Software - Indonesia

Indonesia

In 2024, the projected revenue in the Software market in Indonesia is expected to reach US$1.17bn.
The dominant player in this market segment is Enterprise Software , which is projected to have a market volume of US$0.49bn in 2024.
Looking ahead, the revenue is expected to grow at an annual growth rate (CAGR 2024-2029) of 8.39%, resulting in a market volume of US$1.75bn by 2029.
When compared globally, it is worth noting that United States is projected to generate the highest revenue, with US$363.40bn in 2024.
Indonesia's software market is experiencing a surge in demand for cloud-based solutions to support remote work and digital transformation initiatives.

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

Definition:

In general, software is defined as a set of instructions written as programming code to execute specific tasks on a computing device. The Software market covers a wide range of software products and solutions that are publicly sold by various companies. Most software solutions in this market are designed for professional use, but some can also be suitable for personal use. They can also range from basic productivity tools such as word processors and spreadsheets to complex software solutions such as project management tools, graphic design software, and enterprise resource planning software.

Products in the Software market can be obtained in two ways: as on-premises software that is sold via a transactional license or a subscription and as cloud-based software (software as a service/ SaaS) that is most frequently sold as a subscription.

Structure:

The market contains four markets that are based on the functionality of the software:

Productivity Software refers to application software that supports activities such as producing documents, spreadsheets, drawings, and presentations. This market includes Administrative Software, Collaboration Software, Office Software, Creative Software, and Construction and Design Software.
Enterprise Software refers to all software that supports essential large-scale business activities such as enterprise resource management, customer management, and supply chain activities. This market includes Enterprise Resource Planning Software, Customer Relationship Management Software, Business Intelligence Software, Supply Chain Management Software, Content Management Software, and Other Enterprise Software.
Application Development Software refers to software and tools that help the overall application development process.
System Infrastructure Software refers to software that provides the base framework for operating and managing organizational processes and services on hardware devices.

Additional Information:

The Software market comprises revenue and revenue change as the key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in this market include Microsoft, Adobe, SAP, Oracle, and Salesforce.

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Analyst Opinion

The Software market in Indonesia has been experiencing a significant growth in recent years.

Customer preferences: Indonesian customers have shown a strong preference for cloud-based software solutions. This is due to the increasing adoption of cloud computing in the country, which has resulted in a growing demand for software that can be accessed from anywhere and at any time. Additionally, customers in Indonesia have also shown a preference for software solutions that are mobile-friendly and can be accessed on-the-go.

Trends in the market: One of the major trends in the Indonesian software market is the increasing adoption of Artificial Intelligence (AI) and Machine Learning (ML) technologies. This is due to the growing interest in automation and the need for businesses to streamline their operations. Another trend in the market is the rising demand for cybersecurity software solutions, as businesses look to protect themselves from cyber threats.

Local special circumstances: Indonesia is the largest economy in Southeast Asia and has a rapidly growing middle class. This has resulted in a growing demand for software solutions that cater to the needs of this demographic. Additionally, the Indonesian government has been actively promoting the growth of the digital economy in the country, which has resulted in a favorable environment for software companies.

Underlying macroeconomic factors: The Indonesian economy has been growing at a steady pace in recent years, which has resulted in a growing middle class and increased consumer spending. This has led to a growing demand for software solutions that cater to the needs of this demographic. Additionally, the Indonesian government has been actively promoting the growth of the digital economy in the country, which has resulted in a favorable environment for software companies. Finally, the increasing adoption of cloud computing and the rise of AI and ML technologies have also contributed to the growth of the software market in Indonesia.

Methodology

Data coverage:

The data encompasses B2B, B2G, and B2C enterprises, except for the Enterprise Software segment, in which consumer (B2C) spending is not considered. Figures are based on the allocation to the country where the money was spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and reports from our primary research. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, level of digitization, GDP sector composition, and observed level of software piracy. 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. The main drivers are the GDP and the level of digitization.

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 is considered at a country-specific level.