IT Services - Indonesia

Indonesia

The projected revenue for the IT Services market in Indonesia is expected to reach €5.13bn by 2024.
This market segment is dominated by IT Outsourcing, which is projected to have a market volume of €1.82bn in the same year.
The industry is expected to experience an annual growth rate of 8.40% (CAGR 2024-2029), resulting in a market volume of €7.68bn by 2029.
In terms of average spend per employee, the IT Services market in Indonesia is projected to reach €36.14 in 2024.
When compared globally, United States is expected to generate the highest revenue in this market segment, with €479.00bn projected for 2024.
The demand for IT services in Indonesia is rapidly increasing due to the country's growing digital economy.

Key regions: United States, China, India, Japan, Germany

Definition:
The IT Services market encompasses a wide range of services used by organizations to create, manage, and deliver information, and it includes services that provide assistance with various other business functions. The primary goal of IT services is to ensure that information technology infrastructure, applications, and systems are effectively implemented, operated, and optimized to support an organization's business objectives and requirements. The specific range of services offered may vary depending on the service provider and the client's requirements.

Structure:

IT Services contains four distinct markets that are based on different services:

IT Consulting & Implementation covers advisory services that help businesses evaluate their technology strategies and align them with their business strategies or internal processes.
Business Process Outsourcing (BPO) refers to the transfer of entire business processes or individual activities from a company to a third party and is often IT based. BPO covers a wide variety of business processes, usually either in the back office (e.g., human resources) or in the front office (e.g., customer service in call centers).
IT Outsourcing refers to the external contracting of all IT-related services instead of relying on company-owned resources. In an IT context, these activities include IT administration, IT application, and web hosting services.
The Other IT Services market covers revenues for areas that are not specifically mentioned in the other markets, such as system integration, software installation and support, and IT education and training.

Additional Information:

The IT Services market comprises revenues, revenue change, average spend per employee, and a list of the key players in the market and their consolidated revenues. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Cognizant, Hewlett Packard Enterprise, and TCS.

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Analyst Opinion

Indonesia, the world's fourth most populous country, is rapidly growing its IT Services market.

Customer preferences: Indonesians are increasingly relying on technology for their daily activities, such as online shopping, mobile banking, and social media. This has created a demand for IT Services, particularly in the areas of software development, cloud computing, and cybersecurity. Additionally, the government's push for digital transformation in both the public and private sectors has further fueled the growth of the IT Services market.

Trends in the market: One trend in the Indonesian IT Services market is the rise of local startups and small and medium-sized enterprises (SMEs) that are offering innovative solutions to meet the needs of the growing digital economy. These companies are leveraging emerging technologies like artificial intelligence (AI) and the Internet of Things (IoT) to develop new products and services. Another trend is the increasing adoption of cloud-based solutions, as more businesses look to streamline their operations and reduce costs.

Local special circumstances: Indonesia's archipelago geography presents unique challenges to the IT Services market, as access to technology and infrastructure can be limited in certain areas. However, this has also created opportunities for companies to develop solutions that cater to the specific needs of different regions. Additionally, the country's diverse cultural landscape means that companies must tailor their offerings to different languages and customs.

Underlying macroeconomic factors: Indonesia's strong economic growth and young, tech-savvy population have contributed to the growth of the IT Services market. The country's digital economy is projected to reach $124 billion by 2025, driven by e-commerce, fintech, and other digital services. The government's support for the digital transformation of the economy, through initiatives like the Making Indonesia 4.0 roadmap, has also created a favorable environment for the IT Services market to thrive.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.