Enabling Entrepreneurs and SMEs in Indonesia

The importance of Small and Medium Enterprises (SMEs) in driving economic growth has become increasingly apparent in recent years and is particularly relevant in Asia where SMEs represent 95 percent of businesses in most Asia Pacific Economic Cooperation (APEC) countries. These businesses provide half of all employment opportunities in some countries and generate a substantial percentage of GDP. 

Furthermore, a recent IDC survey predicts 14 million cloud-related jobs will have been created by 2015 and more than half of these jobs will be in SMEs. In Indonesia, cloud-related jobs will grow by a massive 102 percent, from 452,012 to 915,848.

So it came as no surprise during my recent trip to Indonesia, where SMEs contribute 56.5 percent to GDP and employ 66.7 percent of the workforce, that a strong theme through my conversations was how technology can support SME growth and help them keep up with the changing business environment. And more specifically, what role should cloud computing play in this technology mix. 

The benefits of cloud computing to SMEs have been well publicized: the reduction of up-front costs of technology infrastructure; equalized access to technology meaning large businesses no longer have a technological advantage; and the ability to access data from anywhere, anytime are all significantly valuable to young businesses. Spending less money on their IT also means they can focus resources on developing their business.

An additional benefit of the cloud is that users are guaranteed genuine software which removes the risk of SMEs inadvertently acquiring pirated software and encountering the risks that come with it.

So it should go without saying that SMEs across the region should be embracing cloud solutions, right? But they’re not. Despite the acknowledged benefits, a Springboard survey in 2011 testing attitudes to cloud computing in key APAC markets shows that while larger Asian businesses are embracing cloud services, 68 percent of organizations with less than 50 PCs have no plans to follow suit. SMEs are lagging behind, creating a missed opportunity which could impact both their competitiveness and the competitiveness of the country in which they are based. I want to focus this article on what Microsoft is doing in Indonesia to help ease the concerns SMEs have about cloud computing. 

There are several challenges that need to be addressed to encourage take up of the cloud. And the three most important ones in Indonesia are security, lack of understanding of the cloud and connectivity. 

1.       Security: A major barrier is concern about security. Businesses tend to take a cautious approach to new technology and are wary of unauthorized data access in the cloud. Some manage this risk by putting non sensitive workloads such as email in a public cloud while keeping business critical information in a private cloud. Microsoft supports this approach, believing that some companies will in time be working in a hybrid cloud world – a mix of private clouds, public clouds and service providers. Working towards this belief, we’ve created solutions which span private and public clouds as well as services that span productivity, business applications and infrastructure.

Microsoft is also working with telecommunications companies and hosters to build private cloud solutions that the SMEs can consume. In addition, Microsoft cloud offerings run in geographically dispersed data centers that comply with key industry standards, for security and reliability. They are managed, monitored, and administered by Microsoft operations staff that have years of experience in delivering the world’s largest online services with 24 x 7 continuity.

We are also keen to be part of the conversations with the Indonesian government about implementing policy frameworks which will promote trustworthy and secure cloud services and alleviate concern about data security. 

2.       Lack of understanding: Another obstacle to cloud adoption is a lack of understanding of the cloud, resulting in companies leaning towards approaches that they are familiar with. In recognition of this, Microsoft constantly gathers critical customer insights and user knowledge, which we use to improve the quality experiences people have with our products, services and programs. With 90 percent of Microsoft’s R&D expenditure focused on the cloud, Microsoft is uniquely placed to help transform the Asia Pacific workforce to the new world of work and help Asian businesses realize their full cloud potential. 

To further enable SMEs to benefit from the new opportunities and competitive advantages cloud computing will open for them, Microsoft has reinvented its certification program to directly address technology’s evolution to the cloud. The Microsoft Certification Program will evolve with the cloud to provide IT professional and developers competitive advantage in the industry. The program covers key technology solutions that better support organizations in creating efficiencies as well as helping individuals design and operate mission-critical IT technologies .

3.       Connectivity. A major blocker to cloud adoption in Indonesia is connectivity. The reality is that many SMEs in Indonesia do not have an internet connection, or they have a very slow one. While the Indonesian government is seeking to increase the broadband penetration rate, the private sector is creating short term solutions through technology hubs such as I cafes to help families and citizens connect with each other.   Microsoft is working with the University of Indonesia and the I Café Association to improve and develop I cafés so they can become connection hubs for schools, SMEs and families. At the same time, the I cafés themselves should become revenue generating businesses.