The Dynamics and Future of Cloud Based Software in Indonesia

The Dynamics and
Future of Cloud-Based
Software in Indonesia
1
List of Contents
Preface 1
Why businesses need cloud-based software 2
The SaaS industry in Indonesia 7

Anticipating the future of cloud-based software in
16
Indonesia
Results of the survey 25
General guidelines for SaaS implementation 33
1
SaaS is a crucial foundation
for business in the era of
Industrial Revolution 4.0
1
Chapter 1: Preface
Software as a service (SaaS) has emerged

as a crucial part of Industry 4.0. SaaS enables
businesses to digitally transform by adopting
cloud-based software easily and rapidly.
Once integrated, these digital solutions
promote automation, efficiency, and
operational productivity. This, in turn, allows
businesses to make headway into the next
phase of their development - essential in the
face of profound market obstacles.
CEO Mekari,
Suwandi Soh
More companies are recognizing the value In the future, artificial intelligence will have
of SaaS, and leading its adoption are a pivotal role in enhancing SaaS solutions
businesses with fast-paced operations. for businesses. Cloud-based software
For instance, firms in the retail and F&B embedded with AI will be more capable
industries are applying these solutions of analyzing data, optimizing repetitive
to modernize their finance processes. processes, and improving efficiency. We
Elsewhere, manufacturing and logistics anticipate that all significant developments
businesses are using SaaS solutions to in the Indonesian business landscape will
digitally transform while staying asset-light. be built on a foundation of SaaS solutions.
As interest in cloud-based software

increases, SaaS providers should continue
introducing innovative features designed
to drive growth in businesses ranging
from small-scale enterprises to larger
corporations. SaaS providers also need to
provide additional support such as digital
skills training, which helps optimize the
use of their solutions.
Dynamics and Future of Cloud-Based Software in Indonesia
1
Why businesses need
cloud-based software
Why businesses need
In need of cloud computing
The global adoption of cloud-based software is expected to keep increasing, according
to insights from Gartner. The tech research and consulting firm predicts that as many
as 80% of companies worldwide will switch from on-premise data centers to
cloud-based software by 2025.
The Gartner report defines cloud-based software as the programs that operate through
cloud computing. Meanwhile, SaaS refers to the business model providing access to
cloud-based software.
World SaaS Spending Predictions

(in US$million)
250.000
200.000
150.000
100.000
50.000
2020 2021 2022 2023 2024
Source: Gartner, 2023
2
Chapter 2: Why businesses need cloud-based software
The adoption of cloud-based software is also on the rise in Indonesia, as illustrated by our
survey of more than 100 chief experience officers (CXOs) in the country.
Levels of cloud-based software adoption

Percentage
64% 19% 17%
Have adopted cloud-based software Plan to adopt cloud-based software

No plan yet to adopt cloud-based software
Source: Mekari and Tech in Asia Survey, 2023
One company that has benefited from Budi also emphasized the importance
adopting cloud-based software is Tunas of standardizing processes to maintain
Jaya Sanur. The contractor services firm, quality and integrity, especially given the
which has been operating for 44 years, company’s numerous projects across
started its shift to the cloud in 2018 as it Indonesia. Cloud-based software has
aimed to boost its business performance enabled this standardization, with the
and prepare for a stock market listing. same operational system connecting all
of the company’s offices and branches.
According to I Made Budi Atmika, CEO
of Tunas Jaya Sanur, the technological For example, procurement data from Bali
transformation has empowered the can be synchronized with the same data
company to leverage the most up-to-date from Jakarta. The cloud-based software
market data to make precise and allows the project team leader to access
informed business decisions. all of this data anywhere and at any time.
3
Cloud-based software facilitates three

main areas of business:
Scalability and adaptation

To achieve both, companies need to efficiently expand their businesses while
ensuring that fundamental aspects such as cash flow remains stable.
Smooth business expansion

Cloud-based software reduces the need for IT infrastructure, allowing
1 companies to set up new branches with just laptop computers and an
internet connection.
Responsiveness to market changes

By generating data necessary for analysis and insights, cloud-based
software helps companies become more responsive and attuned to
2 market changes and customer behavior. As a result, companies can
make swift and accurate decisions based on prevailing economic
conditions.
Variative pricing and features

Cloud-based software offers flexible subscription packages. This allows
3 businesses to manage subscription fees based on their actual needs
instead of making quenstionable long-term investments.
Innovation acceleration
Innovation is what distinguishes a company from its competitors, helping it
navigate uncertainties and improve revenue sources.
Focus on the core business

Delegating a major portion of IT infrastructure management to service
1 providers gives companies more time and resources to dedicate into
their core businesses.
4
Stronger collaboration
2 Every team member can access the same data from anywhere, enhancing
collaboration.
Culture of innovation
Cloud computing allows companies to automate repetitive business
3 processes. This frees up employees' time to engage in more critical
problem-solving.
More R&D support

Using cloud-based software reduces operational and tech investment
4 costs, allowing companies to allocate resources to other high-value
areas such as research and development.
Speedier deployment of new tech

For instance, if a cloud-based software provider has integrated AI into its
5 product, companies could immediately harness this tech without spending
time and money to implement it themselves.
Efficient and effective processes

