Indonesia Emarket

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TABLE OF CONTENTS
List of Figures ................................................................................................................................. 5
List of Tables .................................................................................................................................. 7
1. Indonesia Digital Education Market Introduction ................................................................... 8
Role of Government in Indonesia Digital Education Market ........................................ 10
Role of ICT in Indonesia Digital Education Market ...................................................... 11
1.1. Indonesia Digital Education Framework........................................................................ 13
1.2. Indonesia Digital Education Market Drivers, Challenges and Opportunities ................ 15
Major Growth Drivers of Indonesia Digital Education Market ..................................... 15
Major Challenges Faced by Indonesia Digital Education Market ................................. 15
Key Opportunities for Indonesia Digital Education Market .......................................... 16
Demand and Supply Analysis of Digital Education in Indonesia .................................. 17
1.3. Indonesia Education Sector Overview ........................................................................... 18
Government of Indonesia Focusing on Increasing Correspondence/Part Time Academic
Education........................................................................................................................ 18
Increasing Opportunities in the field of Vocational Training ........................................ 18
Implementation of Indonesia’s Higher Education Act 2012 .......................................... 19
Measures to Overcome the Brain Drain Issue in Indonesia ........................................... 19
2. Indonesia Digital Education Market Size, 2008-2013........................................................... 21
3. Indonesia Digital Education Market Segmentation ............................................................... 23
3.1. By Content and Technology Services, 2008-2013 ......................................................... 23
3.2. By Type of Education (K-12, Post K-12, Corporate Training, Pre K-12 and Vocational
Training), 2013 .......................................................................................................................... 25
4. Indonesia Digital Education Content Services Market Introduction and Size, 2008-2013 ... 28
4.1. Indonesia Digital Education Content Services Market Segmentation ........................... 29
4.1.1. By Product Categories (Open Courseware, Multimedia, Online Tests and Others),
2013 29

4.1.2. By Type of Content Format (Video, Text and Audio), 2013.................................. 32
4.1.3. By End Users, 2013 ................................................................................................ 33
5. Indonesia Digital Education Technology Services Market Introduction and Size, 2008-2013
35
5.1. Indonesia Digital Education Technology Services Market Segmentation ..................... 37
5.1.1. By Products (LMS, Content Authoring Tools, Smart Classes and Others), 2008-
2013 37
5.1.1.1. Indonesia LMS System Market Size, 2008-2013 ............................................ 39
5.1.2. By End Users, 2013 ................................................................................................ 41
6. Indonesia Digital Education Market Trends and Developments ........................................... 43
Rising Penetration of Tablets/ Phablets and Smartphones ............................................. 43
Mounting Demand of Gamification Amongst Mobile Users ......................................... 44
MOOC’s Service Platforms Aiding Digital Education Market ..................................... 45
Online Group Study and Social Media Users Driving Growth ...................................... 45
Ingress of HTML5 in Digital Education Software Platforms ........................................ 47
Escalating M-education Market in Indonesia................................................................. 47
Mergers and Acquisitions in Indonesia Digital Education market ................................ 48
7. Expenditure Incurred on Digital Education System in Indonesia by Different Parties ......... 49
8. Market Share of Major Players in Indonesia Corporate Digital Education Market, 2013 .... 51
9. Competitive Landscape of Major Players in Indonesia Digital Education Market ............... 53
9.1. By Start-Up Firms .......................................................................................................... 53
9.2. By Leading Content and Technology Service Providers ............................................... 56
10. Indonesia Digital Education Market Future Outlook and Projections, 2014-2018 ........... 63
10.1. By Content and Technology Services, 2014-2018 ..................................................... 65
10.2. Cause and Effect Relationship in Indonesia Digital Education Market ..................... 66
11. Macroeconomic Factors Affecting Indonesia Digital Education Market .......................... 68
11.1. ICT Spending in Indonesia, 2008-2018...................................................................... 68

11.2. Consumer Spending on Education in Indonesia, 2008-2018 ..................................... 70
11.3. Population in Indonesia, 2008-2018 ........................................................................... 71
11.4. Internet Users in Indonesia, 2008-2018 ...................................................................... 72
12. Appendix ............................................................................................................................ 75
12.1. Market Definition ....................................................................................................... 75
12.2. Abbreviations.............................................................................................................. 76
12.3. Research Methodology ............................................................................................... 78
Data Collection Methods................................................................................................ 78
Approach ........................................................................................................................ 79
Variables (Dependent and Independent) ........................................................................ 79
Final Conclusion ............................................................................................................ 82
12.4. Disclaimer ................................................................................................................... 83

LIST OF FIGURES
Figure 1: Indonesia Digital Education Market Overview, 2013 ................................................... 12
Figure 2: Indonesia Digital Education Framework ....................................................................... 14
Figure 3: Indonesia Digital Education Market Size on the Basis of Revenue in USD Million and
Percentage Share in Total Education Spending, 2008-2013 ......................................................... 22
Figure 4: Indonesia Digital Education Market Segmentation by Content and Technology
Services on the Basis of Revenue in Percentage, 2008-2013 ....................................................... 24
Figure 5: Indonesia Digital Education Market Segmentation by Type of Education (K-12, Post
K-12, Corporate Training, Pre K-12 and Vocational Training) on the Basis of Revenue in
Percentage, 2013 ........................................................................................................................... 26
Figure 6: Indonesia Digital Education Content Service Market Size on the Basis of Revenue in
USD Million and Growth in Percentage (%), 2008-2013............................................................. 29
Figure 7: Indonesia Digital Education Content Services Market Segmentation by Product
Categories (Open Courseware, Multimedia, Online Tests and Others) on the Basis of Revenue in
Percentage, 2013 ........................................................................................................................... 31
Figure 8: Indonesia Digital Education Content Services Market Segmentation by Type of
Content Format (Video, Text and Audio) on the Basis of Revenue in Percentage, 2013 ............ 32
Figure 9: Indonesia Digital Education Content Services Market Segmentation by End Users on
the Basis of Revenue in Percentage, 2013 .................................................................................... 34
Figure 10: Indonesia Digital Education Technology Service Market Size on the Basis of Revenue
in USD Million and Growth in Percentage (%), 2008-2013 ........................................................ 36
Figure 11: Indonesia Digital Education Technology Services Market Segmentation by Product
Categories ( LMS, Content Authoring Tools, Smart Classes and Others) on the Basis of Revenue
in Percentage, 2008-2013.............................................................................................................. 38
Figure 12: Indonesia LMS Market Size on the Basis of Revenue in USD Million and Growth
Rate in Percentage (%), 2008-2013 .............................................................................................. 41
Figure 13: Indonesia Digital Education Technology Services Market Segmentation by End User
on the Basis of Revenue in Percentage, 2013 ............................................................................... 42
Figure 14: Indonesia Smartphone Users in Million, 2010-2018................................................... 44
Figure 15: Indonesia Social Network Users in Million, 2010-2018 ............................................. 46

Figure 16: Indonesia Internet Users by Education Level in Percentage, 2012 ............................. 46
Figure 17: Indonesia m-Learning Market Size on the Basis of Revenue in USD Million, 2010-
2013............................................................................................................................................... 48
Figure 18: Market Share of Major Players in Indonesia Corporate Digital Education Market on
the Basis of Registered Users, 2013 ............................................................................................. 52
Figure 19: Indonesia Digital Education Market Future Projections on the Basis of Revenue in
USD Million and Growth Rate in Percentage, 2014-2018 ........................................................... 64
Figure 20: Indonesia Digital Education Market Future Projections by Content and Technology
Services on the Basis of Revenue in Percentage, 2014-2018 ....................................................... 65
Figure 21: Indonesia ICT Spending in USD Million, 2008-2018 ................................................ 69
Figure 22: Indonesia ICT Spending by Hardware, Software and Services on the Basis of
Contribution in Percentage, 2011 ................................................................................................. 69
Figure 23: Consumer Spending on Education in Indonesia in USD Million, 2008-2018 ............ 71
Figure 24: Indonesia Population in Million, 2008-2018............................................................... 72
Figure 25: Internet Users in Indonesia in Million, 2008-2018 ..................................................... 73

LIST OF TABLES
Table 1: Demand and Supply Analysis of Indonesia Digital Education Market .......................... 17
Table 2: Indonesia Digital Education Market Segmentation by Content and Technology Services
on the Basis of Revenue in USD Million, 2008-2013 .................................................................. 24
Table 3: Indonesia Digital Education Market Segmentation by Type of Education (K-12, Post K-
12, Corporate Training, Pre K-12 and Vocational Training) on the Basis of Revenue in USD
Million, 2013................................................................................................................................. 27
Table 4: Indonesia Digital Education Content Services Market Segmentation by Product
Categories (Open Courseware, Multimedia, Online Tests and Others) on the Basis of Revenue in
USD Million, 2013........................................................................................................................ 31
Table 5: Indonesia Digital Education Content Services Market Segmentation by Type of Content
Format (Video, Text and Audio) on the Basis of Revenue in USD Million, 2013 ...................... 33
Table 6: Indonesia Digital Education Technology Services Market Segmentation by Product
Categories (LMS, Content Authoring Tools, Smart Classes and Others) on the Basis of Revenue
in USD Million, 2008-2013 .......................................................................................................... 39
Table 7: Average Amount Spent on Digital Education System by Government Schools, Private
Schools, Universities, Corporates and Students ........................................................................... 50
Table 8: Competitive Landscape of Leading Start-ups in Indonesia Digital Education Market .. 53
Table 9: Competitive Landscape of Major Content and Technology Service Providers in
Indonesia Digital Education Market ............................................................................................. 56
Table 10: Indonesia Digital Education Market Future Projections by Content and Technology
Services on the Basis of Revenue in USD Million, 2014-2018 .................................................... 66
Table 11: Cause and Effect Relationship Analysis between Industry Factors and the Expected
Indonesia Digital Education Industry Prospects ........................................................................... 66
Table 12: Indonesia ICT Spending by Hardware, Software and Services in USD Million, 2011 70
Table 13: Social Network and Smartphone Users in Indonesia in Million, 2010-2014 ............... 74
Table 14: Correlation Matrix for Indonesia Digital Education Market ........................................ 80
Table 15: Regression Coefficients Output .................................................................................... 81

1. INDONESIA DIGITAL EDUCATION MARKET
INTRODUCTION
Indonesia has witnessed a significant growth in the education sector in the last few years.
Leading renowned educational institutions in the country have become more receptive towards
the implementation of hi-tech learning components. The advent of technological advancements
in the education landscape in Indonesia has provided a number of benefits to the educational
institutions as well as corporate trainers such as multi-modal training, online tests and tutorials,
live video streaming with the teaching faculties and few more other facilities.
The rising penetration of technology in Indonesia has fuelled the spending on education in the
recent years. Increasing rate of socio-economic development in the country coupled with rising
investments in the country’s infrastructure has propelled the Indonesia education market,
resulting in impelling the digital education
The arrival of Learning Management market in the last few years. However, the
Systems (LMS), cloud storage, multi- educational institutions have encountered various
media content, mobile apps related to challenges in leveraging the technology
education are a few examples of rising
efficiently within the campus. In terms of IT
digital education scenario in the
country. infrastructure, the country has been lagging
behind as compared to its neighboring countries
such as Malaysia, Singapore and others. These countries comprise of wifi and broadband
bandwidth access to a number of education institutions, which is not available in Indonesia.
Various efforts from the government, private players as well as telecom companies are being
made to strengthen the IT infrastructure of the country now. There are a number of steps that
have been taken to create better prospects for educational institutions for deploying the digital
education tools and products in a more effective and interactive manner, which in turn will
escalate the spending on digital education in the country. The arrival of Learning Management
Systems (LMS), cloud storage, multi-media content, mobile apps related to education are a few
examples of rising digital education scenario in the country.
The digital education market in Indonesia majorly encompasses the revenues generated by
content service providers as well as technology services providers. The content services include
various components such as Open courseware (MOOCs), multi-media, online tests and others.
The Massive Open Online Course (MOOC) is based on the fundamentals of traditional
courseware coupled with the availability of teaching assistance for the students. A number of
students ranging from different streams such as science, liberal arts and management have been
opting for online education mode in order to attain an educational degree/certificate while

working on a full time job. In light of the growing need of skilled labor in the country, the small
and medium scale businesses have been building their own private training spaces. Moreover,
the increasing penetration of cloud services in the country has also enabled the SMEs to afford
the digital corporate training programs in order to educate or improve the skill of the manpower.
In the field of content services, various companies have been increasing their penetration as the
number of students opting for online academic education is rising in the country. The
technologies involved in digital education market include interactive LMS, Content Authoring
Tools, Virtual classrooms and others. Various
The integration of online and offline companies and educational institutions are hiring
education with the help of smart classes technology service providers to make their own
has led to a new trend, called as blended
LMS platform where these education centers can
learning in Indonesia education sector
during the last few years. virtually administer and manage the student’s
performance as well as provide courses to them.
For instance, a leading company named Appstronic develops the LMS software programs for
corporate training centers, schools, colleges as well as for the universities. Moreover, the virtual
classrooms (also called as smart classes) are the technology enabled learning space which
comprise of online video classes, tests, lessons from simulations, games and social media. This
encouraged the teachers and corporate trainers to deliver education on a remote mode coupled
with in-house teaching lessons.
The integration of online and offline education with the help of smart classes has led to a new
trend, called as blended learning in Indonesia education sector during the last few years. The
increasing development in the field of education technology has motivated the educators to
construct virtual as well as real time classrooms for the students. These virtual classrooms are
conducted exclusively through web services, creating the learning experience to be interactive,
developed and collaborative. In the last few years, the virtual classrooms market in Indonesia has
developed at a considerable rate with the adoption of latest technology due to increasing demand
from K-12 and higher education institutions.
The digital learning market in Indonesia is spread across a number of players in the country. A
large number of companies collaboratively provide content as well as technology services to
their clients. However, the competition is hugely intensified in the country, owing to the fact that
the B2B sales are conducted on the contractual basis which includes the AMC, Software
upgradation, content upgradation and others. If a company establishes its relationship with a
business entity or an education institute for digital education services, then the same company is
most likely to serve and solve the digital education related problems for the particular end user.
The small scale education startups face stiff competition from established and/or well funded
companies in the field of digital education market in the country.

