2014 ASEAN IT Report from Business Monitor International

This table and chart is a resume from previous article of BMI report.

As we can see here, Indonesia compare to the other 4 ASEAN countries has bigger portion of IT spending, around more than one third (38%).  Indonesia also leading on CAGR (13%) followed by Vietnam.  Most of IT spending growth is generated by Software and IT Service category.

From the chart below, it is obvious that most of the countries spend their IT budget for Computer Hardware (50%-65%), except Singapore that spend dominantly on IT Service (40% - 45%). This situation represents that Singapore IT penetration is higher and more mature so IT spending switch to IT Service, such as Data Center, Cloud, and IT Managed Service.

2014 Vietnam IT Report from Business Monitor International

Taken from

Vietnam Information Technology Report
Published 03 October 2014

BMI View:   We maintain a positive outlook for the Vietnamese IT market in the Q4 update, but we highlight increased downside risk from a tightening of domestic credit conditions in H214 as a result of a build up of bad debt. Credit markets could cause short term disruption but our forecast for robust medium term growth in Vietnamese IT spending remains in place, with a forecast for a compound annual growth rate   ( CAGR ) of 12.6 % between 2014 and 2018 . We expect growth will be driven by rising incomes, enterprise modernisation and the policy environment put in place by the government. We also highlight larger opportunities in the retail market where penetration of devices and services remains below the level in neighbouring markets , which vendors will be able to tap as incomes rise. Meanwhile, Vietnam 's development as an outsourcing destination is a significant medium term factor , with the services segment expected to expand rapidly. There is also increasing momentum towards Vietnam becoming a global centre for electronics production as wages rise in China and manufacturers look to protect margins by moving to Vietnam , where wages are as little as a third of those in China.

Headline Expenditure Projections

• Computer Hardware Sales: VND 38.9 trn in 2014 to VND 58.3 trn in 2018, CAGR of +11.3% in local currency terms. Rising incomes and declining device prices, along with PC subsidy schemes, will support demand growth across all three main device categories over the medium term.
• Software Sales: VND 10.1 trn in 2014 to VND 17.9 trn in 2018, CAGR of +16.1% in local currency terms. There are considerable opportunities in business software and security solutions for vendors willing to accept narrow margins in a price-sensitive market.
• IT Services Sales: VND 14.2 trn in 2013 to VND 25.1 trn in 2018, CAGR of +15.1% in local currency terms. Domestic demand for services remains weak.

2014 Philippines IT Report from Business Monitor International

Taken from

Philippines Information Technology Report
Published 13 August 2014

BMI View: We have a bullish outlook for the development of the Philippines ' IT market , which we believe   will be a regional out performer over the medium term . Low penetration of products and services has left an opportunity for vendors to target the market as incomes rise and device prices decline , creating a fertile environment for a period of robust catch-up growth . Meanwhile, the booming business process outsourcing ( BPO ) industry presents a huge opportunity for enterprise sales for hardware and software vendors . Taking the market as a whole, we forecast IT spending growth of   10.9 % in 2014, with the market expected to reach a value of PHP 181.8 bn.   Over the medium term emerging technologies will add to the growth momentum, particularly in the latter years of our forecast, with cloud services, big data analytics, smart infrastructure, tele-health and e-government all expected to contribute to growth .

Headline Expenditure Projections

• Computer hardware sales: PHP91.7bn in 2013 to PHP99.1bn in 2014, growth of 8.1% in local currency terms. Desktop and notebook shipments remain under pressure, but this is compensated for by the boom in tablet volumes, but, with demand shifting to lower-cost devices, increases in market value will not keep pace with unit growth.
• Software sales: PHP24.1bn in 2013 to PHP27.0bn in 2014, growth of 12.2% in local currency terms. Enterprise software penetration is low but, with the modernisation of local companies, we expect strong growth in spending, particularly for low-cost cloud enterprise resource planning systems.  
• IT services sales: PHP48.2bn in 2013 to PHP55.6bn in 2014, growth of 15.4% in local currency terms. The booming outsourcing sector provides the main impetus for outperformance, but cloud computing demand is also growing.

Key Trends And Developments

• The development of the BPO industry in the Philippines is an important trend for the IT market.