Cloud-based software helps businesses operate efficiently and effectively by
ensuring the seamless execution of business processes. As a result, businesses
can stay competitive and quickly implement changes.
Data centralization
Cloud-based software can serve as a data center, providing granular
1 access tailored to different needs. Eliminating doubts about data integrity
improves synchronization and collaboration among team members.
5
Cost reduction
Because of its asset-light nature, cloud-based software tends to have a
lower total cost of ownership.
Lower initial investment compared to developing technology
in-house
2
No need to purchase servers or supporting hardware (except
computers/laptops)
No costs to maintain server data maintenance or to fix bugs
Flexible fees, as most cloud-based software subscriptions can be
shared by up to five users and customized for specific needs
Swift implementation
Given how cloud-based software requires nothing more than computers/
3 laptops and an internet connection, implementation can occur quickly.
New users can start working within minutes after setting up their accounts
and all team members can directly access new features from anywhere.
6
The SaaS industry in Indonesia
The SaaS industry
in Indonesia
Indonesia’s SaaS industry has grown rapidly over the past few years. Its market share is
estimated to have reached US$100 million in 2018 and is projected to grow at an annual
rate of 31.9% to US$400 million by 2023.
Not only has the industry attracted global players, but local SaaS providers are also keen
on being a part of this momentum. A variety of startups have emerged to offer digital
solutions in Indonesia, targeting a wide range of users that includes microbusinesses,
small and medium-sized enterprises, and large corporations.
Tech in Asia’s database shows that as of July 2023, there are at least 193 SaaS startups
in Indonesia, offering 12 types of services to businesses. The number of providers is
likely to grow, given how these startups are securing funding from investors.
Number of SaaS players

by category:
Management
Software 39
POS 31
HRIS 25
OmniChannel 17
Chatbot 15
ERP 12
Accounting 11
Web Hosting &

9
Ecommerce
CRM 8
Marketing 5
Analysis 5
Others 16
Source: Tech in Asia, 2023
7
Chapter 3: The SaaS industry in Indonesia
SaaS startups in Indonesia have encountered some ups and downs in terms of funding
value and frequency over the past few years. Funding hit its peak in 2021, with 31
deals amounting to US$416.8 million in total.
There were 13 deals made in 2022, bringing in a total of US$158.8 million. This year,
five deals have been recorded as of May, raking in US$8.4 million in total.
History of SaaS funding in Indonesia

(in US$million)
416.75
314
158.8
7.82 62.83
0 0.04 2.87 9.57

8.35
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
(until May)
Source: Tech in Asia, 2023
The decline in funding for SaaS startups can be attributed to the global economic
slowdown, which has resulted in a tech winter. Consequently, venture capital firms
are more cautious when making investments.
Despite this, SaaS providers are likely to continue their growth as businesses become
more aware about how cloud-based software can benefit them.
8
Challenges of SaaS adoption

While the majority of Indonesian companies have recognized the value of cloud-based
software, most providers need to address issues around a more seamless adoption process.
From February to April 2023, Mekari and Tech in Asia surveyed more than 100 CXOs in
Indonesia and identified some of these hurdles:
Challenges of adopting SaaS
Percentage
High investment cost

52
No managerial support
45
Lack of talent
42
No benefits
36
Data security problems

30
Access to infrastructure
30
0 5 10 15 20 25 30 35 40 45 50 55
1. For 52% of non-adopter respondents, investment costs are a significant concern.
In the initial stages of their business, a majority of the survey respondents considered
the cost of investing in cloud-based software prohibitively high. As many as 50% of
non-adopter respondents said they have fewer than 50 employees and earn an annual
revenue of less than 300 million rupiah (around US$19,000).
9
Further research shows that high costs, particularly for the application of cloud-based
software, is influenced by the following factors:
Companies’ previous use of free applications
Companies’ understanding of opportunity costs without applying
Companies’ understanding of the return on investment (ROI) from
using such software
2. The lack of talent is a problem for 42% of non-adopter respondents.
The 2023 Asia Pacific Digital Skills Study surveyed more than 30,000 employees
across 19 countries in the region. Conducted by Gallup and Amazon Web Services,
the study made significant findings about the digital skills of workers in the region.
Digital skills of Indonesian employees

Percentage
73% 13% 7% 7%
No digital skills Basic digital skills Intermediate digital skills Advanced digital skills
Source: AWS Asia Pasific Digital Skill Study, 2022
3. There were 36% of non-adopter respondents who believe that there

are no financial benefits or advantages to SaaS adoption.
This finding shows that cloud-based software providers need to continue educating
the market.
On the other hand, 42% of respondents who have adopted cloud-based software said
they have calculated their company’s ROI. Among them, 45% indicated an ROI level
approaching 50%, while 27% reported having nearly 100% ROI.
This means that the majority of software users feel the benefits of using cloud-based
software.
10
4. Around 30% of non-adopter respondents do not have access to the

right infrastructure to support these solutions.
Fundamental infrastructure such as hardware and relational databases are necessary to
facilitate the successful adoption of cloud-based software, but some companies don’t have
access to them.
5. Data security is a concern for 30% of non-adopter respondents.

