At a time when technology spending Indonesia is expected to decline by 7.1 per cent in 2020 - as opposed to the 7.5 per cent growth expected pre-Covid-19 - mobility and cloud technologies are set to present new opportunities for vendors.
An analysis of GlobalData’s Market Opportunity Forecasts Model reveals that the pandemic will lead to a decrease in technology spending from last year across almost all segments of the market.
Spending on hardware is expected to fall by 7.7 per cent, against the growth of 9.9 per cent in 2019 and the projected growth of 8.3 per cent before the outbreak.
Enterprises in Indonesia have been deferring hardware purchases as an initial response to the economic uncertainty owing to the pandemic. With enterprise now having moved onto the remote working phase, all capital expenditure is being re-evaluated, leading to decreased hardware spending in the domestic market.
The demand for software will also decrease in 2020 with enterprise customers 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 per cent owing to the demand for collaboration due to remote working.
Meanwhile, demand for technology services is also set to fall in Indonesia, with organisations pausing project-oriented services until business visibility improves. In addition, spending on managed and support services is set to decline with enterprises holding off amid such financial uncertainty.
The public cloud market - comprising of software-as-a-service, platform-as-a-service and infrastructure-as-a-service - will occupy a significant share of the cloud computing market for the rest of the year, with the industry expected to grow by 3.3 per cent compared to the same period last year. Enterprises in Indonesia are leveraging public cloud services to effectively manage processes such as data-recovery and the creation of a safe back-up system.
Specific to verticals, the government sector in Indonesia is expected to be the least impacted by Covid-19, with technology spending projected to decrease by 0.8 per cent in 2020. Similarly, spending in the healthcare and communications sectors are forecast to decline marginally by one per cent and 1.4 per cent respectively.
To ensure business continuity and minimise losses, organisations in Indonesia have adopted a cloud-first strategy by shifting infrastructure to the cloud, which has increased 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 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 infrastructures.