The Jakarta Post
US-based information and communication technology (ICT) company Hewlett-Packard (HP) is targeting customers from small- and medium-sized enterprises (SMEs) and the public sector in Indonesia, considering these market segments to be the nation's most robust.
HP senior vice president and general manager of Enterprise Group for Asia-Pacific and Japan, Jim Merritt, said his company views developing markets like Indonesia as an engine of growth.
'So, we are focusing mainly on SMEs and the public sector,' he said recently in Mumbai, during HP's Asia-Pacific and Japan (APJ) 2014 media summit.
Merritt said the SMEs in Indonesia were the biggest private sector market for HP products aside from commercial retail accounts and global companies. 'Just by size alone, the SMEs are growing rapidly,' he said.
According to data from Indonesia's Cooperatives and Small and Medium Enterprises Ministry, the SMEs account for nearly 90 percent of all businesses in the country. They also provide 97.2 percent of domestic employment and contribute 57.9 percent to the country's gross domestic product (GDP).
He said global markets were very competitive because many of HP's competitors, companies like IBM and Dell, also targeted them. 'Instead of having 100 global enterprise customers, it is better to have 25,000 customers from SMEs,' he said.
According to Merritt, it is very difficult for most companies to accommodate 25,000 customers. However, HP is capable of doing so because of a strong partnership ecosystem that allows it to scale all the way down to the SMEs.
He said many of the SMEs were engaging with HP to help modernize infrastructure and assist transitions to cloud computing.
Cloud services basically offer companies access to data and programs over the Internet, offering significant savings for installing on-premise software, big-data storage or other supporting hardware.
In order to cater to the SME customers, HP launches products that cater to their needs. One example is the HP Officejet 7612 wide-format all-in-one printer that enables the SMEs to produce their own brochures and pamphlets.
'HP is committed to providing effective and cost-saving printing solutions for small- and medium-sized enterprises,' said Leong Han Kong, vice president of the printing system, HP APJ.
Leong added that because the SMEs were very sensitive to cost, the printer was affordable, priced at less than US$300.
Merritt said Indonesia was now also intensifying efforts to build and improve infrastructure in many sectors like healthcare, education and transportation. 'The development in public services is an enormous opportunity for us to grow so that we can establish our brand in Indonesia,' he said.
Both local administrations and ministries are now shifting to the ICT-based system for providing public services. The Jakarta city administration, for example, is starting to use electronic-budgeting and online tax collection.
Merritt said that although the public sector market was slowing down because of the political situation, he believed that it would become robust once a new president was officially announced.
The International Data Corporation (IDC) Indonesia expects that ICT spending in the country will reach US$16.8 billion by the end of 2014, reflecting a 12.5 percent increase from 2013. Hardware is expected to remain the priority purchase, accounting for up to 86.9 percent of total estimated spending.
The IDC predicts spending on IT services and software, the next two biggest purchases, will constitute 8.6 percent and 4.4 percent of spending, respectively.
Merritt said the biggest challenge facing IBM was a shortage in skilled labor. 'Our business is very competitive and very technical. We have to have rich talent and strong leadership in order to manage the business' many aspects,' he said.
He added that his company had created an early hiring project with colleges to help address the shortage. 'We are hiring much younger people to come into the company so we can improve their loyalty to the company,' he said.
Merritt said it was a common challenge, especially in developing markets like Indonesia, Philippines and Thailand.
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