On the customer side, adopting cloud-based software comes with several risks, such as:
Loss or leakage of company data,

Unlicensed access or a potential hack of user accounts due to the software’s
connection to the internet,
Unsecured application programming interfaces (APIs) potentially creating
unauthorized access to sensitive data
A shadow IT system - apps, devices, and services accessed and used by
employees without the knowledge or supervision of the IT and legal teams
Outsourcing vulnerability management to anticipate and protect against
cyberattacks
Third-party risk management: Companies should conduct third-party
assessment to evaluate and measure any risks that might occur due
to third-party actions.
Responsibility allocation: Companies new to cloud-based software might
have a lack of fundamental understanding of the shared responsibility model
between the users and cloud-based software providers.
11
Addressing hurdles to SaaS adoption and educating

companies about hidden costs
Fundamentally, implementing cloud-based In line with this, a study by the SMB Group
software helps companies in terms of cost found that software licensing cost in the
and time. In this context, cost refers to on-premise model accounts for only 23% of
the total ownership cost and business a company’s total expenses. This means all
opportunities from reinvesting the supporting application costs - such as
cost savings. machines/hardware, specialized staff,
maintenance, and training - are three
For example, a system that applies an
times larger than the application cost itself.
on-premise server would require a
special room and IT personnel to carry In contrast, the study found subscription
out maintenance, develop new features, fees for cloud-based software account for
or address daily issues. All these efforts 85% of the total expenses. The remaining
require quality assurance, which requires costs come from training expenses and
time and incurs additional costs. customizations, if available.
Cloud Based Software On-Premises
Software Lisence
Subscription Fee
Implementation &
Customisation Hardware
Implementation &
Customisation IT Personnel
Training Maintenance
Training
Ongoing Cost
• Subscription Cost
Ongoing Cost
• Apply fixes, patches, upgrade
• Performance tuning
• Rewrite customizations
• Rewrite integrations
• Renew support systems
• Maintain/Upgrade hardware
• Maintain/Upgrade network
• Maintain/Upgrade security
• Maintain/Upgrade database
12
In addition, upgrading on-premise IT As a result, the ownership cost can be lower

systems typically requires a large amount in the long term. Companies can allocate
of upfront costs. When server capacity the remaining operational costs into more
becomes insufficient, the IT team will productive efforts, which in turn enhances
need to invest in infrastructure. However, the resilience of the business.
the costs often do not scale well with
how these systems are used.
Cloud-based software can address this

issue because capacity can be increased
as needed - for example, if the company
wants to add one more user to the
subscription plan.
13
Security assurance
The ability to patch security vulnerabilities Mekari CEO Soh said that users from
promptly is crucial in determining how large companies usually need cloud-based
secure a system is. Another factor is software to customize security and data
whether there are team members privacy measures based on the needs
assigned to monitor data security daily. of their organization.
In general, SaaS providers have a special

team responsible for monitoring software
security. As such, they are likely to perform
regular updates and continuously patch
“Implementing a robust
security vulnerabilities. security system and data
privacy is the top priority
Furthermore, providers adhere to
standardization and certification
of SaaS providers, not
processes in compliance with ISO only to safeguard
27001, which governs data security. business sustainability
Businesses using on-premise servers but also to ensure their
find this challenging due to resource
ability to serve the market
constraints and different priorities.
in the long term,” he added.
14
Finding talent with digital skills

Also, SaaS providers typically offer
A 2018 World Bank report found that relevant training programs for corporate
from 2015 to 2030, Indonesia faces a employees, aimed at facilitating the
shortage of approximately 9 million adoption process.
semi-skilled and skilled digital talent.
To plug this gap, the country should These programs are designed not only
train an average of 600 thousand to boost employees’ tech capabilities
digital workers annually. but also to develop their mindsets.
As cloud computing becomes more Soh also acknowledged how human

popular in Indonesia, the demand for resources (HR) plays an important role
skilled talent is on the rise. Therefore, in tech adoption. To address the digital
professional roles in cloud architecture, talent shortage, Mekari has undertaken
cloud security, cloud infrastructure several initiatives:
management, and cloud development
are pivotal. Providing consultation and support
in the early stages, assisting with
Recognizing the digital talent shortage, implementation when solutions are
the government - particularly via the deployed, and offering post-sales
Ministry of Communication and services to help users troubleshoot
Information - has undertaken several problems
initiatives. One such project is the Digital
Talent Scholarship (DTS) program, which Establishing Mekari University, a
provides intermediate-level training in professional training platform
cybersecurity, AI, cloud computing, designed for business professionals,
and other skills. Since it was launched employees, and students. It offers
in 2018, DTS has trained a total of dozens of certified courses and has
223,000 workers. already helped thousands of
participants.
15
Anticipating the future of
cloud-based software in Indonesia
Anticipating the future of
cloud-based software in
Indonesia
The use of cloud-based software has become commonplace for many companies in
Indonesia. A majority of respondents in the survey conducted by Mekari and Tech in Asia
plan to expand their adoption of the tech in their respective businesses.
A total of 42% of respondents plan to apply cloud-based software to more than 75% of
their company’s business processes. Meanwhile, 33% of respondents intend to apply it
for 51% to 75% of their core businesses.
The respondents were also asked about which of their companies’ business processes have
already adopted cloud-based software. These include:
HR management - 12 percent.
Finance and bookkeeping - 11 percent.
Customer relationship management - 10 percent.
Document management - 10 percent.
Business analytics - 9 percent.
Business processes where cloud-based software has been applied
10% 11%
10%
12%
9%
48%
Human resources management Others entries Business analytics Document management
Customer relationship management Finance and bookkeeping
16
Chapter 4: Anticipating the future of cloud-based software in Indonesia
Meanwhile, respondents believe that the following business processes will see demand
for cloud-based software increase in the next three years:
HR management - 13 percent.
Business analytics - 13 percent.
Customer relationship management - 13 percent.
Finance and bookkeeping - 11 percent.
Document management - 10 percent.
Business processees where cloud-based software could be applied
10% 11%
13%
13%
11% 13%
10%
40%
HR management Other entries Document management Finance and bookkeeping

Customer relationship management Business analytics
Source: Source: Mekari and Tech in Asia Survey, 2023
The level of cloud-based software adoption