2014 Thailand IT Report from Business Monitor International

Taken from

Thailand Information Technology Report
Published 10 October 2014

BMI View: Thailand's IT market continues to be impacted by economic and political uncertainty, which is a drag on enterprise and consumer confidence . H igh household debt and baht depreciation also weigh on our forecast in 2014, but we expect the situation to improve markedly from 2015. Over the medium term s trong growth is forecast across all IT segments mak ing the Thai IT market one of the largest and fastest growing in the region. Drivers such as high private final consumption and the economy's strong growth trajectory will support the market's expected expansion. In addition, fundamentals such as increasing connectivity and the falling price of devices are enabling a wider range of potential users to enter the market. We see strongest growth in product categories such as tablets , cloud computing, big data analytics, real-time business management systems and enterprise software adoption among SMEs.

Headline Expenditure Projections

• Computer Hardware Sales: THB108.9bn in 2014 to THB130.2bn in 2018, with CAGR of 4.6%. Desktop and notebook demand expected to stabilize after withdrawal of support for XP and cuts to Windows OS licensing fees, but low-cost tablets will remain fastest area of growth.
• Software Sales: THB36.6bn in 2014 to THB48.2bn in 2018, at a CAGR of 7.1% 2014-2018. Key drivers will include enterprise OS upgrades and productivity enhancing investments, particularly among SMEs that are looking to control costs and achieve scale.
• IT Services Sales: THB51.1bn in 2014 to THB76.9bn in 2018, with a CAGR of 10.8%. We expect IT services will be the outperforming segment of the IT market as cloud computing demand drives growth.

Key Trends & Developments

The cloud computing market is developing rapidly in Thailand as international vendors target the growth opportunity, while local firms and telecoms operators are also looking to get a foothold in the market. Vendors targeting the growth opportunity in Thailand.

2014 Singapore IT Report from Business Monitor International

Taken from

Singapore Information Technology Report
Published 10 October 2014

BMI View:   W e have a positive outlook for the growth of Singapore's IT market , which will underperform emerging market growth rates, but is expected to outperform against other developed markets. Strong income growth, exposure to the APAC growth story and government policy will all support IT market growth over the medium term. Growth from the sales of PC and devices will slow as high device penetration in the city state means little prospect for first time sales , but short replacement cycles and strong demand for premium devices will ensure it remains a lucrative market for vendors . Considering the government active push to promote Singapore as a destination for cloud, big data and analytics services, Singapore should be a strong contender in the data centre space against peers such as Australia, Taiwan, South Korea and Hong Kong.

Headline Expenditure Projections 

Computer hardware sales forecast to increase from SGD 2.926 bn in 2014 to SGD 3.333 bn in 2018, equating to a compound annual growth rate (CAGR) of 3.5% in local currency terms. The slowdown in tablet sales represents downside by a stabilisation in desktop and notebook volumes will see the market continue to grow over the medium term.

Software sales forecast to increase from SGD 1.436 bn in 2014 to SGD 1.733 bn in 2018, representing a CAGR of 5.2% in local currency terms. SME demand for basic enterprise software (particularly SaaS), complex deployments by large enterprises and investments in security software will all be growth areas.

IT Services sales forecast to increase from SGD 3.236 bn in 2014 to SGD 4.091 bn in 2018, equating to a CAGR of 5.9% in local currency terms. Growing demand for cloud computing, big data and analytics services from telecoms, healthcare, logistics and government will support IT services outperformance.

Key Trends And Developments

Like most developed markets, the boom in tablet sales has been the most prominent development in the PC market in recent years.

2014 Indonesia IT Report from Business Monitor International

Taken from :

Indonesia Information Technology Report

Published 18 August 2014

BMI View: our bullish outlook for the Indonesian IT market is reflected in the latest consumer confidence survey released by Nielsen in July 2014, which found Indonesians to be the second most optimistic from a cross-section of 60 markets. This supports our forecast for the Indonesian IT market to be a regional out performer over the medium term   - with IT market growth expected to benefit from strong economic growth, a low PC penetration rate , enterprise and public service modernisation and an emerging middle class. Retail hardware, enterprise software and cloud computing are expected to be key drivers of medium - term growth.   However, there is short-to-medium term downside in Indonesia as vendors face depreciation of the rupiah, which has raised the cost of dollar denominated hardware and software imports, or required vendors to absorb the costs . In the immediate future, IT spending is forecast to increase to IDR 142.5 trn in 2014 , up 17.3% from 2013, with the IT market accounting for 1.4% of GDP .

