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 Vision
“Transformation towards a
Knowledge Economy Society”
GOI Mission
 Growing the economy
 Job Creation
 Reducing Poverty

Indonesia @ Stage-1 of
IT Countries Development Stages
Key Indicators
# Local SW Companies: 250
# Prof Developers : 60,000
PC 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
PC Penetration
Policy
Govt.
Creative Economy
Developers Vertical Solutions
Indonesia
Students Public Sector
Supply Software Demand
Economy Software Services
Universities
Startups Funds
Incubate
Free tools

Government
• Clean Government and Good Governance
Policy • IPR laws and framework
• Technology neutrality
• Tax Structure for IT
Creative • Industry-aligned curriculum
• Creative IT startups
Economy • Incubation of business
Bridging • PC:Student Ratio is at 1:1900
• Microsoft trained 170,000 teachers touching 8,200,000 students
Digital Divide • Accessibility and Affordability

Supply: Human Resources
• Technical trainings in Jakarta and smaller towns
Empowering • GEEKS: Largest online developer community in Indonesia
• Localized content in Bahasa Indonesia
Developers • 25 Most Valuable Professionals (MVP) in Indonesia
Enabling • Imagine Cup: 8500+ students registered in Imagine Cup’09
• DreamSpark: Free tools to spark students’ creativity
Students • Students 2 Business: Get students ready for jobs
• Microsoft Innovation Centers: at UI, ITB, UGM & ITSN
Investing in • MSDN Academic: Subsidized licenses for universities
• Microsoft Student Partners: 20 MSPs across as many universities
Universities • Open System Interoperability Lab at UI

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
Govt IT Spend • eGovernment and eGovernance
Vertical Solutions • Build on Strengths
• Creative Industry, Oil&Gas, Agriculture, Manufacturing
for Industry • SMB Solutions
Microsoft • MSPP
• Partner Sales Management
Partner Program • $1 of Microsoft earning => $19 to local business partners

The journey so far…
Dec 2007 Mar Jul Aug Dec
Sep May
2008 May 2008 2008 Nov 2008 Feb 2008
Nat’l 2008 2008
2008 2008 Nat’l iMulai
Innov iMULAI IC Movie Dream MDC, IC
GLF iMULAI Innov Winner
Day Winner Finals Land Spark winner
Day
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

Aspiration: Development Stages
1 2 3 4 5 6 7
Philippines, Thailand, South Africa, Czech Republic, Korea, Belgium, Netherlands, Australia, United States,
Saudi Arabia, Turkey, Greece, Poland, New Zealand, Austria, Ireland, Denmark, Switzerland, United Kingdom,
Indonesia, Romania, Russia, Mexico, Spain, Taiwan, Brazil, Hong Kong, Norway, Israel, Sweden, Japan,
Vietnam Bulgaria, Egypt Malaysia, Portugal Singapore, China, Italy Finland Germany, Canada,
Hungary, India France
Key Indicator Typical Values
# ISVs 0 – 400 300 – 600 400 – 700 400 – 800 400 – 900 600 – 2,000 2,000+
# Prof Dev’s per
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
1,000 pop
PC Penetration
Piracy Rate
0% – 10%
60% - 80%
10% - 20%
60% - 70%
10% - 30%
40% - 60%
10% - 40%
30% - 40%
CALL TO ACTION
30% - 60%
20% - 40%
40% - 70%
20% - 30%
40% -70%
20% -30%
0% – 1% 0.5% - 2% 1% - 3% 1.5% - 4%
IT spend / GDP
1. Grow ISVs 3% - 4%
2% - 4% 3.5% - 5%
Education Few, if any, Limited use of Some technology in Technology usage in Heavy tech use in Widespread IT use in Widespread
universities offering technology in schools schools, limited to schools growing. Grow Developer
2. secondary schools; secondary schools and in technology usage in
CS or EE degrees large cities and elementary schools majority of elementary all schools
Few higher education IT use in most city
secondary schools Community
vocational schools. only in the city schools.
institutions offer IT-
related degrees Some CS or EE Major universities Most universities offer
Some CS or EE Strong supply of
graduates. Few of Increase PC penetration graduates.
3.
graduates. Few offer EE/CS degrees. both CS/EE degrees.
CS/EE
universities offering A few offer post- Post-graduate degrees
universities offering
both areas of study graduate degrees available at multiple
4. Reduce Piracy
both areas of study
universities.
Technology Technology in Technology in business Tech usage Technology usage Increase IT Widespread IT in M-L
5. Common IT use in M- Spend Widespread IT in M-L
business limited to limited to multinationals. penetrating into M-L penetrating more L domestic firms. sized domestic firms. domestic firms. Small
Usage
multinationals domestic firms. deeply into M-L Small bus. usage Small business usage business usage
domestic firms. beginning common common
Government Limited eGov Limited eGov adoption, eGov services for eGov services for Key eGov services, eGov services available; Robust eGov services
adoption, no online few online transactions internal use. Citizen- internal use. Citizen- but not broadly Some integrations across integrated across
Adoption
transactions facing transactions facing usage growing integrated across jurisdictions jurisdictions
limited jurisdictions
Investments Investment funds Majority of gov't Donor community Donor community Government, VC, & Robust investment Robust investment
from regional investment funds from fund investment fund investment very private investment infrastructure: Gov, infrastructure: Gov,
/multinational banks. donor community. No limited limited funds available foreign private foreign private
No private VC private VC investment, VC funding investment, VC
Gov investment exists Private VC available Foreign private
funding
and some private VC Foreign private investment
investments 11