Cloud-Based Spending by APJ Digital-Native Businesses Expected to Hit US$26.5 Billion in 2024

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• Supriya Deka  Email: sdeka@idc.com
• Michael De La Cruz  Email: mdelacruz@idc.com
• Miguel Carreon  Email: mcarreon@idc.com

Asia/Pacific Digital-Native Businesses (DNBs) Ramp Up Tech Collaborations With AI and Cloud Platforms at the Forefront

SINGAPORE, 22 November 2023 – According to a recent IDC report, APJ Digital-Native Businesses' Current Tech Vendor Collaborations and Strategic Alliances, DNBs are defying the economic slowdown in the region. IDC forecasts more than half of DNBs in Asia/Pacific including Japan (APJ) will increase their technology spending by up to 20% in the next 12 months, prioritizing the latest technologies, such as generative AI and cloud platforms, to remain competitive, create innovative products, and maintain their financial viability. This is all despite venture capital (VC) investments falling in 2023 compared to 2021 and 2022 due to rising interest rates, global recession, and currency fluctuations.

Strategic alliances with top cloud vendors are becoming a critical move for DNBs, especially scale-ups in the APJ region. Partnering with cloud vendors enables DNBs to access cutting-edge cloud solutions and build innovative technology solutions by tapping into the expertise of established vendors. Based on IDC data, the top cloud platforms that DNBs in APJ prefer are AWS, Alibaba Cloud, and Microsoft. These vendors dominate the market share and the mindshare with their strong reputation among decision-makers in APJ. However, the spending across different countries in APJ varies, which depends on the maturity of each market. IDC anticipates a 36% year-on-year growth of cloud adoption in APJ DNBs, which includes SaaS, PaaS, and IaaS.

Nonetheless, security, risk, and compliance are top concerns for DNBs at all maturity stages (start-ups, scale-ups, and unicorns). Despite the reduction in tech budget due to a fall in VC investments, DNBs will continue to invest in security solutions to safeguard their digital assets and protect customer data. Technology suppliers must develop distinctive value propositions, offer customization, and collaborate with regional suppliers and service providers. The credibility of vendors depends upon their customer support, knowledge, and experience, leading to rapid and successful implementation of their platforms.

"In the digital era, the synergy between digital native businesses and technology vendors is not only about collaboration; it’s about forming strategic alliances that foster innovation,” says Supriya Deka, Senior Market Analyst, IDC Asia/Pacific Small and Medium-sized and Digital Native Business Program.   “Establishing solid partnerships with technology vendors who can offer them the necessary expertise and support to enhance their core competencies and spur innovation is essential for businesses navigating the constantly evolving technology landscape,” ends Supriya.

This report, IDC Playbook Tech Sales Leaders: APJ Digital-Native Businesses' Current Tech Vendor Collaborations and Strategic Alliances (Doc # AP51160023), provides details on of APJ digital-native DNBs’ technology spending trends, their priorities, and cloud vendor collaborations and strategic partners. The report highlights the attributes while selecting vendors, IT spending breakdown, and key decision makers of DNBs at each maturity stage. This document also gives advice on how vendors can differentiate by following a tailored sales approach for targeted personas, establishing feedback mechanism, and positioning themselves as partners rather than vendors.

For more information on this IDC Market Presentation, please contact Supriya Deka at sdeka@idc.com. For media inquiries, please contact Miguel Carreon at mcarreon@idc.com or Michael De La Cruz at mdelacruz@idc.com. 

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