Majority of the revenues of digital education content and technology providers accumulates from
B2B (business to business sales). There is a noteworthy reason as to why the B2C sales are
relatively lower than the B2B sales in digital learning market. Students generally opt for free
version of MOOCs courses for their personal knowledge. However, in order to attain a certificate
of accomplishment of a particular course, the charges are applicable. Various schools and
colleges are increasing online education trend for their in-house students as well as for the part-
time or correspondent students, thereby contributing largely to the revenue of digital education
market in the country. Moreover, the increasing trend of virtual skill training, product knowledge
as well as other educational training in corporate environment has also contributed a large
portion in the overall revenue of the digital education market in Indonesia.
The digital education sector in Indonesia has been becoming increasingly profitable with a
growing market presence of digital devices such as smartphones and tablets. This has led to the
introduction of various other e-learning devices such as e-readers. Poor IT and communication
infrastructure in the country has acted as a growth barrier for the digital learning industry in the
last few years. However, the increasing spending on ICT (Information communication and
technology) reflects the increasing efforts from government and private players to augment the
technology driven industries such as social media, online advertisements, digital learning and
others.
ROLE OF GOVERNMENT IN INDONESIA DIGITAL EDUCATION MARKET
The role of government in the Indonesia digital education market is significant. There are a
number of steps taken by the government of Indonesia in order to augment the penetration of
digital education amongst schools, colleges and universities in the country. This includes
dissemination of digital learning development by increasing awareness through integrated
seminars and workshops in the country. Moreover, increasing technical cooperation of Pt.
Telkom (which is a government Telecommunication Company) with leading software e-learning
firms has encouraged m-education as well as live video streaming across the students in the
country. This aforementioned factor has encouraged the students and college graduates to use
tablets and smartphones for the purpose of e-learning activities.
In 2010, the education sector contributed a share of 17.1% in the overall government expenditure
on the development of the country. Increasing development of digital learning programs such as
compulsory curriculum for high-school students to apply 90 hours on IT subject has also resulted
in increasing the demand of e-learning tools. This step was taken in order to create a learning
habit amongst the students and corporate people via digital means. In five-year program
launched in 2010, it was stated that all vocational schools at each district province will be
facilitated with one net-working.
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The government of Indonesia has also launched a student computer literacy program, which
aimed at introducing IT to schools and colleges across the country in 2005. This program is
named as one school one computer lab (OSOL) and it was launched by Ministry of
communication and Information systems. This nationwide launched program was also supported
by leading global IT firm named Microsoft in Indonesia. The country has been aiming to
improve the human resources, due to which certain programs and policies have been launched to
impel the IT services amongst the citizens. Both central and regional governments have been
working together, in order to provide computer laboratory to each school, college and university.
This has enabled students to learn about how to use computers in class as well as for his/her
personal usage.
ROLE OF ICT IN INDONESIA DIGITAL EDUCATION MARKET
The role of ICT is crucial for the development of digital education market in Indonesia. The
government of Indonesia has established RICE (Regional IT Center for Excellence), with a key
focus on regulating and monitoring the IT related activities in the country. The government of
Indonesia has also showcased flexibility in the Import of used computers. This has enabled the
middle and lower income class Indonesian citizens to afford the technological devices such
as PCs, Laptops, Tablets and others. The increasing number of IT techno parks has further
spurred the awareness of technologies among the people about the advanced tools and
equipments. The increasing need of IT hardware and software tools and products has led to
several ICT manufacturers being relocated to Indonesia in the recent years.
Another prevailing trend witnessed in the ICT industry is the increasing adoption of cloud
computing in the country. Local as well as international players have already taken positions in
the cloud computing market such as Telkom’s Telkom Cloud, which announced it plans to invest
a USD 10 million in expanding its capacity, in 2013. This reflects an increasing shift in approach
to IT infrastructure from in-house data centers to cloud storage. Historically, businesses and
public entities concentrated on constructing their own in house data centers which used to impel
the ongoing costs for software upgrades as well as for the hardware depreciation.
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Figure 1: Indonesia Digital Education Market Overview, 2013
Indonesia Digital Education Market Size

(USD 302.4 million)
Digital Education Content Service Digital Education Technology Service

Market (USD 196.6 million) Market (USD 105.8 million)
Open Courseware (MOOCs) Learning Management Systems

(USD 137.0 million) (USD 84.6 million)
Multi-Media Content Content Authoring Tools
Online Test/Assessments Virtual Classrooms/Smart

(USD 17.3 million) Classes (USD 5.4 million)
Other Content Services Other Technology Services

Source: Ken Research
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1.1. INDONESIA DIGITAL EDUCATION FRAMEWORK
The digital education system provides all sorts of services of conventional education method via
digital means. This includes a number of services such as providing access to online classes,
digital class content, tests, homework, grades, assessments, by the help of website links. It also
represents a social space where students and teacher can interact through discussion forums or
chat. The online digital classroom typically uses Web 2.0 tools for 2-way interaction, and
includes a content management system, which is also called as LMS. The LMS is the basic
component of digital education system on which the other technology related tools are deployed.
LMS is established by technology service providing companies such as Appstronic. The content
on LMS is installed from content service providers such as Harukaedu, Globalearning Systems
and others. These companies work in collaboration with leading telecom and broadband access
providing digital education service to various universities, colleges and schools.
The virtual learning platform is one of the basic components of digital learning system, but it can
also be integrated with a physical or offline learning environment, in order to provide better
service to the students. This integrated mode of education is called as blended learning. The
virtual learning can take place synchronously or asynchronously. In synchronous systems,
participants meet in “real time” and teachers conduct live classes in virtual classrooms. Students
can communicate through a microphone, chat and/or by writing on the board. In asynchronous
learning (which is also called as “self-paced” learning), students are expected to complete
lessons and assignments independently through the system.
A virtual learning environment can also include students and teachers “meeting” online through
a synchronous web-based application. The teacher is able to present lessons through video,
PowerPoint slides and/or chatting. The students are able to talk with other students and the
teacher, as well as collaborate with each other, answer questions or raise questions. They can use
the tools available through the application to virtually send messages or answer the questions
raised on the screen given by the teacher or student.
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Figure 2: Indonesia Digital Education Framework
Digital Education Web Portal
Learning Community and Web Services (Including MOOCs and Paid Websites)
LMS: Access to Program and Course Student Personal Portal: Individual

Catalogue Plans, Mark sheets, Calendar,
Progress and others
Student views available courses in

catalogue and enrolls
Learning Management System Platform
Course Web Pages: Syllabus, Table of Contents, Assignments, Assessments, Calendar, Plan, Activity and Lesson
pages, Links, Virtual Classroom Sessions, Discussion Forum and others.
Course Web Pages
Virtual Discussion Self Paced Online Tests/ Live Project

Classrooms Forum Learning Assessments
(Synchronous) (Asynchronous) (Asynchronous)
Instruction Modes and Authoring Tools
Learning Tools
Static: Documents, Dynamic: Podcasts Social: Blog, Chat,

Graphics and Web and Video Content IM, Wiki.
page text
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1.2. INDONESIA DIGITAL EDUCATION MARKET DRIVERS,
CHALLENGES AND OPPORTUNITIES
MAJOR GROWTH DRIVERS OF INDONESIA DIGITAL EDUCATION MARKET
• Lower development costs: On account of the fact that the digital education components
require relatively less capital expenditures as compared to the conventional education system,
the digital education market has been gaining massive traction in the last few years. Due to
this, various start ups and small scale content developers have been stepping afoot in the
field.
• Increasing demand for hardware and connectivity: The demand for virtual classes in the
country has been rising significantly. However, this segment is at nascent stage and has less
penetration rate in Indonesia as compared to other software tools such as LMS, MOOCs and
others. The rising demand for digital classes which includes various equipments such as
digital whiteboard, projectors and others, have contributed considerably to the increasing
revenue of the digital education market in Indonesia, lately.
• Increasing penetration of technology: There has been an increasing penetration of the
technological components in various schools and colleges, private and government
universities as well as in the corporate training centers across Indonesia in the recent time
period. This has led to a significant growth in the revenue of digital education market in the
country during the last few years.
• Customer friendly User Interface (UI): Various companies in the field of digital education
have been constantly modifying, improvising as well as developing education software
platforms and allied services, in order to provide a user friendly environment to the students
who opt for digital education. Numerous LMS and technology providing companies have
been developing simplified form of UI (User Interface), which provides flexibility to the end
user for choosing the tools as per his/her requirements.
MAJOR CHALLENGES FACED BY INDONESIA DIGITAL EDUCATION MARKET
• Lack of Infrastructure and Poor Internet Connectivity: The country has been witnessing
a paradigm shift in the training and teaching methods in the education sector. School students
and college graduates have been looking forward to try new learning methods such as
MOOCs, live video streaming and others. Currently, lack of infrastructure development and
internet connectivity issues act as a restraint for the growth of digital education in Indonesia.
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The country has less prevalence of smart classes in the schools and colleges, whereas, in the
corporate world, the demand for smart classes is considerably higher than the demand across
education institutions. I
• Funding limitations: The country’s education sector has been witnessing lack of funding
from government and private players. However, with the increasing need of skilled labour in
the public, private as well as in the joint sector, various steps have been taken to raise funds
in for education sector in the country. Limited number of foreign investments in Indonesia
education sector has been witnessed in the country, which poses a major challenge for the
development of digital education market in the country.
• Recruitment of skilled employers, a major driving factor of the education industry in the
corporate sector, is currently constrained in the country due to higher training costs and low
focus on research and development of the organizations.
• Lack of IT Infrastructure: The quality of educational IT centers (formal and informal) is
needed to be developed in the country. A variety of source language program such as Linux,
Microsoft, and others are available now.
• Rising Cost: Cost has remained as the major potential barrier in implementing digital
education facilities in the country. It is expensive due to higher upfront costs to purchase a
learning management system and ongoing costs to maintaining this system. However, the
market has been increasingly shifting to a service model that will effectively rent learning
platform space. A number of learning management system companies provide learning
spaces and designers brand their learning product and run it on these types of platforms.
KEY OPPORTUNITIES FOR INDONESIA DIGITAL EDUCATION MARKET
• Growing literacy skills: Increasing need of the skilled labour has created awareness about
the part-time, correspondence and online education systems among the Indonesian citizens.
This has in turn augmented the literate population in the recent years. The growing literacy
rate in the country has led to a growth in the demand of various education methodologies,
which in turn has impelled the demand of digital education system in the country and is a
growth opportunity for the market.
• Increasing trend of blended technology: With the growing demand of technology in the
field of education sector, the concept of blended technology has emerged in the country. A
blended learning approach combines face to face classroom methods with computer-
mediated activities, in order to form an integrated instructional approach. For example, a
blended approach to a traditional, face to face course might mean that the class meets once
per week instead of the usual three-session format. Learning activities that otherwise would
have taken place during classroom time can be moved online by the help of several tools
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such as virtual classroom, MOOCs, Asynchronous learning, virtual learning environment,
Online Lab and few others.
• Better online training: Various companies in the field of content service as well as
technology platforms providing services have been increasing their penetration, by reaching
out to numerous educational institutions in the country. Rise in the demand of distance
education as well part time academic education will act as a driving force for the private
players in digital education market in Indonesia in the coming years.
Overall, digital education plays a major role in the development of education sector of an
economy by creating new job opportunities across schools, colleges and universities along with
adopting a new corporate culture. As technological advancements continue to develop, it brings
latest opportunities and challenges for educators and students. The biggest challenge for
education institutions is the difficulty in adopting a secure infrastructure and the lack of digital
fluency among institutions towards the latest technological trends. Budget cuts continue to
emerge for many K-12 and higher education institutions as they are largely dependent on state
funding. Educational institutions lack IT governance which is essential for making the right
decision while adopting products and software solutions. The vendors in this industry have been
constantly innovating and remodeling their strategies in order to build more proficient and
modern information systems. The major forces driving this market are emergence of digital
education in the country, progression of interactive learning systems, growth of educational apps,
and online and blended learning.
DEMAND AND SUPPLY ANALYSIS OF DIGITAL EDUCATION IN INDONESIA
Table 1: Demand and Supply Analysis of Indonesia Digital Education Market
Demand Supply
• Rapid obsolescence of knowledge and training • Internet access becoming standard at work and
• Need for just-in-time training delivery at home
• Search for cost-effective ways to meet learning • Advances in digital technologies enable
needs of globally distributed workforce creation of interactive, media-rich content
Increasing bandwidth and better delivery
• Skills gap and demographic changes drive need
platforms make e-learning more attractive
for new learning models
• Growing selection of high-quality e-learning
• Demand for flexible access to lifelong learning
products and services
• Emerging technology standards facilitate
compatibility and usability of e-learning
products
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1.3. INDONESIA EDUCATION SECTOR OVERVIEW
The growing pace of infrastructure development in Indonesia has created a shortage of skilled
labour in most industries. The government of Indonesia has been implementing a number of
plans and policies in order to expand educational opportunities for the people. This has created a
gamut of opportunities for private players to step into the education industry, by offering high
quality education, especially at the secondary and tertiary level as well as in vocational training.
Moreover, the government has also been encouraging foreign universities to take part in the
developing the country’s human resource base by a number of steps such as launch of dual
degree programmes, distance learning programs and others. Furthermore, the growing demand of
corporate training is providing a window of opportunity to the foreign universities as well as
foreign investors in the field of education in Indonesia. There are a number of trends which have
been witnessed in the country during the last few years. These are mentioned as follows:
GOVERNMENT OF INDONESIA FOCUSING ON INCREASING