These figures show that many Indonesian companies are already using cloud-based
software in some form. Indeed, 79% of respondents have used more than one
cloud-based solution for their businesses, with 10% using more than five.
How many cloud-based software are used?
Number of software
21% 55% 14% 10%
1 2-3 4-5 >5
Source: Mekari and Tech in Asia Survey
17
Tech in Asia interviewed three companies that have integrated cloud-based software into
their operations to gain insights on the benefits of the tech. These companies are:
Rata: a technology-based dental health startup;

Tunas Jaya Sanur: a construction company based in Bali; and
BLP Beauty: a cosmetics brand
Case study 1
10% 11%
Rata is a dental health startup that “Technology at Rata is about data

provides clear aligners. It was management that affects customer
founded by Edward Makmur (CEO), experience. If our aligner production
Danny Limanto (COO), Jason Wahono was manual, the business would
(CFO), and Deviana Maria Anastasia not be able to scale,” Anastasia
(CMO). The startup aims to address explained.
dental aesthetic issues through the
use of AI.
Annually, Rata allocates approximately
Since its establishment in 2019, Rata has 10% of its operational budget for IT
been integrating cloud-based software purposes. The company also conducts a
into its daily operations. The company periodic evaluation to determine whether
currently uses these solutions - including the cloud-based software it uses aligns
those offered by Mekari - for processes with its goals as well as to plan any
such as payroll, HR, finance, and cashier additional technology investments.
recording. In addition, the firm uses an
enterprise resource planning (ERP) The firm intends to expand its use of
system to manage its customers’ cloud-based software to customer
55%
medical records. relationship management (CRM)
processes.
18
Case study 2
10% 11%
Tunas Jaya Sanur is a construction In 2018, the company made a more

company established in 1978. significant investment in technology by
Headquartered in Bali, the company establishing an internal IT team to
also operates branch offices in Jakarta, develop an integrated project
Mataram, and Batam. The company management system (IPMS) that
manages private projects such as oversees the company’s ongoing
hotels and resorts as well as projects. In addition, the company
government projects such as regional adopted Mekari’s Talenta solution
public hospitals. The firm initially during the pandemic for its HR needs.
adopted tech solutions for flood
control and marketing.
“Today, everything reflects speed,
precision, and accuracy. Speed is vital
in decision-making. To make quick
decisions, they should be backed up
by accurate analyses supported with
reliable data,” said I Made Budi Atmika,
CEO of Tunas Jaya Sanur.
55%
19
Case Study 3
10% 11%
BLP Beauty is a cosmetics brand During that time, the company used
founded by Elizabeth Christina cloud-based software to connect all
Parameswari, better known as Lizzie manual operations, including sales and
Parra. Operating under Lizzie Parra finance. The company began integrating
Kreasi, the retailer has more than 170 the tech into its operations for its scaling
stock-keeping units (SKUs) and efforts - it has plans to bring in more
employs over 100 people. SKUs, set up more offline stores, and
reach more customers.
In the beginning, BLP Beauty primarily
relied on its website as a sales channel.
At the same time, the company recorded “One of our motivations is to provide
its sales manually. The company started a seamless experience for our
adopting cloud-based software offered customers. This is reflected in how
by Mekari for accounting and HR we can integrate everyone’s data
purposes in 2018. and profile into our system. We know
that our customers collect loyalty
Technology implementation was one of
points, so that’s why we are still
BLP Beauty’s focuses from 2021 to 2022.
looking for the right tool,” explained
It has also been developing an ERP
Adinda Ayu Ristiyani, CFO of BLP
system since 2021 to manage its
Beauty.
expanding range of SKUs and
55%
sales channels.
20
The benefits of cloud-based software
Rata PT Tunas Jaya Sanur BLP Beauty
Using cloud-based The presence of Various cloud-based

software that cloud-based software applications
can seamlessly software that are used to link
integrate with other manages a database the company’s
applications has the of construction operational and
potential to create material pricing finance divisions,
cost savings for assists the company which used to be
Cost saving the company’s in procuring the managed manually
operational expenses materials at the most and lack integration.
compared to using competitive prices This has resulted in
non-integrated for its projects more organized data
software. across Indonesia. management and
improved.
Cloud-based Several cloud-based Among other

software enables software applications solutions,
the company's are used to assist the cloud-based
operations to be company in scaling software is helping
more efficient and up its business and the company prepare
allows it to scale. preparing sound to handle larger sales
Scaling up financial reports. volumes in 2023.
This all helps in the
company’s plan to
go public.
The company uses The company uses an The company

cloud-based IPMS to oversee its plans to adopt
software to manage ongoing projects. omnichannel
customers’ medical This helps it provide cloud-based
records, which in its clients with software soon.
turn enhances the assurance This will assist in
user experience. of consistent the integration of its
project quality. client profile data
Quality of from both online
service and offline sales
channels. As a result,
the company will be
able to offer a
seamless experience
to its customers.
21
Artificial intelligence and machine learning

Generative AI and machine learning are predicted to play a crucial role in the cloud-based
software industry. Solutions that use both technologies can provide more advanced
analytical abilities, optimize routine tasks, and offer more personalized experiences
for customers.
A study conducted by Bloomberg Intelligence revealed that the market value of genAI rose
96% from US$40 billion in 2022 to US$1.3 trillion in 2023.
In the following decade, this industry is projected to have a compound annual growth rate of
42%. During this period, genAI products have the potential to bring in more income for SaaS
firms that use the technology - up to US$280 billion - driven by products such as virtual
assistants, infrastructure stacks, and programming co-pilots.
Generative AI revenue is set to reach US$1.3Trillion in 2023

