Philbert Shih on the Indonesian Data Centre Market
Source: Data Center Knowledge
Cloud Platforms Fuel a Data Center Construction Boom in Indonesia
As one of Asia’s largest populations plugs in, demand for digital infrastructure skyrockets.
ST Telemedia, one of Singapore’s largest data center operators, announced this week that it’s expanding into neighboring Indonesia. The news followed recent moves by the largest American cloud providers to establish data centers there as well.
Indonesia, namely the area around Jakarta, is undergoing a data center construction boom. It’s a relatively small market today, but analysts that specialize in Asia-Pacific data center markets expect it to almost triple in size within five years, driven primarily by hyperscale cloud platforms.
Asia’s third most populous country is a relatively young digital services market, Phil Shih, managing director at Structure Research, told DCK in an interview. As more and more people come online, and as more local enterprises want to switch to cloud infrastructure instead of operating data centers inhouse, demand for cloud services is growing quickly, and so is demand for data centers to support those services.
Other factors at play are the Indonesian government’s slow-moving effort to prohibit digital services from storing citizens’ data outside the nation’s borders and the tight supply of land and power in Singapore, which has traditionally been the data center hub from where platforms served Indonesia and much of the rest of Southeast Asia, Shih said.
ST Telemedia, one of Singapore’s largest data center operators, announced this week that it’s expanding into neighboring Indonesia. The news followed recent moves by the largest American cloud providers to establish data centers there as well.
Indonesia, namely the area around Jakarta, is undergoing a data center construction boom. It’s a relatively small market today, but analysts that specialize in Asia-Pacific data center markets expect it to almost triple in size within five years, driven primarily by hyperscale cloud platforms.
Asia’s third most populous country is a relatively young digital services market, Phil Shih, managing director at Structure Research, told DCK in an interview. As more and more people come online, and as more local enterprises want to switch to cloud infrastructure instead of operating data centers inhouse, demand for cloud services is growing quickly, and so is demand for data centers to support those services.
Other factors at play are the Indonesian government’s slow-moving effort to prohibit digital services from storing citizens’ data outside the nation’s borders and the tight supply of land and power in Singapore, which has traditionally been the data center hub from where platforms served Indonesia and much of the rest of Southeast Asia, Shih said.
Land and power supply in Singapore is so tight that the government last year placed a moratorium on new data center construction until it figures out a solution.
American Platforms Follow Alibaba into Indonesia
Indonesia is one of few Asian markets outside of China that welcome Chinese cloud providers, Shih pointed out. While US-based cloud providers have been driving most of the data center growth elsewhere in the region (outside of China), they don’t dominate the market in Indonesia, which has a large Chinese-speaking population that uses Chinese apps and content.
Alibaba was first to land cloud infrastructure in Indonesia, Shih said. Tencent recently built a data center there. Google launched its cloud region in Indonesia last year, and Microsoft announced plans to build Azure cloud data centers in the country earlier this year. Google, together with Facebook, is also funding a new submarine cable that will link Singapore, Indonesia, and North America.
AWS announced plans for a Jakarta cloud availability region in 2019 but has remained silent on the subject since. Last January, however, an Indonesian government official told news reporters that the company would build data centers there, if not in 2021, then in 2022.
ST Telemedia, one of Singapore’s largest data center operators, announced this week that it’s expanding into neighboring Indonesia. The news followed recent moves by the largest American cloud providers to establish data centers there as well.
Indonesia, namely the area around Jakarta, is undergoing a data center construction boom. It’s a relatively small market today, but analysts that specialize in Asia-Pacific data center markets expect it to almost triple in size within five years, driven primarily by hyperscale cloud platforms.
Asia’s third most populous country is a relatively young digital services market, Phil Shih, managing director at Structure Research, told DCK in an interview. As more and more people come online, and as more local enterprises want to switch to cloud infrastructure instead of operating data centers inhouse, demand for cloud services is growing quickly, and so is demand for data centers to support those services.
Other factors at play are the Indonesian government’s slow-moving effort to prohibit digital services from storing citizens’ data outside the nation’s borders and the tight supply of land and power in Singapore, which has traditionally been the data center hub from where platforms served Indonesia and much of the rest of Southeast Asia, Shih said.
Land and power supply in Singapore is so tight that the government last year placed a moratorium on new data center construction until it figures out a solution.
American Platforms Follow Alibaba into Indonesia
Indonesia is one of few Asian markets outside of China that welcome Chinese cloud providers, Shih pointed out. While US-based cloud providers have been driving most of the data center growth elsewhere in the region (outside of China), they don’t dominate the market in Indonesia, which has a large Chinese-speaking population that uses Chinese apps and content.
Alibaba was first to land cloud infrastructure in Indonesia, Shih said. Tencent recently built a data center there. Google launched its cloud region in Indonesia last year, and Microsoft announced plans to build Azure cloud data centers in the country earlier this year. Google, together with Facebook, is also funding a new submarine cable that will link Singapore, Indonesia, and North America.
AWS announced plans for a Jakarta cloud availability region in 2019 but has remained silent on the subject since. Last January, however, an Indonesian government official told news reporters that the company would build data centers there, if not in 2021, then in 2022.
The cloud providers are looking to address demand from traditional enterprises in Indonesia, among whom cloud adoption rate is still relatively low, according to Shih. Additionally, “a lot of this public-cloud demand is being driven by a burgeoning startup community,” he said.
There is a number of local tech unicorns. The first to reach unicorn status was Gojek, which started as an Indonesian Uber of sorts but has eventually expanded into a platform for everything from ride-hailing to digital payments to app-based ordering of personal massages, hairstylists, and housekeepers.
Other examples of Indonesian unicorns include e-commerce player Bukalapak, travel-booking company Traveloka, and digital-payments company OVO.
New Hyperscale Data Center Cluster Emerging in Southeast Asia
Most of the tech action is taking place in and around Jakarta, the country’s cultural and political center. “Jakarta is the market right now and will be for a while,” Shih said. Naturally, it’s also where the bulk of data center construction is done.
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