CORRESPONDENCE/PART TIME ACADEMIC EDUCATION
An increase in the number of students going to other countries for post K-12 education has been
witnessed in Indonesia in the last few years. This has resulted in brain drain in the country,
which in turn has caused huge potential losses in terms of human resources in the country. This
growing cause of brain drain has given a strong impetus to the growth of distance learning
programs in the country in the last few years. The government of Indonesia has been increasing
its expenditure on infrastructure development for the growth of part time or online academic
education in the recent years. The growing need for capitalization and internationalization of
Indonesia's education sector has led to a growth in the demand of correspondence education in
the recent years. As a result of this, the government has been creating a number of opportunities
for commercial foreign investment in the sector.
INCREASING OPPORTUNITIES IN THE FIELD OF VOCATIONAL TRAINING
With the rising globalization, the demand for vocational training courses is increasing in the
country. Foreign language courses are in high demand as students or young professionals are
eager to equip themselves for an increasingly global national economy. Skills in a wide array of
fields such as IT and hospitality are widely gaining growth in the last few years. The lack of
research in Indonesia education sector has also created a space for foreign investors, who could
set up various research institutions with key focus on creating useful regional knowledge,
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software or tools, such as renewable energy potential or the medical benefits for human as well
non human resources.
IMPLEMENTATION OF INDONESIA’S HIGHER EDUCATION ACT 2012
Due to the growing need of skilled labor in the country, the government of Indonesia has
implemented several policies in order to widen the scope of education in Indonesia. In 2012, the
House of Representatives passed the Ministry of Education Bill called as the Higher Education
Act. This act represents a fundamental change in Indonesia’s tertiary education system, which
has proved to be highly controversial among students, academicians and politicians. The aim of
the act is to provide decision making power to the universities, in order to promote
internationalization of education and encourage the entrance of foreign universities in the
country. It is also designed to make the country’s higher education institutions more accountable
for their academic results to the existing as well as for the potential students. The act was
implemented to expand the access to higher education for the Indonesian citizens. It also raised
the standards of education opportunities available to the students, in order to improve the quality
of human resources. The law also authorized some public universities to seek funding from
sources outside the government while still remaining under state regulations.
MEASURES TO OVERCOME THE BRAIN DRAIN ISSUE IN INDONESIA
Indonesia comprises of numerous renowned universities with graduates and post graduates in
various fields such as science, liberal arts, law, investments and finance and others. For instance,
the Bandung Institute of Technology (ITB) and Universitas Indonesia has been few of the highly
reputed universities in Asia. However, factors such as less infrastructure development in the
country coupled with slow grow in employment and economic opportunities have led to a rise in
the number of students going outside the country for studies and work. This has caused brain
drain in the country during the last few years.
A large proportion of the Indonesian students outside the country are contributing majorly in the
field of scientific research around the world. Nearly 2,000 scientists at various prestigious
international institutions in countries such as Singapore, Japan and the US are Indonesians.
Furthermore, the number of PhD candidates has also showcased declining rate of admissions
within the country in the recent years. In order to control the brain drain in Indonesia, the
government has been aggressively investing in the education sector. Nearly 20% of the country’s
budget is allocated to education which includes the infrastructure development, teachers’
salaries, setting up of primary education and others in 2012. During the same year, the
government has planned to spend nearly USD 34 billion on education sector in the economy.
19

During 2008, a leading scientific institution named ITB received USD 3.8 million in scientific
research funding. This reflects the increasing number of investments made by the government
and private players in Indonesia education sector in an initiative to stop brain drain from the
country.
20

2. INDONESIA DIGITAL EDUCATION MARKET SIZE,
2008-2013
Indonesia digital education market has gained massive traction in the last few years. A number of
factors have contributed to the significant growth of digital education market in Indonesia, lately.
The country has witnessed a strong demand of skilled and educated labour, owing to increasing
infrastrucutral development during the last few years. Due to this, there has been a rise in the
number of school admissions and vocational courses enrollments in the last few years. In 2013,
the spending on education in the country was valued at USD 17,600 million, which augmented at
a rate of 12.9% since 2008. This rising adaption of education among the Indonesian citizens has
resulted in augmenting the demand for part-time or coresspondence education as well.
In order to meet the demand of skilled and educated labour and employees across various
industry verticals, the government through the ministry of information technology and
communication of Indonesia has increased its focus on digital mode of education in the last few
years. The rising flexiblity of teaching mode such
In 2013, the digital education market in as live video streaming, online tests and others,
Indonesia stood at USD 302.4 million and has provided huge driving force to the education
witnessed a significant growth of 28.8% sector in the country, resulting in impelling the
from USD 234.7 million in 2012
revenue of digital education market in the last
few years. In 2013, the digital education market in Indonesia stood at USD 302.4 million and
witnessed a significant growth of 28.8% from USD 234.7 million in 2012. The proportion of
spending on digital education in Indoesia in the total education spending in 2013 was 1.7%
which rose from 0.9% in 2008 and is further expected to reach 2.5% by 2018.
The Indonesian population has showcased an inclining interest in the social media, digital
communication and other technological advancements. During 2013, there were 72.7 million
internet users in the country, which increased from 59.6 million in 2012. In terms of social
network users, the total population using social networks were recorded as 67.1 million in 2013.
Additionally, the rising personal disposable incomes has enabled the Indonesian citizens to
afford technology products such as personal computers, laptops, smartphones, tablets and others.
This increasing penetration of technology has also provided a strong impetus to the growth of
digital education market in the country in the last few years. The total spending on digital
education in Indonesia has grown at a prolific CAGR of 27.7% from 2008-2013. The advent of
numerous learning tools such as LMS, MOOCs and others has provided a new face to the
learning standards in the country, which in turn is majorly contributed by the increasing demand
of extended learning services.
21

Various colleges, schools, private and government universities in Indonesia have been
increasingly adapting to the digital education methods, in order to provide a better teaching and
learning facility to the students. Majority of the Indonesian population encompasses talented and
skillful human resource, who can contribute to the world of science and academia, particularly in
the niche sectors. Indonesia also possesses the world’s largest coast line of 81,000 km, which
provides a huge scope for the study of marine diversity and science. A gamut of opportunities is
available in numerous fields such as climate change, herbal medicine, agro forestry, plantation
technology and few more. Currently, there is a lack of courses and teachers available in such
fields, which acts as a potential opportunity for growth in the future. With the arrival of digital
education in the country, the aforementioned challenges are being addressed, which will further
supplement the growth of the market.
Figure 3: Indonesia Digital Education Market Size on the Basis of Revenue in USD Million
and Percentage Share in Total Education Spending, 2008-2013
350.0 2.0%
302.4
300.0
1.5% 1.7%
1.5%
250.0 1.3% 234.7
Percentage
USD Million
1.2%
1.1%
200.0 178.6
0.9%
1.0%
146.3
150.0
113.4
100.0 89.2
0.5%
50.0
0.0 0.0%
2008 2009 2010 2011 2012 2013
Source: Primary Research and Industry Sources, Ken Research
22

SEGMENTATION
3.1. BY CONTENT AND TECHNOLOGY SERVICES, 2008-2013
The digital education market in the country is primarly divided into two major classifications
namely: content services and technology services. The content services encompasses the
published content in the written, voice or audio format, from which a user or a student gains the
understanding about a particular subject. The content includes course structure, multi-media,
testing, assesments and others. The growing need of technology oriented training which includes
aircraft maintenence lessons, car driving lessons, pshychomotor tests and others have created a
demand for simulation training content as well, which is also a part of digital content. Various
content service providers have been hugely
Rising need for multi-media and online capitalizing on the growing demand of digital
tests have strongly contributed to the content to be published on e-learning platforms.
increasing share of content services in
the market in the last few years.
The revenue procured by content service
providers has dominated the overall digital
education market revenues in Indonesia in the last few years. İn 2013, the content services
contributed a share of 65% in the overall revenue of digital education market which has
increased from 59% in 2008. Rising need for multi-media and online tests have strongly
contributed to the increasing share of content services in the market in the last few years.
The introduction of digital education methods and tools has improvised the educational system in
Indonesia. The educational institutions in the country collaborate with digital education
providers, in order to equip their classrooms with digital educational facilities. For instance,
BINUS University has collaborated with a leading telecom company named ‘Telkom Id’ for
internet and complete broadband access within the university, recently. Leading educational
institutions and corporate training centers are now focusing on improving the quality
instructional content and effective assessment and monitoring tools.
Technological service is another category of the digital education market in the country. It
encompasses the software platforms, online tests softwares, smart classes, authoring tools and
others. In 2013, the revenue generated by technology services providers in the country was USD
105.8 million thus contributing a share of 35% to the market value.
23

Figure 4: Indonesia Digital Education Market Segmentation by Content and Technology
Services on the Basis of Revenue in Percentage, 2008-2013
100.0%
90.0%
80.0% 39.0% 37.7% 36.1% 35.9% 35.0%
41.0%
70.0%
60.0%
Percentage
50.0%
40.0%
30.0% 61.0% 62.3% 63.9% 64.1% 65.0%
59.0%
20.0%
10.0%
0.0%
2008 2009 2010 2011 2012 2013
Content Service Technology Service
Table 2: Indonesia Digital Education Market Segmentation by Content and Technology

Services on the Basis of Revenue in USD Million, 2008-2013
Particulars 2008 2009 2010 2011 2012 2013
Content Service 52.6 69.2 91.1 114.1 150.4 196.6
Technology Service 36.6 44.2 55.2 64.5 84.3 105.8
Total Digital Education Market Revenue 89.2 113.4 146.3 178.6 234.7 302.4
24

3.2. BY TYPE OF EDUCATION (K-12, POST K-12, CORPORATE
TRAINING, PRE K-12 AND VOCATIONAL TRAINING), 2013
The penetration of digital education in Indonesia has increased at a rapid pace in government and
private schools, pre-nursery schools, school labs, colleges and universities, in the last few years.
The market in terms of value has registered a stupendous double digit CAGR 27.7% during the
period 2008-2013. The model of e-learning has improved the conventional mode of education in
Indonesia lately. In 2013, the K-12 education
Owing to the fact that a large proportion dominated the digital education market revenue,
of the population of Indonesia is young, with a share of 34.9% in the overall revenue of
the K-12 segment has dominated the
digital education market in the country. Owing
overall digital education market in the
last few years.
to the fact that a large proportion of the
population of Indonesia is young, the K-12
segment has dominated the overall digital education market in the last few years. As on August
2014, 26.2% of the Indonesian population belonged to 0-14 years and 17.1% of the population
belonged to 15-24 years of age group. Additionally, the school going population is relatively
fonder of technology related products, such as laptops, tablets and others, which further provides
opportunity to the digital education service providers to build user friendly software platforms
for this young consumer base. In 2012, the high schools students contributed a share of 47.9% in
the total internet users in the country.
The rising demand of skilled labor, human resources in advanced fields such as management,
technology and others has led an increase in the demand for digital education products in the
country from post K-12 students. The increasing trend of part-time or correspondence academic
education has led to this segment acquiring the second largest position in the digital education
market revenue in the country, as recorded in 2013. In 2013, the post-K-12 education segment
contributed a share of 29.7% in the revenue of digital education market in Indonesia and led to
revenue generation worth USD 89.8 million. The demand for jobs in various fields such as
marine engineering, under water science, food and consumer products and others has been
witnessing an incline in the recent years, further encouraging people to continue to pursue
education via digital means, in order to enhance their skills and expertise.
The digital education market in Indonesia has also witnessed a growing demand from corporate
sector in past years. Numerous leading enterprises in the country have incorporated and
promoted the use of digital education to educate their employees regarding the rules, regulation
and ethics of the firm. The growing need of corporate training has hugely influenced the
corporate individuals to develop new skills and enable them to understand their job role and
functioning of the industry. Thus, anything newly initiated in a firm is equally communicated by
25

means of internet, intranet and other digital education modes to the employees. Businesses with
large distribution chains have utilized various digital education tools to instruct their sales and
distribution personnel, such as spreading the newest advancements in the product. In 2013, the
corporate training contributed a share of 19.8% in the overall revenue of digital education market
in the country.
The rising demand of multi-media content in the field of digital education has been experienced
in the country, lately. This is majorly due to the fact an average learner is required to learn via
audio, video and textual means, in which pre-K-12 also played a crucial role. In 2013, the pre-K-
12 population accounted for 9.5% of the digital education market revenue in Indonesia. Pre-
nursery and nursery classes have largely been using digital education means in order to education
kids in an interactive manner. Various content and technology developers use vivid combination
of colors, animated characters, cartoons and others means for making the learning process easy
for the kids.
The vocational training courses, which include a number of courses such as art and crafts,
photography, stitching, cooking, learning new language and others, contributed a share of 6.1%
in the overall revenue of digital education market in the country during 2013.
Figure 5: Indonesia Digital Education Market Segmentation by Type of Education (K-12,

Post K-12, Corporate Training, Pre K-12 and Vocational Training) on the Basis of Revenue
in Percentage, 2013
6.1%
K-12
9.5%
34.9% Post K-12
19.8% Corporate Training
Pre K-12
Vocational Training
29.7%
26

Table 3: Indonesia Digital Education Market Segmentation by Type of Education (K-12,
Post K-12, Corporate Training, Pre K-12 and Vocational Training) on the Basis of Revenue
in USD Million, 2013
Categories 2013
K-12 105.5
Post K-12 89.8
Corporate Training 59.9
Pre-K12 28.7
Vocational Training (art and crafts, photography, stitching, cooking, learning new language and others) 18.3
Total 302.4
27

