Recently released market study: Indonesia Information Technology Report Q2 2011

Recently published research from Business Monitor International, "Indonesia Information Technology Report Q2 2011", is now available at Fast Market Research
 
May 9, 2011 - PRLog -- The Indonesian IT market is forecast to grow at a compound annual growth rate (CAGR) of 17% over the 2011-2015 period. In 2010, demand for IT products and services recorded double-digit growth, after some manufacturing organisations had deferred IT procurements in 2009. There was continued spending in the financial sector, which previously accounted for as much as 30% of total spending.

Indonesia is expected to be one of the best regional IT market growth prospects over BMI's five-year forecast period. Some fundamental drivers, including low computer penetration and growing affordability, should ensure that the market remains firmly in positive growth territory. Growing investment in datacentres and other ICT infrastructure will drive demand for IT services.

By 2015, Indonesia's hardware-dominated IT market is projected to reach a value of US$9.6bn. With information and communication technology (ICT) penetration of around just 20% and development restricted to richer areas such as Java, the market has much growth potential. However, the country's uneven development and digital divide are major barriers to faster growth in this potentially huge IT market.

Industry Developments

In 2010, Indonesia's information society development received a boost when the government said that it would start to introduce e-passports. Indonesia will thus follow in the footsteps of other South East Asian countries such as Singapore, Malaysia and Thailand. The immigration department plans to distribute 10,000 e-passports in the first phase, with these being mainly available in immigration offices in Jakarta, Semarang and Surabaya.

The government is also rolling out e-learning initiatives, which could cause education's share of local IT spending to rise from its estimated level of around 4%. The ratio of PCs to students in public schools is around 1:3,200. The government wants to increase this to 1:20. As there are 53mn students in the Indonesian schools system, this would require at least 2.5mn computers.

Competitive Landscape

In 2010, PC market leader Acer was targeting an increased share of the Indonesian PC market. Indonesia has already become Acer's largest South East Asian PC market, surpassing Thailand and Malaysia. Meanwhile, Lenovo, the bestselling computer vendor in the Asia region, announced plans to set up a new subsidiary in Indonesia.

The next few years should feature a shift away from packaged proprietary software towards other models, such as cloud computing. Microsoft Indonesia has reported that cloud computing accounts for around 20% of its local revenues and had been growing at about 50% per year. In 2010, Telkom partnered with Microsoft to launch cloud computing services that target SMEs with applications for tax and finance. IT service vendors have reported a growing demand in the telecoms, manufacturing and banking sectors. Indian IT leader Tata Consultancy Services (TCS) said it has targeted the government as a future growth driver in the Indonesian market. TCS' local clients to date are mainly from sectors such as banking, financial services, telecoms and media.

Hardware

BMI estimates 2011 Indonesian computer hardware spending of US$3.6bn, up from US$3.2bn in 2010. The market is forecast to return to double-digit growth in 2011 and to rise to a value of US$6.5bn by 2015. In 2010, consumer demand was reinforced by a revival in business IT hardware spending, which could account for about two-thirds of sales opportunities during the forecast period, with sales value doubling by 2015.

Hardware accounts for more than 70% of Indonesian IT spending. The main drivers are growing affordability and more credit availability in a country where only about 10% of the population have access to a PC, compared with more than 30% in some other South East Asian countries such as Malaysia or Thailand.

Software

Indonesia's software sales are forecast by BMI to reach US$636mn in 2011, up from an estimated US$535mn in 2010. During BMI's five-year forecast period to 2015, the software sector CAGR is forecast at 20%. In 2011, migrations to Microsoft's new Windows 7 operating system should remain a driver, although much will depend on consumer and business confidence. One market inhibitor is the continuing software piracy problem, which, according to the government's own figures, loses Indonesian software companies more than US$100mn per year.

Over the forecast period, enterprise resource planning (ERP) software should continue to be of most interest to small- and medium-sized enterprises (SMEs) as only around 20% of Indonesian SMEs are estimated to make use of IT. In addition to cost savings, businesses will look to boost efficiency and increase the flexibility of responses to customer needs.

IT Services

Indonesia's IT services market is forecast to be worth US$898mn in 2011, recording double-digit growth from US$769mn in 2010, based on BMI estimates. IT services account for 17% of Indonesia's hardwarecentric IT market sales. Hardware deployment services remain the largest Indonesian IT services category with a 20% market share.

In 2009, the banking sector still provided opportunities for IT vendors, despite the fallout from the global financial crisis. Banks continued with transformation strategies, driven by factors such as new technologies and services and regulatory compliance. However, most opportunities are in fundamental service areas such as system integration, support systems, training, professional services, outsourcing and internet services.

E-Readiness


For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/152686_indonesia_information_t...

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
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