(in US$million)
Generative AI as a percentage of total technology spend

30%
Generative AI revenue (in US$ billions)
1304
25%
1079
897
20%
728
15%
500 548
12%
399 11% 10%
10%
304 9%
8%
217
7%
4% 6% 5%
3% 5%
0
30
23
32
24
29
28
25
22
27
31
21
2
20
20
20
20
20
20
20
20
20
20
20
20
Source: Bloomberg Intelligence, IDC, 2023
22
GenAI development has garnered increasing global attention, particularly following the
launch of ChatGPT, developed by OpenAI.
“AI is about to revolutionize cloud-based software due

to its capacity to streamline processing workflows and
elevate the user experience. It can also make cloud-based
software more efficient, secure, and customized,” said
Mekari CEO Soh.
He also mentioned other ways AI can support cloud-based software:
Predictive analytics: AI’s ability to collect, analyze, and derive insights from big
data will assist users in uncovering patterns in market or consumer behavior.
Moreover, companies can analyze data with AI to predict future trends.
Automation: AI will assess repetitive tasks, such as data entry and report
making, as well as take over these processes, allowing users to focus on
high-value or creative assignments.
Cost savings: By streamlining workflows, AI makes cloud-based software

cheaper and more efficient.
Customization: AI-based algorithms can analyze user data and design
interfaces or services tailored to their needs.
Soh explained that Mekari leverages AI through its Mekari Airene initiative. This enables the
company to use natural language processing to analyze consumers’ emotions based on the
messages they send to the customer service team. As a result, AI can recommend more
precise responses, allowing the firm to serve consumers better.
“Mekari will continue to develop Mekari Airene in line with AI development and companies’
interest in harnessing AI capacity. This encourages all industries to integrate AI technology
into their daily workflow. This presents an opportunity for all cloud-based software
providers to develop their respective products,” he added.
23
Data integration
The ability to provide seamless integration processes into other devices and systems is a
critical consideration for cloud-based software. This enables companies to maximize the
data gathered from different software solutions without the need for manual input.
Cloud-based software integration involves using APIs to link applications with one another.
Once two cloud-based software products are connected, they will be able to transfer data
to each other.
There are many reasons why cloud-based software integration has become necessary:
Transparency
Time saving
Improved customer service
Minimal human errors
Data centralization
These considerations are significant for Rata’s Anastasia when selecting a cloud-based
software provider for the company. In addition to cost and the presence of a customer
service team, she also considers the flexibility of a cloud-based software provider for
conducting data integration.
“What matters is the ability to integrate. Customization is a part of the integration process
as there is a possibility for several similar businesses like mine or other startups that require
customization and integration into our system,” she said.
Soh explained that the ability of cloud-based software solutions to access data facilitates
the process of data synchronization, enabling the automation process.
“Application integration will also sharpen the operational scalability of the company.
Updating or enhancing the use of one application will encourage updates or enhancements
in the use of other applications, allowing each company to quickly elevate the support
level they harness from cloud-based software,” he explained.
24
Results of the survey
Results of the survey
We surveyed more than 150 companies across the agriculture, education, fintech, and
ecommerce sectors, among others, from February to April 2023.
Approximately 31% of these companies are in the small-scale category with annual
revenues of less than 300 million rupiah (US$19,000). Meanwhile, 19% of respondents are
in the medium-sized category, which have annual revenues between 300 million rupiah
and 2.5 billion rupiah (US$157,000). In terms of workforce, 51% of respondents employ
fewer than 50 people, while 17% have a headcount between 100 and 300.
Number of employees in surveyed companies
Percentage
51% 13% 17% 6% 5%
under 50 people 50 - 100 people 100 - 300 people
701 - 1000 people more than 1000 people others
Annual revenues of companies

Percentage
31% 19% 13% 10% 13%
300 million rupiah annually 300 million-2.5 billion rupiah 2.5 billion-15 billion rupiah
15 billion-50 billion rupiah 50 billion-250 billion rupiah >250 billion rupiah
The survey results reveal varying levels of cloud-based software adoption, shown in
detail in the following infographics.
25
Chapter 5: Result of the survey
Non-adopter
Only 4% of respondents do not see any benefit to adopting cloud-based software and
believe that it is not at all important in achieving business goals. Another 4% of
respondents have neutral views regarding the tech.
How important cloud-based software is for business goals

Percentage
4% 54% 38%
Very unimportant Unimportant Neutral
Important Very Important
Impact of the recession

The macroeconomic condition of Europe under the economic recession, the tech winter,
and the ongoing phenomenon of mass layoffs in both the Indonesian and global startup
ecosystems have caught the attention of the respondents. According to the survey, 36%
expressed concern about these issues while 8% are extremely worried about them. A
majority of respondents held more positive views, with 31% feeling it is business as usual
and 22% not being worried.
In response to these issues, 19% of respondents plan to reduce their operational costs,
18% look to control their company’s cash flow, and 16% intend to change the types of
services that their firms offer.
How concerned are you with the recession issue
Persentase
22% 31% 36% 8%
Very Unworried Unworried Neutral Worried Very Worried
26
Actions businesses plan to take to face the recession

