Indonesian SMBs Forecast to Spend US$7.2 Billion on Information Communications Technology in 2008
Small and medium businesses (SMBs, or companies with up to 999 employees) from Indonesia are set to spend US$7.2 billion on info communications technology (ICT) this year, up some 11.2% over 2007, due to a boom in the overall economy and a rise in the number of SBs (small businesses, or companies with up to 99 staff). This comes from the latest study by New York-based Access Markets International (AMI) Partners, Inc.
“In Indonesia, more than 99% of SMBs are SBs and they account for about 78% of the total ICT spend,” says Prasannavadan Gaitonde, Singapore based Research Manager at AMI Partners. “Up to 80% of these SBs are startups or fall in the 1-4 employee size band. These in turn will account for 50% of the SB spend this year.”
Indonesia has a young and dynamic business environment with the average age of owners/manager at 33 years. More than 66% of these owner/managers have a graduate degree or higher education. “Along with a spurt in domestic demand, this youth of decision makers has resulted in a positive environment with more than 40% SMBs expecting growth in the 15% to 20% range in 2008,” Mr. Gaitonde says. “This optimism is also prodding more SMBs to consider hiring more people. That will help relieve pressure on an otherwise high unemployment rate in Indonesia. The wage pressures are expected to remain flat through 2008.”
High growth possibilities are also making SMBs consider increasing their branch locations. AMI’s survey found that more than 25% of SMBs are planning to add 1-2 branches this year. Connectivity between branch offices and remote locations therefore will be a top priority for IT decision makers in 2008 among Indonesian SMBs.
The highest growth of 33% is expected in data security deployments, followed by 26% for data storage and 24% for Internet-related issues. “There will be an increasing dependency on the Internet among Indonesian SMBs this year,” Mr. Gaitonde says. “Increasing usage of Internet in terms of enabling business processes will prod more SMBs to invest in basic security solutions. As for data storage, investments are growing due to an increasing need for business continuity in a growing environment, but most of these investments will be on basic backup solutions.”
Mobility is another hot area. Indonesian SMBs are at the cusp of broader adoption of mobility-enabled devices, given the importance of improving productivity among their mobile workforce. Awareness of WiMax is very high and has the potential for steep uptake if the right solutions at the right price points are offered. VoIP (Voice over Internet Protocol) and IP telephony solutions still are attractive from a toll bypass mode to help cut calling costs.
“Indonesian SMBs expect telecom service providers to play a stronger role in offering them various bundled solutions especially for voice-related services,” Mr. Gaitonde says. “It is important that service providers rise to fulfill this need of a growing market.”
About the Studies
AMI’s 2007 Indonesia Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2007 Indonesia Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI’s annual surveys of SMBs across Indonesia, the study tracks a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.
For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail , or visit the AMI Web site at http://www.ami-partners.com.
About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and “go-to-market” solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.