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Cloud Computing

Indonesia: Two local cloud CEOs describe the tech scene

Indonesia is a growing market, which is often seen as unique in South East Asia. We catch-up with two local CEOs of cloud companies to find out more.


Who are the CEOs?

Neil Cresswell, CEO of IndonesianCloud, which launched in 2011.

Dondy Bappedyanto, CEO of PT Infinys System Indonesia, which launched in 2006

 

The tech scene in Indonesia seems quite different from other neighbouring countries – why do you think this is?

Cresswell: Indonesia has, and in some areas continues, to see IT as a cost centre; and because of this, focus from business leaders has been purely on cost reduction rather than innovation. This focus on cost reduction has meant IT assets are depreciated over an extended term (five to seven years), and there is also generally no fixed IT refresh policy. All of this has led to IT environments running outdated hardware and software stacks. Additionally, IT labour in Indonesia is comparatively cheap compared to other countries in the region, this means there is no real focus on automation toolsets to reduce IT operational costs, because the labour costs actually only make up a very small part of the overall IT spend.

Bappedyanto: We still have a lot to catch up on, but compared to other countries in South East Asia (except Singapore), I can say we’re pretty advanced in using technology and producing the technology itself. The growth of tech startups in Indonesia in the recent years proves that the market is thriving, and the growth of venture capital companies which invest in those startups indicate that there’s a huge potential in this market.

Development seems to have been rapid, what changes have been most apparent since you launched?

Cresswell: When we launched [in 2011], the local Cloud market didn’t really exist; we spent the first 12 months fundamentally just educating the market – with very few sales. More recently, growth has snowballed. This growth is in part due to economic conditions which made cloud far more financially appealing than traditional IT, but also due to the limited resource pool for engineers capable of deploying and supporting the latest generation technology – such as virtualisation, and converged systems – leaving companies with no choice but to outsource to cloud.

Bappedyanto: Well, people are more familiar with cloud. Nowadays businesses are not afraid of putting their data and their apps in the cloud. Companies like Infinys now have access to global tech brands, for example we are using an innovative software storage solution from Cloudian, to underpin one of our cloud offerings – Storage-as-a-Service.

Do you plan to expand into other local Asian countries? Can you include details?

Cresswell: We’re primarily focused on the Indonesian market; that said, we are also interested in expanding into Malaysia and Singapore. These countries are both very cloud aware, and due to exchange rate benefits, would be able to gain access to enterprise hosting for a lower price than their domestic markets. The aim for IndonesianCloud though is to first expand the “digital footprint” right across Indonesia (North, South, East, West), which furthers the digital inclusion aspirations of the government; and once that is completed (Q2 2016), begin the regional expansion with edge nodes in Malaysia and then Singapore.

Bappedyanto: Instead of expanding to the South East Asia region, we’re thinking of expanding nationally. This means putting more data centres in other provinces or on other islands. The internet connection is bit scarce in areas other than Java Island so I guess it’s more imperative to put the infrastructure just outside Java Island so access can be faster.

How do you think the Indonesian tech scene is progressing? i.e., where does it currently stand and what are its challenges to development?

Cresswell: Indonesian universities are producing many thousands of new developers every day; these developers are trained in the latest web technologies, so any applications they develop are natively designed for cloud environments. There are so many new application startups operating in the “market disrupter” space, i.e., those that modernise a legacy, outdated way of doing business, and these start-ups have no desire to run or manage their IT systems. Whilst legacy IT in Indonesia is still wanting to purchase capital assets and on-premises software deployments, all new applications being developed for the local market are only available in the cloud forcing legacy IT to accept change. This factor combined with the positive economics of cloud use will further expand the rapid uptake of cloud services.

Bappedyanto: The progress is quite fast but still sporadic. We still can’t move beyond the trend. We haven’t make any decision on which area of technology we need to focus into. Whether it’s hardware or software. 

What do you think might surprise an international tech community about Indonesia at the moment?

Cresswell: The degree of innovation in Indonesia is amazing. There are so many economic and social problems in Indonesia that smart people are seeing not as an inhibitor, but as an opportunity. As an example, the public transport network is fragmented, not well organised, and is hard to get accurate travel information; so a startup created an app that can track the buses, trains, and ships to give passengers real time stats. Also, the internet opens up people’s access to an array of online experiences, and to accommodate that, the number of new eCommerce companies is mind blowing. What was once a very limited market has ballooned into a multi-million dollar segment.

Is there anything else you’d like to share about the Indonesian tech scene?

Cresswell: Consumer facing services, in local language, are in significant demand, and that demand will continue to drive innovation and create new market opportunities. That, alongside government regulations that mandate consumer focused services are housed in Indonesia, will continue to push the expansion of cloud services. Watch this space.

Bappedyanto: As an emerging country, I think we’re still trying to find our personality in the tech scene, we’re yet to mature. I guess in the next five years, we’ll be able to define ourselves in technology. [This could be] as a big user or becoming a player in the bigger market. 

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