Cloud Feeds Economic Growth, and Vice Versa

Business leaders seeking further proof that cloud computing is the future of enterprise IT and the backbone of economic growth need look no further than our Asia Pacific (APAC) region.

The public cloud services market in APAC—Asia Pacific minus Japan—will expand at an astounding compound annual growth rate of 26.4% from 2021 to 2026, generating US$165.2 billion in revenue at the end of that period, according to IDC estimates. Southeast Asian countries are in the sweet spot of that growth, with a projected cloud market CAGR of 21.5% between 2021 and 2025.

While 76% of the Asia Pacific organizations surveyed by IDC last year indicated they would be increasing their usage of cloud services in the next 12 months, an even larger percentage of organizations in several Southeast Asian countries are boosting their usage—92% in Thailand, 88% in the Philippines, 86% in Malaysia, and 81% in Indonesia. In Singapore, where the move to cloud computing is inextricably linked to the city state’s Smart Nation ambitions, financial services institutions, retailers, media companies, and a vibrant community of startups are among the most visible private-sector cloud champions. The Singapore government itself is on track to move 70% of its IT systems to the public cloud by the end of this year, excluding those containing highly sensitive data.

How does all that cloud expansion in the region correlate with economic growth?

It’s something of a “chicken or egg” proposition. Is the region’s rapid uptake of cloud services driving the robust economic growth of the region? That growth is expected to surpass 5% this year in Southeast Asia and 4% in the broader APAC region, faster than in practically every other part of the world. Or does the region’s rapid growth depend on its accelerated commitment to cloud computing?

The only logical conclusion is that cloud usage and economic growth is very much a circular dynamic, feeding off each other. Consider that one in three companies based in Southeast Asia will generate more than 15% of their revenue from digital products and services this year, compared to one in six in 2020, according to IDC. Most of those services are cloud-based.

JAPAC companies leading the cloud charge

As I meet with customers across Japan and Asia Pacific (JAPAC), I’m continually amazed by their ingenuity and ambition.

Companies as well as consumers in the region used to be known as prudent followers when it came to adopting the latest technologies. Now they’re among the leading developers and adopters of everything from supercomputers to 5G mobile communications to AI—all of it underpinned by cloud.

The use of cloud technology is truly bolstering businesses, thus supporting the economy and business growth. Among Oracle’s customers in the region, PETRONAS, Malaysia’s leading oil and gas company, took the extraordinary step of moving its mission-critical database workloads to an Oracle Cloud-Microsoft Azure Interconnect to benefit from the best of both worlds. The iconic Sydney Opera House, which is looking to create a more “intuitive, accessible technology experience” for its more than 900 employees and 11 million annual visitors, has tapped Oracle Cloud applications, integrated with its event management and ticketing systems, to improve budgeting and forecasting.

Closer to home in Singapore, MindChamps, which runs premium preschools throughout the city state, is relying on the high performance, uptime, and security of the Oracle Cloud to support its rollout of innovative new virtual learning programs. Singapore Pools, the state’s only legal lottery and sports-betting service, has migrated on-premises applications to the Oracle Cloud to give customers a more stable, secure, and transparent digital experience. Singapore-based global freight forwarder CWT Globelink adopted a wide variety of Oracle Cloud technologies to streamline its collection of customer data, help executives make more-informed decisions on business strategy and the development of new trade lanes, forecast company performance, and automate key processes.

Our commitment to the region is growing. Of the 41 cloud data centers Oracle operates worldwide, nine are in JAPAC, where consumption of Oracle Cloud services rose more than 60% in our 2023 fiscal year compared with the year earlier, a much faster acceleration than for any of our major competitors in the region. Our upcoming second cloud region in Singapore will help meet the tremendous upsurge in demand for cloud services in Southeast Asia and will enable us to offer customers true business continuity and disaster protection while meeting in-country data residency requirements.

I couldn’t be more excited about what’s to come in the region as we continue to work with our customers to solve their toughest problems and seize their biggest opportunities.