Performance US$22.9bn. In Indonesia, IBM has already won a number of customers in the SME segment, including Surabaya-based Bank Antar Daerah and the Bogor-based frozen food company PT Belfood Indonesia. Presence Fully owned subsidiary. Sectors Government, SMEs and enterprise. © Business Monitor International Ltd Page 50 Indonesia Information Technology Report Q1 2012 Oracle Services Wholesaler of computer equipment and provider of IT services. Oracle reported strong customer momentum and an increase in total GAAP (generally accepted accounting principles) revenues of 24% to US$2.50bn in the Asia Pacific and Japan in FY07. Recent Developments Oracle has an agreement with local IT solutions provider Sigma to provide outsourcing services. The arrangement focuses on helping large companies to focus on core business while the IT partners optimise and maintain IT units. The services provided include businessrelated software that ensures security, performance and business continuity, as well as manpower to operate the system. Oracle Indonesia is the vendor and Sigma is the local implementation partner. Future Plans Oracle is already an active participant in the Indonesian market, where its strategic focus is on capturing 30-35% of the sizeable SME market. To achieve this ambitious target, despite many other vendors competing for the same segment, Oracle has established close business cooperation contacts with local organisations and institutions. Local Market In the 2010 fiscal year, Oracle Asia Pacific, which includes Indonesia, reported new software Performance licence revenues of US$1,366mn. Database and Middleware was the second largest regional revenues category, with reported earnings of US$1,082mn. Applications revenues were US$284mn, while earnings from Hardware Systems Products were US$274mn. Presence Oracle Indonesia is part of Oracle's South Asia region and wider Asia Pacific division, based in Singapore. Oracle has about 1,700 customers across the Asia Pacific region, of which 50% are from South Asia, including from Indonesia. Sectors Oracle has followed a similar path to other competitors by targeting the SME sector through introducing its Database Standard Edition-1 on the Indonesian market. The company said the product is comparable in performance and security with its corporate level product but is more affordable, enabling SMEs to build a business information infrastructure rapidly and economically. © Business Monitor International Ltd Page 51 Indonesia Information Technology Report Q1 2012 Sigma Services Sigma Cipta Caraka is a leading Indonesian IT company specialising in the banking sector, offering services such as software development and customisation, network and systems integration, managed resources and internet access. Sigma is one of IBM's major channels to sell hardware to local banks. In 2008, leading telecoms company Telkom Indonesia acquired an 80% stake in Sigma. The company is hoping for synergies between its 6,000 corporate customers and 170 of Sigma's customers, mainly banks. Telkom said that it saw the move as the beginning of Telkom Group's entry into Indonesia's IT services market. It is one of the largest IT services acquisitions in Indonesia's history. Recent Developments Following its acquisition by Telkom Indonesia, Sigma expanded its operations and spent US$7mn on a new IT disaster recovery centre in Surabaya. It has signed an agreement with Oracle to provide outsourcing services focusing on large companies, particularly in banking and telecoms. The arrangement centres on helping large companies to focus on core business while the IT partners optimise and maintain IT units. Among the recent wins for the partnership is a tender from Bussan Auto Finance, one of the leading multi-finance companies in Indonesia, to implement various Oracle applications. Sigma has been an innovator in the Islamic banking sector, as an increasing number of Indonesian individuals and companies choose to business with banking institutions that comply with shari'a principles. Sigma has capitalised on this, with its shari'a core banking system designed to follow the principles of Islamic banking. Future Plans Sigma management has said the company will be strengthening its core role as an IT provider for the whole banking sector. Local Market Following the acquisition by Telkom, Sigma targeted revenues of US$40mn in 2008, a 50% Performance increase. Presence More than 500 employees. Sectors Sigma targeted 40% growth in its managed services business in 2008. Managed services account for around 42% of SCC's revenues, and it is planning to expand across a number of verticals including auto and manufacturing, as well as its core area of finance. Sigma's flagship product is AlphaBITS, the software initially developed in 1989. It is a core banking system for day-to-day operations, connecting aspects such as delivery channels (teller and customer services) and