Percentage
19% 18% 16% 15% 14% 18%
To reduce operational costs To control the company’s cash flow To alter the services the company offered
To replace business strategy To search for new funding Others
Meanwhile, only 9% of respondents have no plans of increasing their spending on

cloud-based software. On the other hand, 48% of respondents intend to increase
their investments in cloud-based software by up to 25%, while another 26% plan to
boost their spending on the tech by up to 50%.
Planning to increase spending on cloud-based software
Percentage
More
0 25% 50% 100% than
100%
0 25% 50% 100% More than 100%
This implies that the majority of respondents will keep prioritizing investments in
cloud-based software amid the ongoing economic recession.
Respondents also had different views regarding the impact of the recession on their
consideration to adopt cloud-based software for their businesses. More than half of
them (51%) said that the recession affected their decision to use the tech. Further
breaking this down, 37% acknowledged the recession’s influence and 14% said that
it was a major factor in their decisions.
Meanwhile, 37% of respondents see things as business as usual, while 12% said the
recession was not a consideration in their decision to use cloud-based software.
27
The influence of recession issue on the use of cloud-based software
Percentage
12% 37% 37% 14%
No influence It is business as usual Some influence Great influence
Why businesses use cloud-based software

Among respondents’ reasons for adopting cloud-based software, the most common one
is to mitigate business risks, with 20% of the respondents saying so. This is followed by
cost savings, which was pointed out by 18% of the respondents.
Other reasons shared by respondents include enhancing business competitiveness

with automation (15%), reducing time-to-market with faster internal processes (14%),
and increasing company stability (13%).
Why businesses adopt cloud-based software
To reduce business risks 20%
To save costs 18%
To improve business competitiveness

15%
through automation
To reduce time-to-market with faster

14%
internal processes
To improve company/business stability 13%
Others 20%
0 20 40 60 80 100 120
28
Key factors in selecting cloud-based software

In selecting cloud-based software to support their businesses, respondents primarily
considered two factors: security assurance and ease of use. These were followed by
service quality and the features offered within the software. Other supporting factors
included affordability and the provider’s reputation.
Key factors influencing businesses in selecting cloud-based software
Percentage
Features
51
Provider reputation
49
Service quality
49
Ease of use
48
Security assurance
43
Affordability
40
0 5 10 15 20 25 30 35 40 45 50 55
29
Adopter
The maturity state
In adopting cloud-based software, there are at least four stages of maturity that
companies can be categorized into:
Transformation
Optimization stage
Adoption stage
Awareness stage
the most mature stage,
stage when companies have when companies have
implemented the use optimized the use of
when companies when companies of cloud-based cloud-based
start to recognize begin adopting software while software and
the benefits of cloud-based software attempting to transformed their
cloud-based software optimize it business processes
Based on how long the In terms of the number As for the utilization
companies have used of cloud-based software level, 55% of respondents
cloud-based software, applications, 56% of are in the optimization
53% of respondents respondents have used stage because they have
are in the awareness one to three applications, used more than 50% of
stage, wherein software so these firms are in the cloud-based software
has been in use for one adoption stage. features.
to two years.
The survey also reveals that more companies are poised to mature in terms of their
cloud-based software usage - 44% of respondents are predicted to hit the transformation
stage soon as they will have incorporated the software in 75% of their business processes.
Percentage of business processes using cloud-based

software in the next three years
Percentage
4% 19% 33% 42%
25% 26% - 50% 51% - 75% >75% >100%
30
Impact of cloud-based software on businesses

Not all respondents calculate their ROI after using these solutions. More than half (58%)
have yet to do so for the following reasons:
Reasons for not calculating ROI of cloud-based software
Not knowing how to calculate it 44%
Not yet a priority 38%
Too early to do so 18%
0 10 20 30 40
Therefore, software providers need to educate companies on how to evaluate and

measure the performance of the cloud-based software they use. In this context,
knowing how to calculate the ROI can facilitate companies’ adoption of these solutions.
Has your company calculated the ROI it got from

using cloud-based software?
Percentage
42% 58%
Yes No
31
Among the respondents who chose yes, 43% said their ROI has approached 50%.
Meanwhile, there are 29% with a nearly 100% ROI. However, 22% of respondents have
not fully reaped the benefits of using cloud-based software, only achieving an ROI of
less than 25%.
The amount of ROI earned
Percentage
22% 43% 29% 6%
Less than 25 % Approaching 50% Approaching 100% Higher than 100%
Perspectives on cloud platform security

Among the respondents, 47% believe that it is very important for the provider to ensure
the security of the cloud-based software, especially in terms of data protection. A further
39% consider this to be important.
This comes as no surprise considering the numerous data breach cases in Indonesia.
The Personal Data Protection Law, enacted in 2022, is expected to enhance the
protection of personal data and prevent more data breaches.
How important is the security of the cloud-based software?
Percentage
5% 5% 4% 39% 47%
Very unimportant Not very important Neutral Important Very important
32
General guidelines for
SaaS implementation
General guidelines for
SaaS implementation
Four signs a business needs cloud-based software
The decision to adopt cloud-based software is not a yes-or-no question but a matter of
when, particularly if the company is growing rapidly. Company leaders around the world
agree that the key benefit of utilizing cloud-based software is a boost in efficiency.
The role of cloud-based software extends beyond streamlining operational activities as

