Realising the full potential of cloud computing on the Indonesian economy

Jakarta, 15 February 2022 - In a 2017 PwC report entitled “The World in 2050”, Indonesia was projected to be ranked the fourth country in the world with a GDP of US$ 10.52 trillion. Technology adoption will have a significant contribution to this projection. Currently, Indonesia is entering an era of the industrial revolution 4.0. in which information and communication technology is massively disrupted by the COVID-19 pandemic. 

Information and communication technology, including cloud computing and high performance computing will be the focus and key to the success of infrastructure development in Indonesia in achieving the vision of Indonesia 4.0. 

Leonardo A. A. Teguh Sambodo, Director for Industry, Tourism, and Creative Economy of the Ministry of PPN/Bappenas, said that, “Indonesia is one of the fastest-growing cloud markets in ASEAN countries. We hope that the growing demand for cloud services in the market and increased awareness among the younger generation will create a larger cloud market in Indonesia. With the increasing number of startups already, in which some of them are unicorns, we can provide the right government response and policies to facilitate the market growth and also to create a better ecosystem”

Today, PwC Indonesia released a study report The Impact of Cloud Computing on the Indonesian Economy on the adoption of cloud computing by companies and organisations in Indonesia and hosted a webinar on this topic with panellists from business and government: Leonardo A.A. Teguh Sambodo (Director for Industry, Tourism, and Creative Economy, Ministry of PPN/Bappenas), Ade Frihadi (Government Interoperability Technology and Infrastructure Coordinator, Ministry of Communications), Dino Milano Siregar (Director of Digital Finance Innovation Group, Indonesia, Financial Services Authority), Atika Nur Rahmania (Head of Department of Communications, Informatics, and Statistics, Provincial Government of Jakarta), Indra Utoyo (Digital & Technology Information Director, PT Bank Rakyat Indonesia Persero Tbk), Gunawan Susanto (Country General Manager for Indonesia, Amazon Web Services), Abhilash Ramakhrisna (Chief Technology Officer, Halodoc), Yurendra Basnett (Senior Public Management Specialist,  Asian Development Bank), and Rohit Antao (PwC Partner, Digital Innovation Asia Pacific Leader). 

The objective of the study was to get a view of the state of cloud computing in Indonesia, understand more about the benefits that enterprises have seen from cloud computing, and also to estimate the impact of cloud computing on the Indonesian economy.

Companies in Indonesia have embraced cloud computing since its introduction, fuelled to a large extent by the pervasive use of mobile phones and social media by their customers. Cloud computing provides a quick path for companies, the private and public sectors to open digital channels to interact with these customers using the internet. 

Ade Frihadi, Government Interoperability Technology and Infrastructure Coordinator from Ministry of Communications, said, “In terms of the benefit of cloud computing in the government sector, there are two main benefits. First, cloud computing can help minimise the budget, one of them being the infrastructure budget. And second, the organisation effectiveness as a result of the collaboration between entities; government, private sector and public sector can be improved.”

Moreover, when the COVID-19 pandemic hit, companies suddenly needed to find better ways for their employees to work from home, for their customers to order and receive services and products from anywhere, and for their suppliers and business partners to interact digitally to feed the company's supply chain. The need for online collaboration has increased significantly with 40% of respondents seeing opportunities to use the cloud for collaboration purposes and 20% of respondents seeing opportunities to use it for office automation.

The report shows that among small and medium-sized businesses, 89% of respondents are actively using cloud services, with 9% planning to use it in the near future. Meanwhile, for large enterprises, 80% of respondents are already using cloud technology while the rest are planning to adopt cloud within the next three years.

Widita Sardjono, Digital Transformation Partner of PwC Indonesia, said, “Adopting cloud computing enables companies to improve operational effectiveness and increase their productivity. Cloud computing helps organisations achieve the agility required to survive and even thrive in an unpredictable market. To get the full benefits of the cloud, organisations need to address not just the technology aspects but also more importantly the business and people aspects of the cloud transformation.” 

Julian Smith, ESG, Government, and Infrastructure Advisor of PwC Indonesia, added, “Cloud computing plays an important role in generating economic value. By enabling new business opportunities, it also generates large social benefits such as improved healthcare and education, and can have a positive environmental impact by reducing the need to travel. In terms of economic value, it is estimated that the cumulative productivity benefit to the Indonesian economy of cloud adoption will be at least US$10 billion over the next five years (2021 - 2025). On the environmental impact, large scale adoption of cloud computing is also expected to result in energy savings due to consolidation of computing resources from individual data centres to the cloud provider’s data centres that are run more efficiently at a higher utilisation rate.” 

Commenting on the discussion in the webinar, Julian added:  “It was great to see a significant understanding and alignment between business and several government ministries and agencies about the role they need to play to maximise the benefit of cloud for Indonesia.”

Dino Milano Siregar, Director of Digital Finance Innovation Group of Indonesia Financial Services Authority (OJK), stated, “Nowadays, the cloud is used by financial services institutions, from banks to startups. They maximise the back-end system to the front-end, namely from storing and processing the data on a large scale to the ease of developing apps. On the other hand, this technology has inherent risks as cloud computing adoption gets broader. We urge startups to consider and be careful in choosing a service and determine which provider has a reliable system. In addition, companies need to have adequate risk management strategies, such as having people with certain IT qualifications, conducting regular audits and collaborating with certified external institutions.”