back-office activities (accounting and general affairs). Developed as an industry-standard banking application, AlphaBITS offers integrated functionality with six main modules (kernel and security, CIF, retail, deposit, loan and general ledger). Using integrated design architecture, AlphaBITS can be incorporated with third-party applications. © Business Monitor International Ltd Page 52 Indonesia Information Technology Report Q1 2012 HP Services Technology services, consulting and integration. Recent Developments HP was estimated by market research firm IDC in Q309 to have a 26.5% share of the notebook market, behind market leader Acer. HP has intensified its focus on SMEs by launching several computer portfolios specifically targeted at these companies. The company is the market leader in the SME segment in Indonesia. HP is expanding its presence in South Sulawesi and Yogyakarta. HP has also strengthened its IT infrastructure recovery service. The main demand driver has been the banking industry, with major sector players such as the central bank of Indonesia becoming highly concerned with disaster recovery services. HP has also won disaster recovery contracts from telecoms operators. HP opened its 11th Indonesian outlet in Bandung in 2006. The company said it expected the new store to help achieve its target of doubling its sales in the city, which accounted for about 5% of nationwide sales. Future Plans HP aimed to reclaim the top spot in the Indonesian PC market from Acer in H110. HP, which estimates the market share gap between itself and Acer at about 10%, has launched new notebook and netbook series. New notebook products introduced to the regional market include the HP Probook 5130 M, HP Pavilion dm1-dm3 and the HP Mini 110-311. Local Market For the quarter ending January 31 2010, HP reported revenues of US$5.4bn for its Asia Performance Pacific region, which includes Australia. This represented growth of 26% on the same period of 2009, almost triple that of other regions. HP Asia Pacific reported 40% growth in its fiscal year ending October 31 2009. HP's Asia Pacific revenues declined by 1% y-o-y in Q409 to US$5.4bn. While HP does not release detailed regional figures, the company sells upwards of US$300mn-worth of products in Indonesia annually, including printers, desktops, notebooks and PDAs. Presence Fully owned subsidiary. Sectors Investing in manufacturing and the public sector. © Business Monitor International Ltd Page 53 Indonesia Information Technology Report Q1 2012 Country Snapshot: Indonesia Demographic Data Section 1: Population Population by age, 2005 Population by age, 2005:2030 (total) 75+ 75+ 70-74 70-74 65-69 65-69 60-64 60-64 55-59 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 15-19 15-19 10-14 10-14 5-9 5-9 0-4 0-4 -15.0 -10.0 -5.0 0.0 Male 5.0 10.0 15.0 -30.0 -20.0 -10.0 0.0 2030 Female 10.0 20.0 30.0 2005 Figures in millions. Source: UN Population Division Table: Demographic Indicators, 2005-2030 2005 2010 2020f 2030f Dependent population, % of total 34.2 33.3 30.4 30.7 Dependent population, total, ‘000 75,633 78,049 79,630 85,997 Active population, % of total 65.7 66.6 69.5 69.2 Active population, total, ‘000 144,926 156,238 182,239 193,669 Youth population*, % of total 29.1 27.7 22. 20.0 Youth population*, total, ‘000 64,359 64,980 59,917 56,019 Pensionable population, % of total 5.1 5.5 7.5 10.7 Pensionable population, total, ‘000 11,274 13,069 19,713 29,978 f = forecast. * Youth = under 15. Source: UN Population Division © Business Monitor International Ltd Page 54 Indonesia Information Technology Report Q1 2012 Table: Rural/Urban Breakdown, 2005-2030 2005 2010 2020f 2030f Urban population, % of total 47.9 53.2 62.6 68.9 Rural population, % of total 52.1 46.8 37.4 31.1 Urban population, total, ‘000 106,668 125,346 163,850 192,805 Rural population, total, ‘000 116,114 110,409 98,018 86,861 Total population, '000 222,782 235,755 261,868 279,666 f = forecast. Source: UN Population Division Section 2: Education And Healthcare Table: Education, 2000-2005 2000/01 2004/05 115 115 Gross enrolment, secondary 59 62 Gross enrolment, tertiary 15 17 Adult literacy, male, % 94.0 na Adult literacy, female, % 86.8 na Gross enrolment, primary Gross enrolment is the number of pupils enrolled in a given level of education regardless of age expressed as a percentage of the population in the theoretical age group for that level of education. na = not available. Source: UNESCO Table: Vital Statistics, 2005-2030 2005 2010 2020f 2030f Life expectancy at birth, males (years) 64.6 67.0 71.4 73.5 Life expectancy at birth, females (years) 68.6 70.5 75.7 77.9 Life expectancy estimated at 2005; f = forecast. Source: UNESCO © Business Monitor International Ltd Page 55 Indonesia Information Technology Report Q1 2012 Section 3: Labour Market And Spending Power Table: Employment Indicators, 2001-2006 2001 2002 2003 2004 2005 2006 Economically