4. INDONESIA DIGITAL EDUCATION CONTENT
SERVICES MARKET INTRODUCTION AND SIZE,
2008-2013
The revenue generation of content development services in digital education market has been
increasing prolifically owing to the rising demand of digital published content across various
schools, colleges and universities in the last few years. Moreover, rising disposable incomes of
the Indonesian population coupled with
A growing need for corporate digital increasing penetration of technology has led to a
learning services has emerged in the rise in the spending on digital learning services
country with a shortage of skilled
and consequently on devices such as
workers.
smartphones, tablets and notebooks. The method
of imparting knowledge through conventional classrooms, which is characterized by students
undergoing hour-long teacher lectures, is witnessing a paradigm shift through increasing usage
of technology-based teaching tools. This has made the education sessions convenient for both
students and teachers. There has been a rise in the number of schools digitizing its education
system in Indonesia in the last few years. This has made the teaching environment more
comprehensive and interactive, facilitating the learning process in a user friendly manner.
Leading digital education product vendors have been making huge efforts to create a school
learning session more interesting and interactive, with the implementation of curriculum-mapped
digital or 3D multimedia contents. Moreover, the increasing access to computers at homes has
made learning much more interesting for young children. Students are becoming more reliant on
online resources for assignments and increasing number of students are opting for online tutoring
classes to gain further knowledge. The revenue from digital education content services market in
the country stood at USD 196.6 million in 2013, which grew from USD 52.6 million in 2008,
thus witnessing a remarkable CAGR of 30.2% during the period.
Digital learning content service segment has drawn an equal attention from professionals and
businesses, as it allows them to upgrade their skills and increase efficiency, by saving training
costs. A growing need for corporate digital learning services has emerged in the country with a
shortage of skilled workers. Even though, it is a challenge for organizations to ensure quality and
quantity of online training services along with managing cost, the demand for e-learning services
has grown continuously during the last few years. Corporate e-learning is an effective mode of
training as it helps to reduce travelling cost and time. Corporations are able to reduce
approximately 40-60% of cost by replacing an instructor-led training (ILT) with the electronic
delivery.
28

Figure 6: Indonesia Digital Education Content Service Market Size on the Basis of Revenue
in USD Million and Growth in Percentage (%), 2008-2013
250.0 31.4% 31.8% 31.8% 35.0%

30.7%
196.6 30.0%
200.0 25.2%
25.0%
150.4
Growth%
USD Million
150.0 20.0%
114.1
100.0 91.1 15.0%
69.2
52.6 10.0%
50.0
5.0%
0.0 0.0%
2008 2009 2010 2011 2012 2013
4.1. INDONESIA DIGITAL EDUCATION CONTENT SERVICES

MARKET SEGMENTATION
4.1.1. BY PRODUCT CATEGORIES (OPEN COURSEWARE,

MULTIMEDIA, ONLINE TESTS AND OTHERS), 2013
Open courseware includes digital education platforms providing open access for online courses.
The customer (student) is required to pay a onetime sign up fee or per subject for attaining the
certification of accomplishment of a particular course via such open courseware. Various
companies have been stepping afoot in the field of online open courseware segment as large
number of people in the country has been looking forward to learn new subjects while working
in a full time job. This has enabled the population of Indonesia to enhance their skills while
maintaining a full time job. Various schools, universities, and private coaching institutions in
Indonesia offer MOOC services across various courses and subjects. A number of Indonesian
universities have established OCW repositories as a part of Open Courseware Consortium. These
29

include Universitas Indonesia (UI), Universitas Sumatera Utara (USU) and the Udayana
University (UNUD). In 2011, the University of Sumatera Utara Open Course Ware was named
as the best new site in the Open Course Ware Consortium. The site encompasses study materials
from 177 courses in 12 disciplines, including materials from 20 textbooks. The content is
available both in English as well as in Indonesian language.
Massive Open Online Courses (MOOCs) is one of the fastest growing in the digital educational
landscape in Indonesia. For people whose
In 2013, the Open courseware contributed primary learning motive is to attain the
a share of 69.7% in the overall revenue of
certification or recognition, they are still
the digital education content service
market in the country, thus generating
required to pay higher cost for traditional
revenue of USD 137 million. education programs. However, companies such
as Zenius, Codemi and others have been
providing various courses for those who are looking forward to learn various courses for free of
cost or at nominal price. These companies provide video, audio and text format content online.
Additionally, MOOCs charge modest fees from certification options, as well as from
partnerships with corporate employers to provide targeted learning programs. In 2013, the Open
courseware contributed a share of 69.7% in the overall revenue of the digital education content
service market in the country, thus generating revenue of USD 137 million.
The rising demand for digital education from schools and universities has also provided a strong
impetus to the multi-media facilities on learning software platforms. Virtual learning has shown
immense potential to fill in the gap that exists due to geographic restrictions by improvising the
quality of traditional methods of learning. This includes a gamut of interactive applications
which requires multi-media features on a software platform. Multimedia content lies at the
second largest position in the digital education content service market in Indonesia in terms of
revenue, holding nearly 18.9% of the market value as observed in 2013. The rate of adoption of
digital education resources has continuously grown among students pursuing higher education
since it saves both money and time.
The implementation and deployment of multimedia features on digital education software
platform is a complex, time-consuming and a resource intensive task. It requires a strong project
management, which consumes a lot of manpower and technical expertise. Leading software
developers in the field of digital education have been making efforts to create customer friendly
user interface which facilitates increasing recognition amongst the masses.
Online test and assessments category contributed a share of 8.8% in the digital education content
service market in Indonesia in 2013.Various schools and colleges have now use online test
facilities in order to filter out the right candidates for the admission procedures, thus contributing
to the revenue of the market Leading Business schools, engineering colleges, commerce and
30

liberal arts graduates are adapting to the digital test assessment tools nowadays, thus supporting
market growth. Other digital education contents contributed a small share of 2.6% in the overall
revenue of digital education content service market in the country in 2013.
Figure 7: Indonesia Digital Education Content Services Market Segmentation by Product

Categories (Open Courseware, Multimedia, Online Tests and Others) on the Basis of
Revenue in Percentage, 2013
2.6%
8.8%
Open Courseware
Multimedia
18.9%
Online Test
69.7% Others
Note: Others include articles, digital training modules and others
Table 4: Indonesia Digital Education Content Services Market Segmentation by Product

Categories (Open Courseware, Multimedia, Online Tests and Others) on the Basis of
Revenue in USD Million, 2013
Particulars 2013
Open Courseware 137.0
Multimedia 37.1
Online Test 17.3
Others 5.2
Total 196.6
Note: Others include articles, digital training modules and others
31

4.1.2. BY TYPE OF CONTENT FORMAT (VIDEO, TEXT AND AUDIO),
2013
The digital education content services market can also be segmented on the basis of type of
content format. The video content accounted for a share of 39.8% in the overall revenue of
digital education content service market in Indonesia. Majority of the software platforms in
digital education industry are Operating system (OS) agnostic, which has led to growth in the
multi-media feature in the content which is published for digital education. It has been observed
that text format content contributed 34.3% share in the revenue of digital education content
services in the country in 2013. The purpose of digital education is to conduct learning lessons
and assessments via online channel, hence, a large proportion of students and working
population opt for digital education for studying their respective subjects and courses.
Audiobooks have also been a popular trend among Indonesians. Various content publishers
facilitate the students by offering ebooks and other form of reading material in an audio format.
By the help of such education providing platforms, students can also download it in their music
player and can also access the directory of audio lectures of their respective courses. In 2013, the
audio format content contributed a share of 25.9% in the overall revenue of digital education
content market in Indonesia.
Figure 8: Indonesia Digital Education Content Services Market Segmentation by Type of
Content Format (Video, Text and Audio) on the Basis of Revenue in Percentage, 2013
25.9%
39.8%
Video Text Audio
34.3%
32

Table 5: Indonesia Digital Education Content Services Market Segmentation by Type of
Content Format (Video, Text and Audio) on the Basis of Revenue in USD Million, 2013
Particulars 2013
Video 78.2
Text 67.4
Audio 51.0
Total 196.6
4.1.3. BY END USERS, 2013
The content service market is majorly dominated by the revenue generated from educational
institutions including schools, colleges and universities. The educational institutions contributed
a share of 72% in the digital education content service market in Indonesia in 2013. Leading
companies in digital education market focus more on content related services, as the education
centers majorly uses digitalized published materials in order to provide a better learning
experience to the students. The corporate training centers majorly use live video streamlining,
online assessments and other tools, which makes them more technology service oriented user. In
2013, the corporate users contributed a share of 28% in the digital content service education
market in Indonesia. It has been observed that the corporate organizations spend relatively less
on content services as compared to education institutes, as they exclusively focus on their
product oriented training and skill development of their employees.
33

Figure 9: Indonesia Digital Education Content Services Market Segmentation by End
Users on the Basis of Revenue in Percentage, 2013
28.0% Education Institutions and

Students
Corporates
72.0%
34

5. INDONESIA DIGITAL EDUCATION TECHNOLOGY
SERVICES MARKET INTRODUCTION AND SIZE,
2008-2013
The rising penetration of information technology in the country has created a positive impact in
the field of education. The use of digital learning tools has already been implemented by several
educational institutions in Indonesia, which in turn has resulted in the growth of the technology
service market in the last few years.
In 2013, the technology services The digital education oriented applications require
generated annual revenue of worth large investments in terms of infrastructure systems, in
USD 105.8 million which grew at a terms of commercial as well as open source e-learning
prolific CAGR of 23.7% from USD applications. If an institution plans to use open source
36.6 million in 2008.
digital education application, it would need more cost
to hire technical staff, in order to maintain and upgrade the e-learning application. This has posed
a major challenge in implementing the technological related service in the education sector, in
Indonesia in the past. However, due to increasing private as well as government investments in
the education sector, a paradigm shift from conventional mode of education to the digital concept
has been witnessed in the economy. Various educational institutions in the country are making
efforts in order to build their own online learning systems for in-house as well as correspondence
students. The advent of cloud based learning facilities across various schools and colleges has
also been witnessed in the last few years. Additionally, various corporate universities such as
Orange, ISCLO and others have been using latest technological methods such as smart classes
and others, in order to provide education related services such as providing new skill-set training
to their employees.
Technology service providing vendors have been stepping afoot in the field of education in
Indonesia, catering to the rising need of part-time academic education as well as from corporate
training centers. These vendors offer a wide range of applications in such as creation and capture
tools, enterprise systems and others. These technology segments encompasses various services
with companies offering one or more of the following products such as authoring and web
publishing tools, learning management and administration systems, smart classes software and
services and others.
The market for technology service in digital education market in Indonesia has been significantly
increasing in the last few years. In 2013, the technology services generated annual revenue of
worth USD 105.8 million which grew at a prolific CAGR of 23.7% from USD 36.6 million in
35

2008. Rising disposable incomes of the Indonesian population led to an increasing in the
spending on advanced technological educational products and services, thus developing in
overall education sector in the country. Moreover, the rising penetration of technology and
internet has provided a strong impetus to the digital education market in the last few years.
Figure 10: Indonesia Digital Education Technology Service Market Size on the Basis of
Revenue in USD Million and Growth in Percentage (%), 2008-2013
120.0 35.0%
30.7% 105.8
100.0 30.0%
24.7% 25.6%
84.3
25.0%
Growth%
USD Million
80.0 20.9%
64.5 20.0%
60.0 55.2
44.2 16.9% 15.0%
40.0 36.6
10.0%
20.0 5.0%
0.0 0.0%
2008 2009 2010 2011 2012 2013
36

5.1. INDONESIA DIGITAL EDUCATION TECHNOLOGY
SERVICES MARKET SEGMENTATION
5.1.1. BY PRODUCTS (LMS, CONTENT AUTHORING TOOLS, SMART

CLASSES AND OTHERS), 2008-2013
The technology oriented services in the field of digital education market are majorly classified
into three major segments such as LMS, content authoring tools and virtual or smart classes. The
Learning Management Systems (LMS) is a software application designed to evaluate and
manage the learning process of a learner. It is made by using modern technology to plan, deliver
and evaluate the overall learning performance of the end-user. The LMS could also be
understood as an online information system, which supervises online-learning courses, monitors
student’s participation and tracks performance of
The LMS segment dominated the digital the learners. These LMS applications support
education technology services market in academic and corporate organizations to
Indonesia by holding a share of 79.9% in effectively manage capabilities and deliver
the market revenue in 2013 which rose
learning and development courses as per industry
from 76.4% in 2008
regulations and government standards. LMS acts
as a central hub of learning for distributed learners enabling training, information sharing, and
improvements in the learner’s performance. LMS offers flexible and continuous learning
platform for self improvement. These solutions provide more choices for instructors with regards
to course design, session delivery, and participant evaluation. The LMS segment dominated the
digital education technology services market in Indonesia by holding a share of 79.9% in the
market revenue in 2013 which rose from 76.4% in 2008.
The authoring tools, another segment of the market, are the plug-ins available on the digital
education learning platforms, which accounted for a share of 10.1% in the overall technology
service segment during 2013. These authoring tools have been increasingly gaining presence due
to the fact that these tools make the learning experience user friendly. This also creates flexibility
in user’s learning experience, as due to the availability of such authoring tools, a user can decide
the learning process as per his/her pace or needs. With the help of authoring tools, users can
customize their digital learning courses such as automatically fit as per the screen size and
resolutions of the user device. Navigation Buttons, Seekbar, Menu, Volume On/Off and other
features are supported with the help of authoring tools as well.
37

The smart classes feature is third segment of the technology enabled services in the Indonesia
digital education market, accounting for a share of 5.1% in the overall revenue of technology
service market in 2013. A smart classroom is equipped with multimedia components which are
designed to enhance the teaching and learning process. The smart classes have been created by
collaborating both the classroom and digital distance learning environments. It is also referred to
as blended learning process. The increasing adoption of mobile devices and digital educational
content coupled with the rising demand for online learning has resulted in huge infrastructure
upgrades and investments in the education sector in Indonesia. The growing developments in the
field of technology, has led to a shift from the traditional classroom based learning to a more
student oriented simulation based learning methods. The other digital education technology
services contributed the remaining 4.9% in the revenue of the digital education technology
services market in Indonesia in 2013.
Figure 11: Indonesia Digital Education Technology Services Market Segmentation by
Product Categories (LMS, Content Authoring Tools, Smart Classes and Others) on the
Basis of Revenue in Percentage, 2008-2013
100.0%
5.2% 5.4% 4.9% 5.1% 5.0% 4.9%
95.0%
6.5% 6.1% 5.8% 5.4% 5.1%
90.0% 7.3%
85.0% 10.6% 10.4% 10.1%

