Cloud spending by APJ digital-native businesses to reach US$26.5 billion

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

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

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