businesses scale their processes and teams. It also serves to sustain growth momentum
by freeing teams from repetitive and time-consuming tasks that add little value.
These four factors indicate a business needs to adopt cloud-based software:
Rapid growth
As a company grows, the need for SaaS products can meet these needs swiftly
data, integration, and new services without the necessity for new investments
can arise quickly. Without SaaS in hardware and software. By automating
solutions, companies can address repetitive tasks, SaaS solutions can also
this by adding more personnel and help increase the productivity of existing
making their staff work overtime. employees by letting them focus on
strategic and higher-value tasks.
However, many businesses are unaware
of the long-term impact of these actions,
such as the disproportionate ratio of
additional output to salary costs - hiring
three more people doesn't necessarily
lead to a 3x increase in the output.
Moreover, the added workload is likely
to result in a decrease in job satisfaction.
33
Chapter 6: General guidelines for SaaS implementation
Employee onboarding challenges amid company expansion
When a company sets up shop in new locations, the use of cloud-based software can
streamline the onboarding process of employees in these new branches. This is important
to ensure that every eligible person in the company has appropriate access to existing
software or applications. This accessibility allows for direct coordination with other
team members regardless of their physical location.
Rising spending on IT to align with new targets
Generally, cloud-based software providers operate on a subscription model, enabling

companies to incrementally enhance services, add features, and expand their user base
to meet specific and granular requirements.
Slow working processes due to technological hurdles
Delays in operations can be attributed to tech-related challenges such as:
Time-consuming and costly maintenance of IT resources, both hardware

and software
Scarcity of talent capable of using the latest technology and of teaching other
team members how to use them
Absence of solutions to process large-volume and intricate data
Limited visibility into how software is utilized, who controls access, and how
easy it is to use the software
Recognizing these signs lets businesses adapt and ensure their agility and competitiveness
in a continuously evolving market.
34
General guidelines for cloud-based software implementation
1. Define the business objectives and identify the role that digital solutions will play
to accomplish these goals.
2. Consider the investment, infrastructure, and HR required to adopt and implement

digital solutions.
3. Determine which business processes or activities will be pilot projects for adoption
of digital solutions. Then, select the next processes or activities that will leverage
these solutions.
4. Explore and select SaaS providers that offer an integrated series of digital
solutions complemented by comprehensive services, from consulting to digital
skills training.
5. Provide professional training for employees, allowing them to execute existing

digital solutions optimally.
6. Conduct a regular evaluation of digital solutions to check if companies should

add or reduce features.
Cloud-based software implementation can vary in complexity, depending on the business

processes and size of the company undertaking it. However, in general, the steps to
adopting them tend to be similar.
1. Define the objectives and requirements
Companies need to clearly define their objectives and requirements to set the
direction of cloud-based software implementation.
Fortunately, cloud-based software is flexible, enabling companies to add and
remove features depending on their priorities and requirements.
2. Conduct data migration with care
During the transition from on-premise software to cloud-based software solutions,

companies should manage the process of data migration meticulously, especially
for critical data. Some cloud-based software solutions streamline this process by
automating it, ensuring data integrity. For instance, some tax software solutions
are linked to the system of the Directorate General of Taxes (DJP), enabling the
automatic synchronization of various documents submitted by companies
to the DJP.
35
3. Evaluate and select cloud-based software providers
Business owners should consider these aspects when evaluating and

selecting cloud-based software providers:
Data security and privacy.
Compliance with government regulations and policies.
Service performance and reliability.
Provider support.
Vendor lock-in (to determine how easy it is to switch services when needed).
Integration with other services.
Service providers’ roadmap and stability.
4. Plan the migration process
A simplified version of the migration process consists of:

Documentation of business processes
Data migration
Validation
Training
Business process documentation may seem simple, but it holds significant value in
providing important insights into current operations.
Company leaders should allocate sufficient time to this stage in order to understand
the existing business landscape. More importantly, they need to design how to
transform these processes by leveraging the features and capabilities of
data-based software.
Furthermore, business process documentation proves valuable in the validation

stage following data migration. Business owners can refer to business scenario
documentation to run through their processes one by one until they are sure that
the new system is a good fit for their business.
For example, a well-documented claims process will map each step clearly, such as
who is responsible for approving which claims and which documents need to be
submitted. During the validation stage, the user would follow this documentation to
ensure that the new system can cater to the workflow in a satisfactory manner.
36
5. Communicate with team members
Communication with team members is essential at every step of the

cloud-based software implementation.
In the beginning, business owners should convey how this measurewill affect their
businesses and team members. If they don’t communicate this properly, they might
risk losing support, which can significantly impact the whole process. Often, team
members who lack a comprehensive understanding of the tech perceive the decision
to use cloud-based software as a means for companies to reduce staff rather than
a way to free them from routine tasks to focus on more valuable activities.
Communication during the implementation is vital to optimizing business processes.

After all, while business leaders may have created the processes reflected in the
software implementation, team members who execute those daily may have better
ideas or improving them.
Communication at the end of implementation is typically more extensive. This part

can bring up ideas for future implementation in other areas of the business. Sharing
challenges and benefits can also help team members understand their roles better.
37
6. Monitor the performance of cloud-based software implementation
Successful implementation isn’t just marked by seamless data migration or validation.

It is also about whether the cloud-based supports business objectives. If one of the
objectives is an expansion across 11 cities, the key question is whether the cloud-based
software implementation enables the business to operate consistently in all 11 cities and
if data consolidation can be swiftly accomplished.
The results of the implementation may not be evident within the first month. Therefore,
a routine monitoring process is necessary. Business owners need to address questions
such as whether the company is moving in the right direction, how engaged team
members are, and whether they are more or less productive.
This monitoring phase is not merely a formality to conclude the process. Instead, it is
a crucial step for companies to actively assess its progress toward the predefined
business objectives.
38
How can Mekari facilitate business actors/businesses?