11.0% 10.8%
11.1%
80.0%
Percentage
75.0%
70.0%
65.0% 78.2% 78.5% 79.2% 79.9%
76.4% 77.1%
60.0%
55.0%
50.0%
2008 2009 2010 2011 2012 2013
LMS Content Authoring Tools Virtual Classroom/Smart Classes Others
Note: Other Including softwares and applications used for technology services
38

Table 6: Indonesia Digital Education Technology Services Market Segmentation by
Product Categories (LMS, Content Authoring Tools, Smart Classes and Others) on the
Basis of Revenue in USD Million, 2008-2013
Particulars 2008 2009 2010 2011 2012 2013
LMS 27.9 34.1 43.1 50.6 66.7 84.6
Content Authoring Tools 4.1 4.9 6.0 6.8 8.8 10.7
Virtual Classroom/Smart Classes 2.7 2.9 3.4 3.7 4.5 5.4
Others 1.9 2.3 2.7 3.4 4.3 5.1
Total 36.6 44.2 55.2 64.5 84.3 105.8
Note: Other Including softwares and applications used for technology services
5.1.1.1. INDONESIA LMS SYSTEM MARKET SIZE, 2008-2013
The School of Internet (SOI) Asia works in alliance with a number of Indonesian universities in
order to promote the use of online distance education. The SOI Asia is an international project
utilizing satellite-based Internet, which distributes/delivers live lectures sourced from a number
of various Asian higher education institutions. There are a number of Indonesian universities
participating in the SOI Asia project,
The leaders in the LMS market are investing in
acquisitions and new technologies to enhance and
including Brawijaya University Sam
develop their existing product portfolio in order Ratulangi University, Hasanuddin
to address the increasing demand for learning University, Institute of Technology
management systems across the academic and Bandung and University of Syiah Kuala.
corporate users in the country Furthermore, the SOI Asia broadcasts
the proceedings of workshops, conferences, talks and symposia, and provides online access to
past lectures and course materials in the fields of ICT, science and environmental studies, as
well. These efforts have encouraged various companies to step afoot in providing technology
services related to digital education in the country. Most prevalent technology used in the field of
digital education is the LMS platforms across various education institutions and corporate
houses.
The educational institutions, universities, corporate and training organizations are strategically
deploying LMS applications to promote flexible and continuous learning. The Learning
39

Management Systems market in Indonesia for academic users into K-12 and higher education
has been gaining massive traction in the last few years. A significant portion of education
Information Technology (IT) spending is being utilized for implementation of LMS. The
corporate user segment in the LMS market deploys such platforms into Small and Medium
Businesses (SMBs) and enterprises pertaining to the size of businesses. The adoption of LMS
applications is also useful to analyze the education performance of the corporate users in
different verticals including Banking, Financial Services and Insurance (BFSI), consulting
services, government, healthcare, manufacturing, retail,
In 2013, the LMS market in telecom, IT, and media, and others.
Indonesia was valued at USD
84.6 million which increased at The movement towards this model has the potential to
a CAGR of 24.8% from USD 27.9 significantly change the nature of costs and therefore
million in 2008 address the cost barrier in the field of education. The
courses created with Rapid Authoring tools are compliant to industry standards such as SCORM
and AICC. Due to this, the user’s progress can be easily tracked on the LMS where the e-courses
are deployed. Even if the user accesses the e-courses through multiple devices, the progress is
tracked synchronously by the help of a sign up feature in LMS. Thus, the learner can access the
course through multiple channels of delivery such as online, offline or mobile.
In 2013, the LMS market in Indonesia was valued at USD 84.6 million which increased at a
CAGR of 24.8% from USD 27.9 million in 2008. The introduction of Software as a Service
(SaaS) delivery model has further accelerated the adoption of LMS within the traditional
learning and development framework. The Learning Management Systems can be used for a
number of purposes such as content management, student management, performance
management, collaboration, administration, and others. The LMS providers are partnering with
publishers and collaboration platform providers, and leveraging on their partner channels to
deliver greater value to the customers. The leaders in the LMS market are investing in
acquisitions and new technologies to enhance and develop their existing product portfolio in
order to address the increasing demand for learning management systems across the academic
and corporate users in the country.
40

Figure 12: Indonesia LMS Market Size on the Basis of Revenue in USD Million and
Growth Rate in Percentage (%), 2008-2013
90.0 84.6 35.0%

31.8%
80.0
30.0%
26.5% 26.7%
70.0 66.7
22.0% 25.0%
Growth%
USD Million
60.0
50.6
50.0 17.3% 20.0%
43.1
40.0 34.1 15.0%
27.9
30.0
10.0%
20.0
5.0%
10.0
0.0 0.0%
2008 2009 2010 2011 2012 2013
Source: Primary Sources, Ken Research
5.1.2. BY END USERS, 2013
The technology services are majorly employed in the corporate sectors as compared to the
educational institutions. The presence of technology related services are indispensible for a
corporate organization, where huge number of employees at long distances are required to
receive training related to their skills, company’s products and others. The digital learning
techniques have enabled the corporate organizations to minimize their training costs by
delivering training via online channel, over long distances. Due to the availability of
infrastructure and IT requirements, the corporate in Indonesia spend relatively more on
technology services such as LMS, as compared to education institutions. In 2013, the corporate
contributed a massive share of 89.1% to the overall spending on digital education technology
services in the country, whereas, the education institutions spent the remaining 10.9%.
41

Figure 13: Indonesia Digital Education Technology Services Market Segmentation by End
User on the Basis of Revenue in Percentage, 2013
10.9%
Corporates
Educational Institutions
89.1%
42

TRENDS AND DEVELOPMENTS
RISING PENETRATION OF TABLETS/ PHABLETS AND SMARTPHONES
The Indonesia digital education market has been gaining massive growth, owing to the
increasing prevalence of hi-tech electronic gadgets in the country. The manufacturing and retail
business in the country is growing rapidly due to burgeoning population leading to growth in the
domestic market and increasing cost competitiveness. In Indonesia, the fourth most populous
country in the world), several electronic products manufacturing companies have launched
economic as well as expensive range of mobile and tablet devices in the recent years. This has
provided a huge driving force to the digital education market. People have started using
Smartphone and tablets for the purpose of education, nowadays. Various MOOCs and LMS in
the field of digital education offer a flexible and compatible version of their websites that
functions appropriately on the mobile devices.
Various educational institutions and corporate training centers provide free wifi zones, which
enable the learners to access digital education tools, resulting in augmenting the need of blended
learning process. E-books, e-library, online assessments and other tools can be easily accessed
through such devices. Therefore, increasing penetration of technology in the country has been
driving the growth digital education market in the country. It is expected that by 2018, the
smartphone user will reach 194.5 million in Indonesia from 57.7 million in 2014 which further
brightens the prospects of digital education industry.
43

Figure 14: Indonesia Smartphone Users in Million, 2010-2018
250.0
194.5
200.0
149.9
Million
150.0
113.0
100.0 82.1
57.7
50.0 38.5
23.8
11.7
4.3
0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Note: The figures from 2014 are estimates
MOUNTING DEMAND OF GAMIFICATION AMONGST MOBILE USERS
Indonesia has the youngest mobile internet user base in South East Asia. Nearly 30% off the
mobile internet users in the country are graduates/postgraduates. Gamification applications have
become a popular trend in Indonesia nowadays. Games are the most downloaded mobile content
among Indonesian users. These gamification apps and websites enable the user to play puzzle
and strategy games. Using gamification apps sharpens the user’s lateral thinking, thereby,
educating the user in an entertaining manner. Some of the leading telecom or mobile network
companies also name it as edutainment. Growing smartphone penetration in the country has been
a driving force for the gamification apps. Various users also play multi-player strategy games
and various puzzles and vocabulary oriented games, which all are easily available in the form of
mobile apps. Various companies in the field of digital education market have been using
gamification platforms in order to make learning process more interactive for the users.
44

MOOC’S SERVICE PLATFORMS AIDING DIGITAL EDUCATION MARKET
The digital education market in the country has been witnessing huge number of developments in
the recent years. Historically, with the advent of internet in various schools and colleges, the
digital education was limited to only LMS and Live video streaming. However, the arrival of
MOOCs has provided a new dimension to the digital education sector in the recent years.
MOOCs have been increasingly gaining recognition amongst the digital education users who are
involved in part-time or correspondence academic education. These MOOCs service platforms
are catering to the increasing demand of online courses and vocational education, thus leading to
growth of digital education market in the country.
ONLINE GROUP STUDY AND SOCIAL MEDIA USERS DRIVING GROWTH
Indonesia’s population contributed the largest proportion to the overall usage of social
networking sites in the world in 2012. In 2012, higher school students contributed the largest
share of 47.9% in the overall internet users in the country, whereas, 20.8% of the internet users
were graduates. This reflects the popularity of social media and internet among the youth
segment of the population in Indonesia, who are the target audience of digital education as well.
Indonesians prefer social networks over emails for staying in touch. Nearly 77% of the online
activities in Indonesia involve social networking sites. The increasing trend of online group study
and online classes has been witnessed in the country during last few years. This has led to an
increase in the number of students or learners opting for digital education means. The companies
in digital education industry are making efforts to utilize social media platforms to educate
people. The rapidly increasing number of online group study and social media users has together
augmented the growth of digital education market in Indonesia in the last few years. In the
upcoming years, it is expected that the social media users in Indonesia will reach 134.7 million
by 2018.
45

Figure 15: Indonesia Social Network Users in Million, 2010-2018
160.0
140.0 134.7
119.7
120.0
105.3
100.0 91.8
Million
79.2
80.0 67.1
60.0 52.1
40.0 34.4
22.7
20.0
0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Note: The figures from 2014 are estimates
Figure 16: Indonesia Internet Users by Education Level in Percentage, 2012
7.5% 1.4%
High School
11.1%
Graduate
Middle School
47.9%
11.3%
Diploma
Elementary School
20.8% Post-Graduate
Source: Indonesia Internet Service Provider Association
46

INGRESS OF HTML5 IN DIGITAL EDUCATION SOFTWARE PLATFORMS
The arrival of HTML5 in the digital media platforms has enabled various content and technology
service providers firms to cater to the increasing demand of multi-media and graphic oriented
courses and lessons. The HTML5 supports scalable vector graphics, which makes the courses
responsive to the learner’s requirements. Students can continue their sessions as per their pace
and need, due to the availability of authoring tools in HTML5 format web portals for digital
education. This improved JavaScript performance of these sites is expected to become a
mainstream development platform for sites which are made for the purpose of digital education.
ESCALATING M-EDUCATION MARKET IN INDONESIA
The m-education market in Indonesia has emerged at a very fast pace in the last few years.
Currently, the m-learning market in the country is at a nascent stage. However, the market has
registered momentous growth in the recent years. Students The sales of electronic gadgets such
as tablets, phablets and smartphones have witnessed a surge in the last few years. Devices such
as laptops, personal computers and dedicated education tablet devices such as Amazon Kindle
are the most popular devices used for digital education among the Indonesians. Rising
smartphone users, wifi networks and broadband access have driven the growth of m-education
market in the country during the last few years.
The m-education provides educational content to students, teachers and employees on the mobile
operating systems. All learners can have the benefit of learning anywhere, anytime and on the
move with educational content made available on the mobile networks by the help of devices
such as tablets, smart phones and feature phones. In 2010, the m-education market in Indonesia
generated annual revenue of worth USD 0.6 million, which increased at a prolific CAGR of
107.2%, reaching USD 5 million in 2013. M-education has brought a powerful shift in the
education system in Indonesia. It encompasses not only how learning is being delivered but
enhances teaching & assessment together with educational administration and management via
mobile technologies.
Mobile operators have been developing their expertise in delivering and maintaining content in
different formats for various devices and interaction format. This would ensure that learning
materials are compatible with different types of devices. Several operators are dealing in
delivering Cloud Services, where the majority of content and data resides remotely in a central
system rather than on the device. This is helpful for educational institutions who do not wish to
manage large IT systems in-house. Most mobile operators are establishing strategic partnerships
with other organisations, including content providers, apps developers and vertical industry
partners in different industries, in orde to provide end-to-end services.
47

Figure 17: Indonesia m-Learning Market Size on the Basis of Revenue in USD Million,
2010-2013
6.0
5.0
5.0
4.0 3.6
USD Million
3.0
2.0 1.7
1.0 0.6
0.0
2010 2011 2012 2013
MERGERS AND ACQUISITIONS IN INDONESIA DIGITAL EDUCATION MARKET
The Indonesia digital education market is comprised of numerous companies ranging from small
and medium enterprises. In order to build a strong consumer base in the country, these
companies are required to create massive awareness about their programs, products and services.
Due to this, these companies have to build strong online presence as well as offer a number of
incentives such as providing free voucher for few education programs, providing free access to
video content and others. Due to all these factors, the companies which are at budding stage are
witnessing problems related to cash flow. Since majority of the companies lack funds, they are
required to either operate by establishing a strategic alliance with a relatively bigger company or
be acquired by any leading company in the same domain. For instance, Electude, a leading
global provider of automotive e-learning solutions, established a new distribution agreement with
Mitra Jaya Prima Sarana (MJPS), a distributor specialized in automotive inspection solutions in
2012. It has enabled the company to promote its product Argo broadly in Indonesia. Similarly, in
2014, a leading digital learning provider Appstronic has entered into a partnership with IMC AG,
which is a European’s leading provider of learning technology solutions.
48

