Growing Indonesia’s Local

Software Economy

Tony Chen

President Director

26-May-2009

Disclaimer: Some data points in the presentation might be slightly dated, they are only for discussion purpose. Microsoft holds no responsibility for the accuracy of the data.

GOI Mission

Growing the economy

Job Creation

Reducing Poverty

GOI Vision

“Transformation towards a

Knowledge Economy Society”

Indonesia @ Stage-1 ofIT Countries Development Stages

Key Indicators# Local SW Companies: 250 # Prof Developers : 60,000PC Penetration: 4.0% Piracy Rate: 85% IT spend / GDP: 0.7%. Broadband penetration: 0.6%

Software Opportunity in Indonesia

• IDC report:

– ICT sector can create 81,000 jobs in 2009

– Contribute USD 12billion to GDP

• 110,000 science and technology graduates

every year

• 60,000 developers (IDC)

Growth Levers for

Indonesia Software Economy

Indonesia Software Economy

Govt.

Demand

Incubate

Supply

Policy

Universities

Students

Developers

Free tools

Startups Funds

Software Services

Public Sector

Vertical Solutions

Creative Economy

PC Penetration

Government

• Clean Government and Good Governance

• IPR laws and framework

• Technology neutrality

• Tax Structure for IT

Policy

• Industry-aligned curriculum

• Creative IT startups

• Incubation of business

Creative Economy

• PC:Student Ratio is at 1:1900

• Microsoft trained 170,000 teachers touching 8,200,000 students

• Accessibility and Affordability

Bridging Digital Divide

Supply: Human Resources

• Technical trainings in Jakarta and smaller towns

• GEEKS: Largest online developer community in Indonesia

• Localized content in Bahasa Indonesia

• 25 Most Valuable Professionals (MVP) in Indonesia

Empowering Developers

• Imagine Cup: 8500+ students registered in Imagine Cup’09

• DreamSpark: Free tools to spark students’ creativity

• Students 2 Business: Get students ready for jobs

Enabling

Students

• Microsoft Innovation Centers: at UI, ITB, UGM & ITSN

• MSDN Academic: Subsidized licenses for universities

• Microsoft Student Partners: 20 MSPs across as many universities

• Open System Interoperability Lab at UI

Investing in Universities

Incubate

•Microsoft BizSpark

•67 startups initiated in 6 months!

•USD 4million worth software offered

• iMulai

•Contest for national competitiveness in IT

•DyCode: Project Batam Port

•Empowerment of ISVs

•Portal to empower local ISVs

•Localized training programs & content

Demand for IT

• Procurement of ISV solutions

• eGovernment and eGovernanceGovt IT Spend

• Build on Strengths

• Creative Industry, Oil&Gas, Agriculture, Manufacturing

• SMB Solutions

Vertical Solutions for Industry

• MSPP

• Partner Sales Management

• $1 of Microsoft earning => $19 to local business partners

Microsoft Partner Program

Dec 2007

Nat’l InnovDay

Mar 2008

iMULAI

Winner

May 2008 GLF

Jul 2008

IC Finals

Aug 2008

Movie Land

Sep 2008

Dream Spark

Nov 2008

iMULAI

Dec 2008Nat’l InnovDay

Feb 2008 iMulai

Winner

May 2008

MDC, IC winner

ImagineCup: World’s Premiere IT Competition for Students – 200,000 students registered globally

4 Microsoft Innovation Center in ITB, ITS, UGM, UI and the 5th setting up in UPH

Partners in Learning – Trained 170,000 Teachers and reaching 8,200,000 Students

iMULAI –The Creative & Innovative competition – First in Industry

The journey so far…

11

Aspiration: Development Stages7

Key Indicator

654

Philippines,

Saudi Arabia,

Indonesia,

Vietnam

321

Thailand,

Turkey,

Romania,

Bulgaria, Egypt

South Africa,

Greece, Poland,

Russia, Mexico,

Malaysia, Portugal

Czech Republic,

New Zealand,

Spain, Taiwan,

Singapore, China,

Hungary, India

Korea, Belgium,

Austria, Ireland,

Brazil, Hong Kong,

Italy

Netherlands, Australia,

Denmark, Switzerland,

Norway, Israel,

Finland

United States,

United Kingdom,

Sweden, Japan,

Germany, Canada,

FranceTypical Values

0.1 - 0.4 0.3 - 0.6 0.5 - 1.5 1.0 - 2.5 1.5 - 4.0 4.0 – 7.0 4.0 – 7.0# Prof Dev’s per

1,000 pop

0% – 10% 10% - 20% 10% - 30% 10% - 40% 30% - 60% 40% - 70% 40% -70%PC Penetration

60% - 80% 60% - 70% 40% - 60% 30% - 40% 20% - 40% 20% - 30% 20% -30%Piracy Rate

0% – 1% 0.5% - 2% 1% - 3% 1.5% - 4% 2% - 4% 3% - 4% 3.5% - 5%IT spend / GDP

Few, if any,

universities offering

CS or EE degrees

Limited use of

technology in schools

Few higher education

institutions offer IT-

related degrees

Some technology in

schools, limited to

large cities and

vocational schools.

Some CS or EE

graduates. Few

universities offering

both areas of study

Technology usage in

schools growing.

IT use in most city

secondary schools

Some CS or EE

graduates. Few of

universities offering

both areas of study

Heavy tech use in

secondary schools;

elementary schools

only in the city

Major universities

offer EE/CS degrees.

A few offer post-

graduate degrees

Widespread IT use in

secondary schools and in

majority of elementary

schools.

Most universities offer

both CS/EE degrees.

Post-graduate degrees

available at multiple

universities.

Widespread

technology usage in

all schools

Strong supply of

CS/EE graduates.

Education

Limited eGov

adoption, no online

transactions

Limited eGov adoption,

few online transactions

eGov services for

internal use. Citizen-

facing transactions

limited

eGov services for

internal use. Citizen-

facing usage growing

Key eGov services,

but not broadly

integrated across

jurisdictions

eGov services available;

Some integrations across

jurisdictions

Robust eGov services

integrated across

jurisdictions

Government

Adoption

Technology in

business limited to

multinationals

Technology in business

limited to multinationals.

Tech usage

penetrating into M-L

domestic firms.

Technology usage

penetrating more

deeply into M-L

domestic firms.

Common IT use in M-

L domestic firms.

Small bus. usage

beginning

Widespread IT in M-L

sized domestic firms.

Small business usage

common

Widespread IT in M-L

domestic firms. Small

business usage

common

Technology

Usage

Investment funds

from regional

/multinational banks.

No private VC

Majority of gov't

investment funds from

donor community. No

private VC

Donor community

fund investment

limited

Gov investment exists

and some private VC

Donor community

fund investment very

limited

Private VC available

Foreign private

investments

Government, VC, &

private investment

funds available

Foreign private

investment

Robust investment

infrastructure: Gov,

foreign private

investment, VC funding

Robust investment

infrastructure: Gov,

foreign private

investment, VC

funding

Investments

0 – 400 300 – 600 400 – 700 400 – 800 400 – 900 600 – 2,000 2,000+# ISVs

CALL TO ACTION

1. Grow ISVs

2. Grow Developer

Community

3. Increase PC penetration

4. Reduce Piracy

5. Increase IT Spend