Mekari, Power Your Growth
Founded in 2016, Mekari has grown to be the leading cloud-based software provider in
Indonesia by providing businesses with digital solutions for core operational activities,
including HR management, accounting, CRM, and electronic document approval.
To encourage the development of SMEs in Indonesia, Mekari continuously innovates by

introducing AI-based features that are expected to increase users’ productivity.
Mekari offers a suite of digital solutions that automate core business operational
activities. All of the solutions are integrated into Mekari’s technology ecosystem,
giving single or multiple users a seamless experience. The solutions cover HR and
payroll, accounting and invoicing, omnichannel CRM and chat, e-signature (e-sign),
and document management.
Mekari designs the solutions and services with scalability in mind, allowing them to
be tailored to the needs of businesses.
Having initiated and developed its solutions in Indonesia, Mekari constantly improves
processes, functions, and features integrated into the solutions in accordance with
changes in Indonesian government policies and regulations. This ensures that all
users remain compliant with the latest policies and regulations.
Holding the ISO 27001 certification, Mekari is committed to maintaining data

security and adheres to international standards for the management of information
security systems.
Not only does Mekari facilitate business growth, it also supports digital upskilling
in Indonesia. For this, it offers pre-sales consultation and after-sales training for
companies and individual users. In addition, its learning platform Mekari University
provides various material for professionals, students, and the community to help
improve their digital skills and advance their careers.
39
Acknowledgements
This report would not have been possible without contributions from the following:
Adinda Ayu Ristiyani - Chief Financial Officer BLP Beauty

Ristiyani, who graduated from Prasetya Mulya Business School with a
major in business management in 2007, has been involved with BLP
Beauty since its early days. She assisted the brand with financial
projections during the planning phase. She officially joined BLP Beauty
in 2017 after recognizing that it needed a finance division. Since then,
she has grown and led the finance team. Since then, she has formed
and managed a finance team, allowing her to help the company bring
in the tech needed to support business development.
Efrat Agung Musidy - Chief Operating Officer BLP Beauty

Musidy’s experience spans diverse roles and industries, such as being
the chief representative for the Indonesian branch of Acerinox, a
Spain-headquartered steel company. He became the COO of BLP
Beauty in 2019.
drg. Deviana Maria Anastasia - Chief Marketing Officer Rata

Anastasia started her career as a dentist in 2015 after completing her
study at Trisakti University. She has consistently worked to advance dental
aesthetics, such as by establishing Pure Dental Aesthetic Clinic in 2016 and
launching Rata, the first brand of clear aligners in Indonesia, in 2019. As an
entrepreneur, Anastasia oversees different aspects of her businesses such
as marketing, finance, and HR. She is also a mother of one and an active
member of the Asian Association of Aesthetic Dentistry.
Ir. I Made Budi Atmika, S.T, M.T - Chief Executive Officer

PT Tunas Jaya Sanur
Budi joined Tunas Jaya Sanur as a site engineer, later becoming a
branch manager and eventually the CEO. He earned his master's
degree in infrastructure engineering at Institut Teknologi Adhitama
Surabaya. He wrote a book on innovation and technology in the
Industry 4.0 era and frequently speaks at civil engineering seminars.
40
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The Dynamics and

Why businesses need cloud-based software 2

The SaaS industry in Indonesia 7

Results of the survey 25

General guidelines for SaaS implementation 33

Software as a service (SaaS) has emerged

As interest in cloud-based software

Dynamics and Future of Cloud-Based Software in Indonesia

World SaaS Spending Predictions

2020 2021 2022 2023 2024

Source: Gartner, 2023

Dynamics and Future of Cloud-Based Software in Indonesia

Levels of cloud-based software adoption

64% 19% 17%

Have adopted cloud-based software Plan to adopt cloud-based software

Source: Mekari and Tech in Asia Survey, 2023

Dynamics and Future of Cloud-Based Software in Indonesia

Cloud-based software facilitates three

Scalability and adaptation

Smooth business expansion

Responsiveness to market changes

Variative pricing and features

Focus on the core business

Dynamics and Future of Cloud-Based Software in Indonesia

More R&D support

Speedier deployment of new tech

Efficient and effective processes

Dynamics and Future of Cloud-Based Software in Indonesia

Dynamics and Future of Cloud-Based Software in Indonesia

Number of SaaS players

Web Hosting &

Source: Tech in Asia, 2023

Dynamics and Future of Cloud-Based Software in Indonesia

History of SaaS funding in Indonesia

0 0.04 2.87 9.57

Source: Tech in Asia, 2023

Dynamics and Future of Cloud-Based Software in Indonesia

Challenges of SaaS adoption

Challenges of adopting SaaS

High investment cost

Data security problems

Source: Mekari and Tech in Asia Survey, 2023

1. For 52% of non-adopter respondents, investment costs are a significant concern.

Dynamics and Future of Cloud-Based Software in Indonesia

2. The lack of talent is a problem for 42% of non-adopter respondents.

Digital skills of Indonesian employees

Source: AWS Asia Pasific Digital Skill Study, 2022

3. There were 36% of non-adopter respondents who believe that there

Dynamics and Future of Cloud-Based Software in Indonesia

4. Around 30% of non-adopter respondents do not have access to the

5. Data security is a concern for 30% of non-adopter respondents.

Loss or leakage of company data,

Dynamics and Future of Cloud-Based Software in Indonesia

Addressing hurdles to SaaS adoption and educating

Cloud Based Software On-Premises

Dynamics and Future of Cloud-Based Software in Indonesia

In addition, upgrading on-premise IT As a result, the ownership cost can be lower

Cloud-based software can address this

Dynamics and Future of Cloud-Based Software in Indonesia