7. EXPENDITURE INCURRED ON DIGITAL
EDUCATION SYSTEM IN INDONESIA BY
DIFFERENT PARTIES
The rising population of the country has provided a huge impetus to the development of
education infrastructure, which is majorly supported by government and private investments in
the country. A large proportion of the Indonesian population belongs to middle and lower
income households, who cannot afford expensive education courses. This in turn has augmented
the demand for online, part-time or correspondence academic education in the country. In light
of this, various companies and private universities have been establishing their online presence,
in order to cater to the increasing demand of online educational courses in the country. Various
courses for management, technology, commerce, liberal arts and sciences are now available
online.
The rising trend of blended learning process amongst the young Indonesian population has
gained prominence in sector in the recent years. Renowned schools and colleges in Indonesia
have been adapting to digital education techniques such as smart classes in order to provide a
better mode of education to their students. It has been observed that the smart classes are being
extensively used by corporate training centers, in order to provide education to their employees.
Due to well developed infrastructure and availability of sound funding to the corporate sector,
there has been an increase in the conducting smart classes for the purpose of providing training
and education courses to their employees in the country during last few years. An average
corporate training centre in Indonesia spends IDR 1,100-1,200 million for digital education
facilities.
Additionally, the digital education market in Indonesia has also witnessed the arrival of
asynchronous content services, in which a student can undergo pre-assessment tests, e-books and
e-library facilities. Due to this, various schools and private institutions can use offline mode of
digital education. On an average, a private education institution spends IDR 50-100 million on
digital education facilities. Such schools also provide free accessibility of internet to their
students within the school premises.
A government educational institute spends an average amount of IDR 10-20 million for digital
education facilities. The government institutions are very well funded by government authorities
and these schools/colleges also receive the hardware and software equipments at nominal rates.
Small and medium size companies in the field of digital education in the country are making
efforts to form strategic tie ups with government schools, in order to cater to the demand for
49

digital content and technology services. While a university spends an average of IDR 1,000-
1,100 million on digital education system, an individual or a student spends IDR 5,000-30,000
per month on the digital education fees.
Table 7: Average Amount Spent on Digital Education System by Government Schools,

Private Schools, Universities, Corporates and Students
Parties Involved Spending (in IDR) Spending (in USD)
Government Schools 10-20 million USD 1-2 Thousand
Private Schools 50-100 million USD 5-10 Thousand
Universities 1,000-1,100 million USD 100-110 Thousand
Corporate Houses 1,100-1,200 million USD 110-120 Thousand
Student 5,000-30,000 per month USD 0.5-3
50

8. MARKET SHARE OF MAJOR PLAYERS IN
INDONESIA CORPORATE DIGITAL EDUCATION
MARKET, 2013
The Indonesia digital education market is fragmented across various local domestic as well
international players in the field of education technology. Centrinova Solusi Edukasi (CSE) is the
leading player in the field of digital corporate training in Indonesia. The company has
contributed a share of 60% in the total number of registered users for corporate training in the
Indonesia digital education market in 2013. The
Centrinova Solusi Edukasi (CSE) is the company has a huge clientele including various
leading player in the field of digital
corporate training in Indonesia and has a
government organizations such as, Bank BRI,
share of 60% in the total number of Indonesia Stock Exchange, International
registered users for corporate training in Organization for Immigration and others.
the Indonesia in 2013. Furthermore, various private companies such as
PT Sanggraha Daksamitra, Bank Maumalat,
General Motors, Kompas Gramedia, Ditjen Pajak and Assa.
Sentra Studia Indonesia, which is also known as Globalearning Centre, held a share of 10% in
the total registered users for the corporate training environment via digital education in Indonesia
in 2013. The company largely operates with B2B clients, in which the corporate training plays a
major role.
Netpolitan is another leading firm in digital corporate training market in Indonesia. It is one of
the leading companies in Indonesia which provides skill development, product awareness and
other related digital learning courses to the corporate clients such as GE Finance, CIMB Niaga,
Siemens, Telkomsel, Sampoerna, Bank Mandiri and various others. In 2013, it held a market
share of 9% in terms of the total registered users for corporate development in Indonesia digital
education market in 2013. Other companies such as Learning Resources, Brainmatics, Lutan
Edukasi and a few others together contributed 21% share in the market in terms of the overall
registered users for digital corporate education in Indonesia in 2013.
51

Figure 18: Market Share of Major Players in Indonesia Corporate Digital Education
Market on the Basis of Registered Users, 2013
6.0% Centrinova Solusi Edukasi

5.0% (CSE)
5.0% Sentra Studia Indonesia (SSI)
5.0%
Netpolitan
Learning Resources
9.0%
60.0% Brainmatics
10.0% Lutan Edukasi
Others
52

9. COMPETITIVE LANDSCAPE OF MAJOR PLAYERS
IN INDONESIA DIGITAL EDUCATION MARKET
Indonesia E-learning and digital education industry is very niche with around 20+ players
existing largely in the K-12 online education, online content platform, virtual classroom tutoring
and online English learning space. The larger revenue share in the market is concentrated among
the few major early movers in the industry. The companies are majorly small in team size as it is
difficult to be scalable in this segment. Almost over 10 companies in the sector have team
strength of less than 10 professionals while other 7 companies have less than 50 people. There
are only a few players who have been able to reach to the employee strength of over 50
employees.
9.1. BY START-UP FIRMS
Table 8: Competitive Landscape of Leading Start-ups in Indonesia Digital Education

Market
Company Company Overview Fees Major Courses Target Key Developments

Name Charged Offered Audience
HarukaEdu • HarukaEdu, is an Free of Online classes, The company • In March 2014,

online ed-tech charge for online courses targets schools the company
startup that online and online and education launched an online
provides online content and certifications institutions for class named as
education for MOOCs across all tie-ups. Technopreneurshi
schools students. service. subjects for For online p, in an attempt to
school level create
• The company For online degree and
certification education. certifications, entrepreneurship
largely focuses on
providing quality, affiliated by Major services the company awareness in
affordable, various offered by the targets school technology
accessible, and colleges, company and post K-12 industry.
sociable online variable fee is include: students. • The courseware
education. charged per recorded included a number
course. learning, direct of topics such as
• In light of the
instruction, cloud computing, l
mounting demand
collaborative earning analytics,
of online education
learning, game-
courses, the
53

company has independent based learning,
partnered with learning and personalized
leading education personalized learning environm
institutions and learning. ents
training providers. and mobile learnin
• HarukaEdu offers g.
both free and paid
online degree,
courses and
certification
programs.
Zenius • Founded in 2007, Premium PT Zenius Elementary to • In 2013, Zenius

PT Zenius accounts can Education higher had more than
Education is be activated operates 4 education 90,000 members
engaged in e- by purchasing different students. accessing its
learning business in a Zenius platform: content.
Indonesia. voucher. • online content • Provides more
• The company This provides for all than 30,000 videos
provides video an access to subjects and 1,000 modules
content and the site from available for for twelve-year
exercises ranging one-month to K-12 school subjects
from elementary to a yearly education accessible via
senior high school basis. through multimedia
students. The voucher Zenius.net platform
• Due to the growing is also • virtual • During the same
demand of digital available in classroom year, the company
education in the K- physical tutoring had also launched
12 segment, Zenius form, which through an offline mode of
has been making can be bought Zenius-x.com learning as well.
huge efforts in an from In the offline
• English
attempt to create an authorized mode of learning,
online
alternative mode of resellers. the company
learning
education to the platform offers a wide
conventional through range of products
education. zenuisenglish. such as CDs,
• In order to access com DVDs and Blue-
the content, rays.
students can either
be a regular
member or a
premium member.
• Regular users can
only access limited
54

content on Zenius,
while premium
members, in
addition to getting
all the materials,
will get content
updates and special
promos.
Codemi • The company was Available for Corporate Students, B2C • As in 2014, the
founded in 2013, free. training and customers company has been
focusing on business related looking forward
creating digital courses, for investors, as it
content available to majorly. is planning to
school students as expand its
well for the business in the
corporate digital education
employees. market in
• The company is Indonesia.
providing online • Majority of the
education in courses offered on
Indonesia through a the company’s
number of features website are taught
such as video, and mentored by
audio, and teaching faculties
presentations. as well as top
• The company’s management
primary business people belonging
comes from content to various startups
services, catering to to established
school education. companies.
Sibejoo • The company was Video content K-12 education B2C customers: The company’s web
founded in 2011, on the and vocational mainly students. portal comprises of
with a key focus on company’s courses. more than 1,000
providing online website is videos as recorded
content to school free of cost. in 2013.
and college Sibejoo sells It is expected that
students. its products in the company will be
• The company the form of adding more video
provides video books and content ranging from
content, learning DVDs, in various subjects
exercise and online order to earn taught in K-12.
text format content. revenue.
• The company earns
55

its revenues
majorly from
online advertising
and offline mode of
education (CD,
DVDs).
Source: Ken Research Compilation
9.2. BY LEADING CONTENT AND TECHNOLOGY SERVICE

PROVIDERS
Table 9: Competitive Landscape of Major Content and Technology Service Providers in

Indonesia Digital Education Market
Company Company Overview Fees Major Courses Target Audience Key

Name Offered Performance
Indicators
Globalearning • Founded in 2006, Depending Business The company • In 2013, the

Center PT. Sentra Studia upon the oriented courses provides its e- company has
Indonesia (SSI) is number of in the field of learning facilities achieved a
one of the leading users in a marketing, to B2B customers. milestone of 10
privately held particular finance, HR, Its clientele years of
digital education client’s strategy, soft includes a gamut existence in the
systems and organization. skills and of industries such digital
solution providers others. as banking, education
in Indonesia. insurance, market.
finance, energy,
• SSI provides • The company
pharmaceutical,
education services has more than
consumer goods,
by using electronic 50 customers
telecommunicatio
channels and digital with more than
n, government
media, in order to of 1 million
and public sector.
provide teaching users.
process. • The company
• SSI is mainly has more than
serving corporates 30 learning
for strategic management
enterprise implementation
eLearning and integration
program to drive • Provided more
56

better business than 2,500
results. hours of
• In the stream, SSI eLearning
is serving education contents on the
sector for online website.
education
enablement through
cloud-based
learning services.
• The company has a
subsidiary named
Mitra Studia
Persada (MSP),
which majorly
focuses on
providing e-
learning for
financial services in
Indonesia.
• Company employs
over 50
professionals in
Jakarta
Wisma • Wisma Bahasa Enrollment Javanese, B2B as well as The digital

Bahasa provides e-learning fee: USD 10 Indonesian and B2C customers of learning services
course in Package 20 other south any age and race. are offered across
Indonesian, sessions (min. Asian various time
Javanese languages package): languages zones in south
online. USD 500 east Asia.
• It includes live
streaming with the
language coach.
• The company also
provides its
services to the B2B
customers.
PT. Mitra • The company is an The online The company The company is • The company
Integrasi Information education is offers a number catering the e- has launched
Komputindo Technology free of of courses learning demand an e-reading
(MIK) Service company charge. ranging from from Indonesian tool (an e-
based in Jakarta, However, the banking & and regional learning
Indonesia. learning financial corporations, who Solution) in
industry are seeking
57

• MIK was courses from subjects, soft consultation, 2012.
established in 1998 CDs and skills subjects, services and • It is an e-
with a key focus on Offline English infrastructure learning tool
building IT design, Player is language skills needs in that enables a
development and chargeable. courses, subject comprehensive digital content
managing services. certification & eLearning to be converted
test preparation, solution.
• The company is and packaged
quality as a SCORM
also dealing in
management content that
multimedia
and few others. can be
industry by
providing interfaced with
technology services any SCORM-
to their clients such compatible
as Offline content. LMS.
• It is serving
numerous
companies in the
field of banking
and financial
services industry as
well as in education
sector.
• SentraLearning
Offline Player
(Offline eLearning
Tool) is an
eLearning tool that
enables learning
activities to be
tracked without
online connection
to the learning
management
system.
Anagata • Anagata Depending K-12 Education Anagata Riswara The company has
Riswara Riswara (AR) is an upon the size and other e-Learning for established tie
Online Learning of a company vocational Corporates and ups with leading
Solutions company (Clientele) academic Universities. universities such
that helps corporate courses such as as BINUS
companies or language University.
education learning.
institutions, private
and government
universities to
58

improve their
performance
through learning
and technology.
• Anagata
Riswara (AR)
designs a number
of learning
solutions for
corporate trainings
to academic
programs.
KT Gongsin • The company was Not Foreign KT provides IT • The company

founded by Korea Disclosed Languages technology has served
Telecom and an (Korean, service and nearly 700 full-
education Japanese, educational time students
consultant named Mandarin, content on B2C and
Gongsin in French), level. approximately
Indonesia, with a academic 1,400
key focus on education physically
providing digital programs such challenged
education to the as curriculum students.
school students in elementary
• In 2013, the
Indonesia. school, junior
company
high school for
• The company also launched free
the National
has a local online trial
Examination
education centre classes for the
and Computer
that has been students, in
Skills program.
bridging the digital order to
divide in the increase its
primary schools of market
the country. presence in
• KT E-Learning Indonesia.
Center is local
education
community in
Indonesia which
has collaborated its
operations with
local colleges.
Appstronic • The company is Variable as The company The company • In 2014, the
one of the leading per the establishes the mainly deals with company
digital education number of LMS and ERP B2B level of formed a
59

service providers in users to be systems for e- customers. strategic
Indonesia. signed up for learning process Majority of the alliance with
• The company was a particular in a particular clients are leading
founded in set of LMS company or an corporate European
Malaysia, however, and education companies. learning
it now operates in requirement institution. solutions
Singapore and of digital named IMC
Indonesia as well. content. AG.
• Its product • As in 2013, the

portfolio ranges company has
from developing created 50
courseware to modules with
establishing over 100
learning learning hours
management of e-learning
system. content. It is
estimated that
• The company the company
provides digital serves more
learning Content than 10,000
Development customers
services which across south
includes effective East Asia.
SCORM
compliance e- • In light of the
Learning growing trend
courseware. of m-learning
among
• The company has
Indonesian
also established
citizens, the
LMS (Learning
company has
Management
launched its e-
System), which is
Learning
useful for planning,
mobile app,
management,
IMC player. It
implementation and
can be
control in an
downloaded to
individual’s
use learning
learning process.
content on a
mobile device,
even at no
internet
connection.
Centrinova • The company was Variable The company The company • As in 2011, the
Solusi founded in 2006, charges as per provides e- majorly deals with company had
60

