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A pragmatic approach

11 Sep 2013
00:00
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The Indonesia cloud computing market grew by 43% last year to $31.4 million. Although from a small base, this growth still highlights the increasing adoption rate for cloud services among businesses in Indonesia.

The initial adoption was driven by international services available in the country that catered to the local businesses looking to gain a better understanding of cloud services. This led to greater market awareness and an appreciation for the new delivery model.

However, enterprises soon realized that the country’s infrastructure and business environment was still in its infancy.

Identifying this as an opportunity, local data center services providers and telcos entered the market. While some have chosen to partner with international cloud service providers, others have chosen to establish their own offerings. The former is more common for SaaS offerings, but the latter model is most prominent among IaaS offerings.

SaaS accounted for 95% of the market in 2012. IaaS had just a 3.8% share and PaaS had less than 1%. The dominance of SaaS is expected to continue despite greater growth rates for the other two services stacks. This may be attributed to greater ease of adoption of SaaS, a large SMB population that has access to enterprise class IT for the first time and higher pricing potential visà–vis other services.

Enterprise sentiments

Frost & Sullivan undertook a survey of 150 IT decision-makers in large enterprises and SMBs in Indonesia. The survey revealed the increasing importance of cloud services with the IT decision-makers as well as the challenges they perceive in its adoption. (See highlights to the left.)

Cloud computing has emerged as a major constituent of IT strategy for most businesses in Indonesia. Some 45% stated it is their No.1 priority for 2013. With a growing focus on enhancing business agility with stable or lower IT costs, cloud computing is seen as an effective way to enhance efficiency of IT infrastructure with a considerably faster deployment time.

In a clear sign that decisions relating to the cloud have started percolating down from the top management, 40% of IT decision-makers say that senior management is increasingly exerting pressure on the IT teams to look at a cloud alternative, to reduce costs and increase business agility. There is a growing consensus that IT needs to “do more with less” and align it more closely to business needs.

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