Digital infrastructure provider PT IndoInternet Tbk (EDGE), or Indonet, has eyed a double-digit business growth in 2023 by allocating Capital expenditure (Capex) higher than its 2022’s of IDR 2.8 trillion (US$ 185.11 million).
Established in 1994, Indonet operates in the technology industry and provides internet and digital services to businesses and individuals. The company’s services include cloud computing, cybersecurity, data center and managed IT services. One of its brands is HSX (HyperScale conneX).
Market expansion in cloud business
Indonet is seeking a business growth target for 2023 by optimizing all subsidiaries and strengthening its position in the digital infrastructure sector and digital solutions. However, the company has not revealed the details of the Capex, its allocation percentage and the origin of the funds.
Indonet Chief Financial Officer (CFO) Donauly Situmorang said the company would have a bigger Capex than in 2022, which was IDR 2.8 trillion.
“We are targeting double-digit growth. Our strategy to achieve this is by optimizing synergies with our subsidiaries, as well as Digital Edge as a platform, and strengthen our position in the market,” he said as quoted by kontan.co.id on February 8, 2023.
According to Situmorang, the company plans to strengthen its position in the market by expanding its services through its network, cloud and data center businesses.
“We will focus on developing the Network and Data Center business where the 2023 Capex allocation will certainly be distributed to the two businesses. Most of the Capex will be used for the construction of our second Data Center facility, namely EDGE2, which is targeted to be operational by the end of this year,” he explained.
The company is also projecting its computing business cloud to grow strong this year due to global cloud users entering Indonesian market. “We will strengthen cooperation with our existing partner, a global cloud service provider, and aim at increasing our positioning as a cloud provider in Jakarta and other big cities,” said Situmorang.
Risks in cloud market
There are 3 potential risks that might affect Indonet’s business in the cloud market.
- Cybersecurity risks: As more businesses move to the cloud, the potential for cyber attacks increases. This is especially true in Indonesia where the level of cybersecurity awareness and preparedness is still developing.
Cybersecurity remains a big problem in the Indonesian digital market, which is still young and needs further development to strengthen its security. There are many instances such as banks in Indonesia receiving one of the lowest cybersecurity scores made by a survey from the Communication & Information System Security Research Center (CISSReC).
- Data privacy concerns: With the rise of data breaches and cyber attacks, businesses in Indonesia need to be cautious about who has access to their sensitive information. Businesses must ensure that their data is stored securely and have proper consent from customers and partners before sharing it with third-party providers.
In Indonesia, privacy concerns have been one of the most significant topics when it comes to the digital market. In 2021, there were reports on confidential government information on its citizens was leaked or sold.
- Dependence on service providers: Companies that rely heavily on cloud services are at risk of service disruptions and downtime if the provider experiences technical issues.
As the cloud market is still developing in Indonesia, businesses may have a different level of service quality and reliability than they would with a more established provider in a mature market.