Edukasi with a key focus on the size of the learning business and more than
developing e- employee services corporate offices 100,000 users.
learning solutions base of the majorly in the for providing e- • The firm also
to the corporate client. field of learning service has uploaded
customers in banking, solutions. digital content
Indonesia. finance, The company also of more than
insurance, provides end to 450 hours.
automotive, end solutions for
government learning and
agencies and training needs of
others. its clients.
The company’s
clientele includes
General Motors,
Bank BRI,
Indonesia Stock
Exchange,
Kompas
Gramedia, Ditjen
Pajak, Assa,
International
Organization for
Immigration, PT
Sanggraha
Daksamitra, Bank
Maumalat and
various others.
Netpolitan • The company was Variable The company The company has • In 2013, the
founded in 1998, charges as per provides a huge clientele company
headquartered in the size of the technology and across various stepped afoot
Germany. In 2000, employee content services industries such as in the m-
the company base of the to B2B clients. Technology, learning
relocated its client. Education, BFSI market.
headquarters in and others.
• The company
Jakarta. Some of the has launched a
• Netpolitan has been company’s clients tablet learning
operating in are GE Finance, content
Indonesia with a CIMB Niaga, development
key focus on the Siemens, platform,
developing content Telkomsel, which could be
and LMS Sampoerna, Bank useful for the
technology for Mandiri and learners who
providing digital various others. read and study
education service in on mobile and
61

the country. tablet devices.
• In 2007,
Netpolitan
launched 1st
gamification
content in the
country. With
this, the
learners can
receive
education via
mode of
playing games
on the
electronic
devices.
Lutan • The company has Variable Change The company • Over the last
Edukasi more than 25 years charges as per Management, targets B2B few years, the
of experience in the the size of the General clients. company has
field of training and employee Management, gained huge
development of the base of the Customer global presence
corporate clients. client. Services, in digital
• Lutan Edukasi education
Sales
provides cost market.
Management,
effective, skill- • The company
Marketing
based blended has spread its
Management,
learning solutions business
in Indonesia. Managing operations
Personal across various
• It is one of the
Effectiveness, countries such
leading companies
that provide both Human as the US,
digital education Resources and Europe,
content and Australia,
Organizational
technology services Singapore,
Development
in the country. Hong Kong
and few others.
and others.
Source: Ken Research Compilation
62

FUTURE OUTLOOK AND PROJECTIONS, 2014-2018
In Indonesia, the rising prevalence of technology in the field of education has brought a gamut of
innovative methods of teaching, especially for K-12 and higher education students in the last few
years. Even though the digital education market in Indonesia has been registering massive
growth in the recent times, there are a number of challenges which are faced by the industry still,
which might hamper the growth in the
One of the biggest challenges for education coming years. One of the biggest
institutions is the difficulty in adopting a secure challenges for education institutions is
IT infrastructure for digitalizing the whole
the difficulty in adopting a secure IT
education ecosystem.
infrastructure for digitalizing the whole
education ecosystem. Moreover, lack of awareness among institutions about the latest
technological trends and developments has also become a major challenge for the digital
education market in the country. However, with rising awareness, the demand for digital content
will continue to upscale the growth of digital education content services in the market in the
coming years as well. With rising demand, more content in the form of video, audio and text
format, is expected to be uploaded on LMS, MOOCs available, which in turn will further drive
the market further. Learning digital content service providers such as Globalearning, Zenius,
Codemi and others have been increasing their product bandwidth by uploading content on their
web portals.
In the upcoming years, it is expected that the number of small and medium scale software
vendors in the country will increase, due to the rising demand of digital education services. As a
result of this, it is expected that the fast growing digital education companies supported by
venture capitalists and private equity firms, will acquire several small scale e-learning players
having niche focus either on design and education management tools.
The Government of Indonesia has become more flexible in terms of rules and regulations for
education sector and has provided numerous opportunities to the private players, which in turn
has improved the prospects of education sector in the country. The government provides various
subsidized plans for installing broadband and wifi connections across various schools, colleges
and universities in Indonesia. In the coming years, the increasing socio-economic development in
the country will provide better prospects to education market, which in turn will the digital
education market in the country.
63

The growing demand of LMS platforms across private institutions has also been witnessed in the
country during the last few years. The number of students enrolled in business and finance
management courses was nearly 80,000 in 2009. Indonesia has around 14 accredited business
schools made up of private institutions and faculties within state universities such as Universitas
Indonesia and Gadjah Mada University. These business schools and other private education
institutions have now adapted to blended learning process, in which conventional mode of
education is integrated with digital education methods. The exchange of knowledge between the
country and the rest of the world has become crucial factor for improving the education
condition in private and government universities in the country. Thus, it is anticipated that in the
coming years, various modern tools and techniques such as smart classes, LMS, gamification and
others will be deployed across more number of colleges, universities, corporate training centers
and schools in the country, which will further aid the growth of digital education market value.
The overall digital education market in Indonesia is expected grow at a CAGR of 15.9% from
2013-2018 and is projected to reach a value USD 632.6 million by 2018.
Figure 19: Indonesia Digital Education Market Future Projections on the Basis of Revenue
in USD Million and Growth Rate in Percentage, 2014-2018
700.0 25.0%
22.3% 632.6
600.0 565.0
20.0%
17.5% 500.2
500.0
Growth%
USD Million
434.4 15.2%
13.0% 15.0%
400.0 369.7
12.0%
300.0
10.0%
200.0
5.0%
100.0
0.0 0.0%
2014 2015 2016 2017 2018
Source: Ken Research Estimates
64

10.1. BY CONTENT AND TECHNOLOGY SERVICES, 2014-2018
Several education institutions and corporate training centers are gradually shifting from
traditional approach of imparting knowledge to digital approach nowadays. This has fuelled the
demand for both digital content and technology services in the market. Moreover, individuals
themselves are engaging in self-paced digital education via massive open online courses,
eBooks, and other educational digital content. The increasing penetration of players
concentrating on content development and education management tools online coupled with
growing number of venture capital and private investments are predicted to drive the growth of
digital education content and technology services market in Indonesia in the coming years. It is
projected that the content service market will reach USD 426.4 million by 2018, thus increasing
its share to 67.4% in the market revenue and the technology service will reach USD 206.2
million in 2018 from USD 105.8 million in 2013.
Figure 20: Indonesia Digital Education Market Future Projections by Content and
Technology Services on the Basis of Revenue in Percentage, 2014-2018
100.0%
90.0%
34.2% 33.8% 33.2% 32.9% 32.6%
80.0%
70.0%
60.0%
Percentage
50.0%
40.0%
65.8% 66.2% 66.8% 67.1% 67.4%
30.0%
20.0%
10.0%
0.0%
2014 2015 2016 2017 2018
Content Services Technology Services
65

Table 10: Indonesia Digital Education Market Future Projections by Content and
Technology Services on the Basis of Revenue in USD Million, 2014-2018
Particulars 2014 2015 2016 2017 2018
Content Service 243.3 287.6 334.1 379.1 426.4
Technology Service 126.4 146.8 166.1 185.9 206.2
Total 369.7 434.4 500.2 565.0 632.6
10.2. CAUSE AND EFFECT RELATIONSHIP IN INDONESIA

DIGITAL EDUCATION MARKET
Table 11: Cause and Effect Relationship Analysis between Industry Factors and the
Expected Indonesia Digital Education Industry Prospects
Industry Factors Market Impact Comments
Increasing Spending on  Cause: Greater focus on skill development and demand for
Positive;
Education literate workforce has led to an increase in the consumer
spending on education in the country.
 Effect: This will result in impelling the demand for digital
content and technology services amongst the country’s
population.
Adherence to  Cause: The government of Indonesia has increased scrutiny on

Government Positive; the education sector in the last few years.
Recommendations  Effect: As a result, various schools and colleges are
recommended to create digitalized environment for teaching,
which in turn is expected to increase the revenue of the digital
education market in Indonesia.
Increase Penetration of  Cause: The rising trends of social media and increasing
Technology Positive; number of investments in ICT industry have impelled the
penetration of technology in the country.
 Effect: This is expected to augment the demand for digital
66

education tools as growing number of people in Indonesia have
been adapting to digital mode of education due to high
prevalence of technological tools, devices, software platforms
and others.
Increasing Demand for  Cause: The demand for skilled labor in domestic as well as
Skilled Labour Positive; international businesses such as manufacturing, technology,
geology, marine engineering, underwater study has been
witnessed in the country.
 Effect: Due to increase in the demand of skilled and educated
labor, various institutions and colleges have been providing part
time or online academic education to the population of
Indonesia, thereby contributing to the revenue of digital
education market in Indonesia.
Note: The shaded region indicates degree of impact on the market
67

11. MACROECONOMIC FACTORS AFFECTING
INDONESIA DIGITAL EDUCATION MARKET
11.1. ICT SPENDING IN INDONESIA, 2008-2018
Indonesia has been gradually becoming a major target market for leading players in the field of
technology, due to increasing spending on IT and related activities from the government as well
as the consumers. The total spending on IT in Indonesia has showcased a prolific CAGR of
18.4% from 2008-2013. In 2008, the overall spending on IT in Indonesia amounted to USD
6,292.2 million, which has substantially increased to USD 14,641.5 million by 2013. In light of
the increasing penetration of technology and internet, the country has become the largest
spending entity on IT in South East Asia and was ranked 19th in the global IT spending capacity
in 2013. The increasing preference of Indonesians towards tablets, smartphones and social media
has brought a dramatic shift in the IT sector of the country, which has led to a growth in the
investments in IT infrastructure development in the recent years. Since IT sector has a direct
bearing on the digital education market in the country, the increasing spending on IT is expected
to bring a positive influence on the revenues from digital education tools, software and services
in the country.
Indonesia spent USD 10,900 million on IT in 2011, showcasing a growth of 18.7% from the
previous year. Leading companies in the field of digital education has been making huge
investments for expanding their businesses, owing to the increasing demand of digital content
and technology enabled services in the country. In order to develop the IT infrastructure in the
country, the government of Indonesia has planned to take a number of initiatives such as
Indonesia Palapa Ring Project and Indonesia Economic Masterplan. By the help of these plans,
Indonesian government has planned to accelerate its economic development through developing
the ICT infrastructure in the country. This is expected to provide greater access of IT and its
related services in Jakarta and other cities of the country.
The sales of hardware components have contributed significantly to the total IT spending in the
country accounting for a share of 88.2% in 2011. Spending on hardware has been boosted by the
government’s decision to eliminate duties on components for personal computers in April 2010,
in order to make computers more affordable to the local consumer as well as for the B2B
consumers. IT services across the country recorded revenue of USD 759 million in 2011 while
software stood at USD 522 million. In the upcoming years, the sales of software are expected to
grow, which will make a substantial contribution in the overall IT spending in the country.
68

Figure 21: Indonesia ICT Spending in USD Million, 2008-2018
2018 24,670.0
2017 22,340.0
2016 20,500.0
2015 18,800.0
2014 16,500.0
2013 14,641.5
2012 12,900.0
2011 10,900.0
2010 8,992.5
2009 7,481.8
2008 6,292.2
0.0 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0
USD Million
Figure 22: Indonesia ICT Spending by Hardware, Software and Services on the Basis of
Contribution in Percentage, 2011
7.0%
4.8%
Hardware
Software
Services
88.2%
69

Table 12: Indonesia ICT Spending by Hardware, Software and Services in USD Million,
2011
Particulars 2011
Hardware 9,619.0
Services 759.0
Software 522.0
Total 10,900.0
11.2. CONSUMER SPENDING ON EDUCATION IN INDONESIA,

2008-2018
The greater the spending on education, the higher would be the spending on digital content and
technology. In 2013, the spending on digital education was 1.7% of the overall education
spending in Indonesia. With rising technological advancements and greater demand for digital
content, the share of digital education spending in total education spending in Indonesia is
predicted to reach 2.5% by 2018, thus creating favorable prospects for the market. Indonesia’s
future is hugely dependent upon the education sector, as it enables the country to innovate and
create jobs for the country’s rising population. In the last few years, various government and
private organizations have taken a number of initiatives in order to improve the infrastructure of
the education sector in the country. The launch of various online courses within state universities
as well as private business school, for catering to the growing demand for qualified professionals
and entrepreneurs has been witnessed in the recent years.
70

Figure 23: Consumer Spending on Education in Indonesia in USD Million, 2008-2018
2018 25,360.8
2017 23,657.4
2016 22,027.4
2015 20,490.6
2014 19,008.0
2013 17,600.0
2012 16,244.8
2011 15,188.9
2010 14,262.4
2009 13,435.1
2008 12,682.8
0.0 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0
USD Million
11.3. POPULATION IN INDONESIA, 2008-2018
Indonesia is the fourth most populated country in the world. Having grown at a CAGR of 1.4%
from 2008, the population of Indonesia was recorded to be 248 million in 2013. As on August
2014, 26.2% of the Indonesian population belonged to the age bracket of 0-14 years and 17.1%
of the population belonged to 15-24 years of age group. This age group forms the target audience
for digital education from academic perspective. Additionally, the school going population is
relatively fonder of technology related products, such as laptops, tablets and others, which
further provides opportunity to the digital education service providers to build user friendly
software platforms for this young consumer base.
The greater the population base of an economy, the higher would be the proportion of youth who
spend extensively on education. Due to increasing employment and business opportunities along
with augmenting demand of skilled labor, the demand for education is expected to rise, resulting
in augmenting the digital education market in Indonesia. Schools in Indonesia are now
introducing blended learning process for these students. Since the population of the country has a
direct bearing on the spending on education which also includes digital education, the revenues
71

of digital education market are also likely to get affected by this parameter in the future. The
population of Indonesia is estimated to reach 266.1 million by 2018 and it is expected to grow at
a CAGR of 1.4% during the period of 2013-2018.
Figure 24: Indonesia Population in Million, 2008-2018
2018 266.1
2017 262.4
2016 258.7
2015 255.1
2014 251.5
2013 248.0
2012 244.5
2011 241.0
2010 237.6
2009 234.3
2008 231.0
210.0 220.0 230.0 240.0 250.0 260.0 270.0
Million
Source: International Monetary Federation, Ken Research
11.4. INTERNET USERS IN INDONESIA, 2008-2018
The digital education market growth in Indonesia has grown remarkably in the last few years due
to a substantial increase in the internet user base in the country. The rapidly growing ICT
spending in Indonesia has led to development of infrastructure and technology, which has further
strengthened the internet user base in the country.
The rising demand of correspondence academic education coupled with impelling expenditure
on IT has impacted the overall digital market revenues in the country. As in 2012, the use of
social media network has been the largest as compared to any other country in South East Asian
region. There has been a year on year increase in the number of social media users, bloggers and
internet users in Indonesia. Increasing prevalence of social networks has encouraged school
students to establish online group studies on the online platforms. The Indonesian population has
72

been positively looking forward to choose a variety of courses from leading digital education
software platforms, MOOCs and LMS, lately. The awareness of software systems such as
MOOCs, LMS and others has prolifically increased in the country. However, the software
industry has been facing a number of issues of widespread piracy and security issues.
In 2013, the total number of smartphone users in Indonesia was recorded to be 67.1 million,
whereas, total social network users amounted to 38.5 million during the same year. The
increasing development of cloud based services has enabled the students to store their online
assessment tests, e-books and other forms of digital content on the cloud storage itself. The
establishment of cloud computing networks for schools and university campuses is another area
of focus for education focused IT spending which is expected to augment in the upcoming years.
In 2013, the total internet users in the country were 72.7 million, which grew at a CAGR of
22.4% from 2008. In the coming years, it is anticipated that the internet population would grow
at a CAGR of 10.4% from 2013-2018 and will account for 44.8% share of the overall Indonesia
population in 2018.
Figure 25: Internet Users in Indonesia in Million, 2008-2018
2018 119.2
2017 110.7
2016 102.8
2015 93.4
2014 83.6
2013 72.7
2012 59.6
2011 43.0
2010 41.9
2009 37.7
2008 26.5
0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0
Million
73