active population, '000 na na na na 105,802 106,282 – % change y-o-y na na na na na 0.4 – % of total population na na na na 46.8 46.4 Employment, '000 90,807 91,647 90,785 93,722 94,948 95,177 – % change y-o-y 1.0 0.9 -0.9 3.2 1.3 0.2 – male 57,131 58,583 59,909 60,582 60,769 61,864 – female 33,676 33,064 30,876 33,141 34,210 33,313 — female, % of total 37 36 34 35.3 36 35 Total employment, % of labour force na na na na 89.74 89.55 8,005 9,132 9,531 10,251 10,854 11,105 8.1 9.1 9.5 9.9 10.3 10.5 Unemployment, '000 – unemployment rate, % na = not available. Source: ILO Table: Consumer Expenditure, 2000-2010 (US$) 2000 2006 2007 2008 2009 2010 Consumer expenditure per capita 416 961 1,195 1,283 1,450 1,802 Poorest 20%, expenditure per capita 175 404 502 539 609 757 Richest 20%, expenditure per capita 900 2,081 2,588 2,778 3,138 3,902 Richest 10%, expenditure per capita 1,185 2,739 3,407 3,657 4,131 5,137 335 774 962 1,033 1,167 1,451 1,570 2,499 2,658 na na na Poorest 20%, expenditure per capita 659 1,050 1,116 na na na Richest 20%, expenditure per capita 3,399 5,411 5,755 na na na Richest 10%, expenditure per capita 4,475 7,123 7,576 na na na Middle 60%, expenditure per capita 1,264 2,012 2,140 na na na Middle 60%, expenditure per capita Purchasing power parity Consumer expenditure per capita na = not available. Source: World Bank, Country data; BMI calculation © Business Monitor International Ltd Page 56 Indonesia Information Technology Report Q1 2012 Table: Average Annual Manufacturing Wages, 2000-2012 (IDR) 2000 2006 2007 2008 2009 2010 2012f Wages, IDR 5,096 11,740 12,717 13,777 14,811 15,881 18,267 Wage growth, % y-o-y 30.15 15.37 8.32 8.33 7.51 7.22 7.28 f = BMI forecast. Source: ILO, BMI © Business Monitor International Ltd Page 57 Indonesia Information Technology Report Q1 2012 BMI Methodology How We Generate Our Industry Forecasts BMI’s industry forecasts are generated using the best-practice techniques of time-series modelling. The precise form of time-series model we use varies from industry to industry, in each case being determined, as per standard practice, by the prevailing features of the industry data being examined. For example, data for some industries may be particularly prone to seasonality, i.e. seasonal trends. In other industries, there may be pronounced non-linearity, whereby large recessions, for example, may occur more frequently than cyclical booms. Our approach varies from industry to industry. Common to our analysis of every industry, is the use of vector autoregressions. Vector autoregressions allow us to forecast a variable using more than the variable’s own history as explanatory information. For example, when forecasting oil prices, we can include information about oil consumption, supply and capacity. When forecasting for some of our industry sub-component variables, however, using a variable’s own history is often the most desirable method of analysis. Such single-variable analysis is called univariate modelling. We use the most common and versatile form of univariate models: the autoregressive moving average model (ARMA). In some cases, ARMA techniques are inappropriate because there is insufficient historic data or data quality is poor. In such cases, we use either traditional decomposition methods or smoothing methods as a basis for analysis and forecasting. It must be remembered that human intervention plays a necessary and desirable part of all our industry forecasting techniques. Intimate knowledge of the data and industry ensures we spot structural breaks, anomalous data, turning points and seasonal features where a purely mechanical forecasting process would not. Transport Industry There are a number of principal criteria that drive our forecasts for each transport variable: GDP Growth As transport activity is heavily influenced by real GDP growth, this factor is examined to ascertain its relationship with overall trade volumes. Projected GDP growth is calculated using BMI’s own macroeconomic and demographic forecasts. © Business Monitor International Ltd Page 58 Indonesia Information Technology Report Q1 2012 Real Trade Volumes The sum of imports and exports plays a particularly important role in developing countries with a small domestic industrial sector. In particular, the focus is on goods, as services not employ transport. The volumes are forecast based on the following criteria: Trends manifested through historical data; The impact of future step changes to the economy (such as future membership of the EU or some other regional body). Port Traffic Port traffic levels act as a ‘second opinion’ on trade volumes. However, this check needs to be used with caution as trade values and volumes not always move over time in the same way. Market Share The market share of each mode (road, rail, inland waterway, coastal shipping) for future years is based upon: Trends in historical modal split data; Evidence of government policy favouring one or more modes over others; Government and or private sector investment plans in specific modes. Sources Sources used in transport reports include local transport ministries, officially released company results and figures, established think tanks and institutes and donor agencies such as the World Bank and the Asian Development Bank. © Business Monitor International Ltd Page 59 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. [...]