Headline Expenditure Projections

Computer Hardware Sales: IDR 85.5 trn in 2014 to IDR 131.7 trn in 2018, at a compound annual growth rate (CAGR) of 12.2% in local currency terms. Growth boosted by deepening of the market as Android tablet vendors and Microsoft notebook vendors compete aggressively on price.

Software sales: IDR 23.9 trn in 2014 to IDR 43.7 trn in 2018, at a CAGR of 17.5% in local currency terms. Piracy is a major drag on software market growth, but despite this demand growth in 2014 will be strong as enterprise software deployments drive spending, with modernisation in the manufacturing, mining and tourism verticals offering the greatest opportunities to vendors.

IT Services Sales: IDR 33.1 trn in 2014 to IDR 56.0 trn in 2018, at a CAGR of 15.0% in local currency terms. Cloud service adoption remains low in 2014, but as telecoms infrastructure improves and end-user education levels increase cloud services are expected to gain...

Indonesia Information Technology Report Q3-2013

Excerpt from the article of 

Indonesia Information Technology Report

Indonesia - Q3 2013 Published Date: 01 Jul 2013

from Business Monitor International (BMI) 

The Indonesian IT market is forecast to be one of the outperforming markets globally in the medium term on the back of strong economic growth and an emerging middle class. Spending is expected to reach IDR 64.6trn  in 2013, up 16.3% from 2012. The retail market will be a major driver of growth, with PC penetration estimated at below 10% in 2012, meaning significant growth potential from first - time buyers and upgrades/personal devices. Continued strength in government spending will also support expansion of the market, boosting long-term growth potential.

Headline Expenditure Projections

Computer Hardware Sales: IDR45.9trn in 2013 to IDR65.4trn in 2017, at a CAGR of 10.4% in local currency terms. Rising incomes and the growing affordability of devices, combined with credit availability, will increase sales in the consumer segment.

Software sales: IDR7.8trn in 2013 to IDR13.0trn in 2017, a CAGR of 15.1% in local currency terms. Windows 8 sales will boost spending in 2013, although progress will depend on the success in bringing down illegal software use.

IT Services Sales: IDR11.0trn in 2013 to IDR17.2trn in 2017, with a CAGR of 13.1% in local currency terms. Forecast unchanged, with a key growth area being cloud services, which could be worth more than IDR12.1trn by 2017.

Risk/Reward Ratings: Indonesia's score was 47.5 out of 100.0. Indonesia remained in ninth position in BMI latest RRR table, below the Philippines but ahead of Thailand.

Key Trends

The tablet market is expected to experience rapid growth in 2013 as a wide range of low-cost Android-based tablets hit the market. Consumers have shown a clear preference for mobile computing devices, including netbooks and notebooks, but tablet adoption failed to take off prior to 2012 due the high price of devices, putting them out of reach for the majority of consumers. Higher specification devices are now becoming available at affordable prices, and, with PC penetration at under 10% in 2012, there is a large opportunity for tablets to be adopted as a first device, with consumers skipping ownership of a desktop or notebook. BMI believes OEMs from China, as well as local brands such as S Nexian will be the main beneficiaries of demand for low-cost devices. However, global vendors such as Acer have stated their intentions to target mid- and low-specification devices at the market in order to achieve growth.

Although the consumer story in Indonesia means the retail hardware market is set to remain the dominant theme in the Indonesian IT market, there are also opportunities for vendors to generate sales to the public and enterprise sectors. An active approach by the government to encourage IT development, led by the National ICT Council, should stimulate spending through a series of infrastructure and education initiatives. Meanwhile, according to government data, IT penetration in enterprises is low, particularly in the SME segment, representing a huge potential market. Modernization is driving spending on applications such as CRM, ERP and financial management in key sectors such as financial services, telecoms, utilities, government, retail and manufacturing.