Table 13: Social Network and Smartphone Users in Indonesia in Million, 2010-2014
Particulars 2010 2011 2012 2013 2014(E)
Social Network Users 22.7 34.4 52.1 67.1 79.2
Smartphones Users 4.3 11.7 23.8 38.5 57.7
Note: ‘E’ denotes Estimated
74

12. APPENDIX
12.1. MARKET DEFINITION
Indonesia Digital Education Market: This refers to the total revenue generated from the
overall spending on digital education software and services such as learning management
systems, authoring tools, content in audio, video and text format and few others.
Indonesia Content Service Market: This refers to the total revenue generated from the overall
spending on digital education content services such as content in audio, video and text format
and few others. The content services encompass multi-media, open courseware, online tests and
others.
Indonesia Technology Service Market: This refers to the total revenue generated from the
overall spending on digital education technology services such as learning management systems,
authoring tools and smart classes.
Learning Management Systems Market: This refers to the total revenue generated from the
overall spending on learning management systems platforms. The total market size of LMS is
incorporated by the total spending on LMS software by education institutions and corporate
companies.
Massive Open Online Courseware Market: This refers to the total revenue generated from the
open courseware available online in Indonesia.
Smart Classes Market: This refers to the total revenue from the smart classes facilities
available on various LMS and other digital education websites.
Authoring Tools Market: This refers to the total revenue from the authoring tools available on
various digital education services providing websites. This includes the authoring tools available
on the learning management systems as well.
Multi-Media Content Market: This refers to the total revenue from the multi-media content
available on various open courseware and learning management systems online in Indonesia.
Video Content Market: This refers to the total revenue from the video content format available
on various open courseware and learning management systems in Indonesia.
75

Audio Content Market: This refers to the total revenue from the audio format content available
on various open courseware and learning management systems in Indonesia.
Text Content Market: This refers to the total revenue from the text format content available on
various open courseware and learning management systems in Indonesia.
Social Network: This refers to the websites which are primarily used for communication among
the masses, for instance, Facebook, twitter and others.
12.2. ABBREVIATIONS
3-D- Three Dimension

AICC- Aviation Industry Computer-Based Training Committee
AMC-After Maintenance Cost
B2B-Business to Business
B2C-Business to Consumer
BFSI- Banking, Financial Services and Insurance
CAGR- Compound Annual Growth Rate
ILT- instructor-led training
IT-Information Technology
ITB- Bandung Institute of Technology
ICT- Information Communication and Technology
KM-Kilometers
LMS-Learning Management System
MOOCS-Massive Open Online Courseware
OSOL-One School One Computer Lab
OCW-Open Courseware Consortium
PC-Personal Computer
76

PhD-Doctorate of Philosophy
RICE-Regional IT Center for Excellent
SaaS-Software as a Service
SCORM-Sharable Content Object Reference Model
SMB-Small and Medium Businesses
SME-Small and Medium Enterprise
USD-United States Dollar
UI-User Interface
UI- Universitas Indonesia
USU- Universitas Sumatera Utara
UNUD- Udayana University
77

12.3. RESEARCH METHODOLOGY
DATA COLLECTION METHODS
In terms of data collection, we have used both primary and secondary data sources.
Secondary Data Sources: Secondary data sources include the analysis of existing industry
factors, obtained from the International Monetary Fund (IMF), National Higher Education
Accreditation Board (BAN-PT), Globalearning Education, HarukaEdu, PesonaEdu and others
from magazines, journals and online articles. The secondary data sources are used to form the
initial perception and contention on several forces playing their role in determining the future
growth in the industry.
Primary Data Sources: Structured interviews are conducted through telecom with several
industry veterans including major decision makers of companies operating in the sector such as.
These interviews help the research team to authenticate the data collected from secondary data
sources and to reject or accept the hypothesis regarding the future projections.
Web-based survey
Executives from BINUS University, Telkom Id, Anagata Riswara, Zenius, Codemi and others
working in the field of digital education responded to the web-based survey. Executives
specialized in the field gave us a clear understanding of market structure and issues prevailing.
To ensure confidentiality and objectivity, the name of the respondents and companies has not
been disclosed. Executives were contacted by email. The target respondent holds the title of
Manager, Director, or Vice President operating in the digital education market in the Indonesia.
Focus Interviews
A new feature of the study is the use of “focus interviews” conducted with the support of
industry observers and experts, primarily relating to the market environment in respect to macro
economy and industry factors. These focus interviews are remarkably helpful to gather pertinent
information and standpoint from large number of industry professionals who have an expertise in
the industry.
78

APPROACH
Our research team follows a “Top-down” approach for the future projections in which they first
study the effect of economic factors and then industry factors on the sector.
This approach indicates the several independent industry variables and their degree of
relationship with the sector. The cause and effect relationship between the industry factors and
their degree of impact has been discussed and analyzed in Indonesia Digital Education Market
future outlook.
VARIABLES (DEPENDENT AND INDEPENDENT)
Reasons for the selection of these independent variables in bullets:
• Indonesia IT Spending: The growing broadband access and wifi networking reflects the
growing penetration of internet in the country. This has driven the country’s overall IT
spending, which in turn has led to a growth in the demand for digital education tools and
services in the country.
 Indonesia Spending on Education: The rising demand for skilled labour along with
growing infrastructure development has created a strong need for the education
institutions in the country. The greater the spending on education sector, the brighter are
the prospects for spending on digital education tools. The growing need for part time
and/or online education in the country drives the digital education market in the country.
 Indonesia Population: Rising disposable incomes along with the rising population in the
country has driven the digital education market in the country. With the increasing
population, the number of students in colleges, universities and schools will increase,
which in turn affects the demand for digital education services.
 Indonesia Internet Users: The Rising internet users in the country reflects the growing
penetration of technology and social media, which is expected to drive the digital
education market in the coming years.
The report applies Correlation and Regression analysis methods to forecast the future of the
industry. The capabilities of SPSS and predictive analytics software have been leveraged to
determine the relevant indicators used for forecasting this industry.
In the present case, Digital Education market revenue in USD Million has been taken as a the
dependent variable and other variables such as IT spending, spending on Education, Population,
Internet Users in Indonesia have been taken as independent variables.
79

Table 14: Correlation Matrix for Indonesia Digital Education Market
Particulars Indonesia Indonesia Indonesia Indonesia Indonesia

Digital IT Consumer Population Internet
Education Spending Spending on (Millions) Users
Market Size (USD Education (USD (Millions)
(USD Million) Million) Million)
Indonesia Digital Pearson 1 .989** .996** .983** .985**

Education Market Correlation
Size
Sig. (2- .000 .000 .000 .000
(USD Million) tailed)
N 6 6 6 6 6
Indonesia IT Pearson .989** 1 .955** .976** .983**

Spending (USD Correlation
Million)
Sig. (2- .000 .000 .000 .000
tailed)
N 6 11 11 11 11
Indonesia Pearson .996** .955** 1 .994** .981**

Education Market Correlation
Size (USD
Million) Sig. (2- .000 .000 .000 .000
tailed)
N 6 11 11 11 11
Indonesia Pearson .983** .976** .994** 1 .989**

Population Correlation
(Millions)
Sig. (2- .000 .000 .000 .000
tailed)
N 6 11 11 11 11
Indonesia Internet Pearson .985** .983** .981** .989** 1

Users (Millions) Correlation
Sig. (2- .000 .000 .000 .000

tailed)
N 6 11 11 11 11
Notes: * Correlation is significant at the 0.05 level (2-tailed).
80

** Correlation is significant at the 0.01 level (2-tailed).
From the correlation table, we can conclude that:

 The total spending on IT showcased a positive correlation of 0.989 with respect to the
market size.
 Spending on Education in the country represented a correlation of 0.996 with digital
education market
 The total population of Indonesia in the country showcased a positive correlation of 0.983
with the market
 Internet Users in the country showcased a positive and high correlation with Indonesia
Digital Education Market, representing a value of .985
Regression Matrix
A multiple regression model has been used through SPSS statistical tool which analyzes the
multiple correlation coefficients, R, its square, and an adjusted version of this coefficient as
summary measures of model fit. Further, R-Square is used to explain the validity of the
independent variables. R Square is also known as the coefficient of determination represents the
proportion of total variation in the dependent variable explained by the variation in the
independent factors.
Applying multiple regression analysis to a set of data leads to regression coefficients, one for
each explanatory variable. These coefficients give an estimated change in the response variable
associated with a unit change in the corresponding explanatory variable, conditional on the other
explanatory variables remaining constant.
Table 15: Regression Coefficients Output
Model Unstandardized Coefficients Standardized Coefficients
B Std. Error Beta
1 (Constant) 1336.445 392.962
Indonesia IT Spending (USD .005 .003 .199

Million)
Indonesia Education Market .053 .012 1.218

Size (USD Million)
81

Indonesia Population (Millions) -8.700 2.241 -.617
Indonesia Internet Users .965 .365 .200

(Millions)
Dependent Variable: Digital Education Market (USD Million)
FINAL CONCLUSION
The final conclusion regarding the expected value of dependent variable is determined by using
weighted average of the output of subjective judgment, primary research and SPSS output
opinions. The weights are assigned on the basis of effectiveness and accuracy of each output
according to the degree of confidence interval assigned to them. The weighted average method
enables us to filter out the possible noise in each computation method and help us to derive the
best possible future projections.
82

12.4. DISCLAIMER
The research reports provided by Ken Research are for the personal information of the
authorized recipient and is not for public distribution and should not be reproduced or
redistributed without prior permission. You are permitted to print or download extracts from this
material for your personal use only. None of this material may be used for any commercial or
public use.
The information provided in the research documents is from publicly available data and other
sources, which are reliable. Efforts are made to try and ensure accuracy of data. With respect to
documents available, neither the company nor any of its employees makes any warranty, express
or implied, including the warranties of merchantability and fitness for a particular purpose, or
assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any
information, apparatus, product, or process disclosed, or represents that its use will not infringe
privately owned rights.
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Indonesia Emarket

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Indonesia Emarket

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1

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

ROLE OF GOVERNMENT IN INDONESIA DIGITAL EDUCATION MARKET

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ROLE OF ICT IN INDONESIA DIGITAL EDUCATION MARKET

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Indonesia Digital Education Market Size

Digital Education Content Service Digital Education Technology Service

Open Courseware (MOOCs) Learning Management Systems

Multi-Media Content Content Authoring Tools

(USD 37.1 million) (USD 10.7 million)

Online Test/Assessments Virtual Classrooms/Smart

Other Content Services Other Technology Services

Source: Ken Research

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

Digital Education Web Portal

LMS: Access to Program and Course Student Personal Portal: Individual

Student views available courses in

Learning Management System Platform

Course Web Pages

Virtual Discussion Self Paced Online Tests/ Live Project

Instruction Modes and Authoring Tools

Static: Documents, Dynamic: Podcasts Social: Blog, Chat,

Source: Ken Research

© This is a licensed product of Ken Research and should not be copied

MAJOR GROWTH DRIVERS OF INDONESIA DIGITAL EDUCATION MARKET

MAJOR CHALLENGES FACED BY INDONESIA DIGITAL EDUCATION MARKET

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KEY OPPORTUNITIES FOR INDONESIA DIGITAL EDUCATION MARKET

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Table 1: Demand and Supply Analysis of Indonesia Digital Education Market

Source: Ken Research

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GOVERNMENT OF INDONESIA FOCUSING ON INCREASING

INCREASING OPPORTUNITIES IN THE FIELD OF VOCATIONAL TRAINING

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IMPLEMENTATION OF INDONESIA’S HIGHER EDUCATION ACT 2012

MEASURES TO OVERCOME THE BRAIN DRAIN ISSUE IN INDONESIA

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© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

Source: Primary Research and Industry Sources, Ken Research

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3.1. BY CONTENT AND TECHNOLOGY SERVICES, 2008-2013

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Content Service Technology Service

Source: Primary Research and Industry Sources, Ken Research

Table 2: Indonesia Digital Education Market Segmentation by Content and Technology

Particulars 2008 2009 2010 2011 2012 2013

Content Service 52.6 69.2 91.1 114.1 150.4 196.6

Technology Service 36.6 44.2 55.2 64.5 84.3 105.8

Source: Primary Research and Industry Sources, Ken Research

© This is a licensed product of Ken Research and should not be copied

© This is a licensed product of Ken Research and should not be copied

Figure 5: Indonesia Digital Education Market Segmentation by Type of Education (K-12,