... Indonesia' s dependence on foreign oil Indonesia is perceived as one of Asia's riskier destinations This leaves the economy vulnerable to sudden capital outflows at times of risk aversion, which can lead to sharp swings in the currency © Business Monitor International Ltd Page 11 Indonesia Information Technology Report Q1 2012 Indonesia Business Environment SWOT Strengths Indonesia is South East Asia's largest... One market inhibitor is Indonesia' s continuing software piracy problem, which, according to the government's own figures, loses Indonesian software companies more than US$100mn a year In 2010, the level of piracy rose again (by 1%) to 87%, according to the Business Software Alliance (BSA) © Business Monitor International Ltd Page 29 Indonesia Information Technology Report Q1 2012 Indonesia was ranked.. .Indonesia Information Technology Report Q1 2012 Indonesia Political SWOT Strengths Indonesia managed a successful transition to democracy in 2004 In addition, the 2009 parliamentary and presidential elections passed peacefully, signalling the... Page 14 Indonesia Information Technology Report Q1 2012 Meanwhile, South Korea's government is encouraging the utilisation of cloud computing by small businesses New cloud computing offerings and increased competition in this segment are expected to fuel growing demand for this technology IT outsourcing is also expected to show a strong demand trajectory Malaysia remains in fifth position in our Q11 2... the Indonesian IT market has much growth potential BMI expects the Indonesian market to be one of the fastest growing in the region over the five-year forecast period Government infrastructure investments should also provide a boost to Business IT investment, which will likely remain buoyant in line with the © Business Monitor International Ltd Page 16 Indonesia Information Technology Report Q1 2012. .. Market Structure (% Of Total IT Market) 2011e 2015f e/f = estimate/forecast Source: BMI © Business Monitor International Ltd Page 24 Indonesia Information Technology Report Q1 2012 Indonesia IT Markets Overview Government Authority The National ICT Council is chaired by the Indonesian president and is tasked with formulating IT policy The other main task for the council is to coordinate a cross-departmental... given the dispersed nature of Indonesia' s population and the country's difficult terrain The local computer hardware market enjoyed a growth rate of 15-20% per year during the 1990s, with substantial imports and several foreign computer companies establishing production plants in Indonesia, © Business Monitor International Ltd Page 25 Indonesia Information Technology Report Q1 2012 despite a competitive... Monitor International Ltd Page 10 Indonesia Information Technology Report Q1 2012 Indonesia Economic SWOT Strengths Indonesia' s strategic location between the Indian and Pacific Oceans and its adjacency to major east-west trade routes make it an important economy in the region Indonesia is also resource-rich and is the world's largest producer of palm oil Indonesia has a low cost and large supply of available... projected to be India and Indonesia with 2011-2015 compound growth of 109% and 91% respectively, driven by increasing PC penetration Sri Lanka is third with the IT market growing by an estimated 89% over BMI's five-year forecast period, while China's total growth is estimated at a still healthy 70% © Business Monitor International Ltd Page 21 Indonesia Information Technology Report Q1 2012 Sectors And Verticals... accounts for more than 70% of Indonesian IT spending In 2011, the fastest growth segment was the consumer segment, which accounts for about 25% of computer demand The main drivers are growing affordability and more credit availability Rising PC penetration points to exceptional growth © Business Monitor International Ltd Page 26 Indonesia Information Technology Report Q1 2012 potential going forward . Copy Deadline: January 2012 Indonesia Information Technology Report Q1 2012 © Business Monitor International Ltd Page 2 Indonesia Information Technology Report Q1 2012 © Business. computing services, including platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS). Hardware BMI forecasts 2012 Indonesian computer hardware spending. Population 54 Indonesia Information Technology Report Q1 2012 © Business Monitor International Ltd Page 4 Table: Demographic Indicators, 200 5-2 030 54 Table: Rural/Urban Breakdown, 200 5-2 030