As the world continues to grapple with the COVID-19 crisis, we have seen an increasing rate of digital transformation in response to rapidly changing socio-economic trends. In Southeast Asia, many tech startups have had to pivot their business models to remain relevant in the new normal. What will be the long-term effect of this crisis on businesses is still unknown, but one thing is clear that Southeast Asia’s cloud technology market will continue to witness new opportunities for innovation and growth.
Cloud computing has evolved into an important strategic development driver not only for government and businesses but for pretty much everything. The cloud computing market in Southeast Asia is expected to reach US$40.32 billion by 2025 according to IDC. In Southeast Asia, markets like Singapore, the government has pledged $500 million to support the digital transformation efforts of local businesses.
The growing importance of cloud computing in Southeast Asia
The benefits of cloud technology are being realized all over the region- it not only offers agile consumption but provides global reach in an ever more globalized world. Startups now no longer compete regionally or locally, but on a global scale and cloud technology offers cost-effective, adaptable, and easy access alternative to the present and future needs of the organization.
The higher demand for collaboration technologies and business continuity brought on by the COVID-19 crisis cloud services will see sustained growth. According to IDC forecast in the coming months- SaaS is projected to increase by 22.8 percent, PaaS likely to grow by 38.5 percent, and IaaS will see a growth of 26.0 percent
Cloud technology has thrived during the pandemic
Before pandemic, many organizations across the region had delayed their digital transformation programs since they did not see any threat of disruption from competitors. However, things changed overnight with the onset of the pandemic since most of the companies and startups had to shift to smaller remote working models which created new challenges with greater than before demand for video conferencing and data sharing services.
With the cloud offering easily accessible and safe solutions for the digital transformation, the technology saw a rapid rise in demand. According to experts, cloud penetration is likely to increase further in 2021. In Singapore alone, there are 93 datacenter sites and counting. Singapore already has many well-established companies and is a hub for thriving startups and with a high-skilled workforce, the country is a prime location for the ever-growing cloud market. The country is at the forefront of global technology and continues to develop due to significant efforts from the government to build a technology hub.
Even countries like Vietnam and Cambodia are gradually starting to modernize their infrastructure and have a great potential to catch up with the rest of the region in a short period of time
Conclusively, the year 2020 has shown that Southeast Asia’s tech startups can adapt quickly. The pandemic has given rise to an abundant and swift opportunity for digital transformation that is expected to continue through 2021. With countries like Singapore in Southeast Asia becoming a hub for data centers, we will continue to witness rise of cloud computing in Southeast Asia. Despite of the uncertainties, success of this technology is likely.