Microsoft Reaches for Clouds With Indonesia Ambitions

Jakarta Globe, Shirley Christie | January 21, 2011

Software giant Microsoft is looking to invest around $2.5 billion in Indonesia to develop cloud-computing systems, an official said on Thursday.

Software giant Microsoft is looking to invest around $2.5 billion
in  Indonesia to develop cloud-computing systems, an official
said on Thursday. (AP Photo)    

Sutanto Hartono, chief executive of Microsoft Indonesia, said it was partnering with Telekomunikasi Indonesia (Telkom), Astra Graphia Information Technology, cloud-computing infrastructure firm Greenview and Infynis System Indonesia for the initiative.

Cloud computing, in which vast data banks and programs can be accessed remotely using a personal computer connected to the Internet, would be invaluable to the corporate market, he said.

“It’s going to be cost-saving and efficient because instead of spending on capital expenditure, a company would spend on operational expansion using cloud computing,” he said at the Microsoft Cloud Summit in Jakarta.

The best-known examples of cloud computing services are those offered by Google as well as Amazon, which launched S3, an online data storage service.

Cloud computing, essentially a network of servers, also allows users to access online applications anywhere in the world, often for a subscription fee, without having to install software on their own computers.

“Cloud computing is now the center of all the things we do,” said Chris Sharp, regional cloud strategist for Microsoft Asia Pacific and Japan.

He said among the 17 countries that he had managed so far, Indonesia posed a unique opportunity to generate about $75 million annually from cloud services within several years.

“It’s an evolution of virtualization,” said Arya Sanjaya, business developer manager for Intel Indonesia, referring to the system of separating computer functions from physical hardware.

“If a company used to have three servers to run three applications, with virtualization, it could run all three applications using one server,” Arya said.

Sutanto added that companies would no longer have to buy servers — computer systems that allow users in a network to access and store files — and hire technicians to maintain them.

“Now, all a company needs is a computer and a broadband Internet connection [to benefit from] cloud computing,” he said.

The cost of running a virtual server is small, Sutanto said. A small shop running inventory software from a public cloud can spend $300 on a computer and $15 a month for Internet and cloud service subscriptions.

Larger companies can create their own private clouds which can host all their applications.

But many local firms are reluctant to use cloud computing, still a relatively new concept in Indonesia, due to concerns about data security and effectiveness.

Still, government agencies and at least 14 big firms had expressed interest in cloud technology, according to Manish Chopra, Microsoft Indonesia’s marketing and operations director.

He cited the estimated 700 participants who flocked to the recent Cloud Summit, a roadshow for the new technology.

Chopra said he saw huge potential in this country with its more than 30 million online users, as of last year. Broadband access is also growing, with the penetration rate expected to reach more than 75 percent this year.

Brian Prentice, vice president for research at IT firm Gartner, said revenue generated from cloud services around the world were estimated to reach $68.3 billion last year, or up 16.6 percent from $58.6 billion in 2009.

“With an average growth rate of 20 percent, we estimate that by the end of 2014, this figure will increase to $148.8 billion,” he said.

Aside from Microsoft, other technology firms are linking up with Indonesian companies to set up cloud computing systems.

Last week, Telekomunikasi Selular (Telkomsel), a subsidiary of Telkom, said it was partnering with Google to launch Business Connect, a Web-based package.

It includes e-mail, instant messaging, office operation tools, a calendar and documents-sharing under Google Apps.

Doug Farber, Google Asia Pacific’s managing director for enterprise, said in a statement that the cloud-based applications would help boost business productivity in a way that standard applications could not.

Some of the advantages, he said, were larger data capacity, instant messaging enabled with voice and video chat, as well as the ability to access apps using mobile phones.

Sharp said competing firms offering cloud services would drive companies like Microsoft to develop better technology and products for customers.