The data centre colocation market in Jakarta, Indonesia continues to evolve amid a complicated landscape marked by macroeconomic headwinds, supply chain issues, a shifting demand profile and changes in the competitive landscape. Despite the challenges, Jakarta remains one of the top up-and-coming markets in the APAC region and arguably the most important in Southeast Asia.
Public cloud infrastructure growth has been the driving force behind the Jakarta market’s development. But the decision by select hyperscalers to self-build their data centres has moderated the total addressable market at least for the near-term. Further impacting the demand profile has been the weak performance coming from the China-based hyperscalers. All three major Chinese clouds – Alibaba, Tencent and Huawei – are online in Jakarta, but their growth has been sluggish and this has translated into slower data centre colocation consumption.
The hyperscale self-build, however, has not been able to knock the market off course. The Chinese clouds, while growing slowly, are not a threat to self-build, while there is another tier of providers that are starting to consume in multi-MW increments and adding volume to the demand pipeline. Webscale providers like Akamai, DigitalOcean and OVHcloud are starting to build in APAC, while social media platforms like ByteDance, Meta and Sea Limited are also expanding aggressively. This growth is starting to land
in Indonesia and translating into demand for data centre colocation.
This tier of webscale demand, along with the need for hyperscalers to diversify their cloud regions and simultaneously get closer to end users, has created a meaningful level of edge-hyperscale demand. This demand is moving into the multi-MW tier, only makes sense in the colocation model and is primarily clustered around central Jakarta. This has solidified the hyperscale topology in Jakarta around three clusters: central Jakarta, Bekasi (near east and connectivity-centric hyperscale) and Karawang (far east and oriented to core hyperscale).
The Jakarta data centre colocation market continued to grow at a steady pace and is projected to be worth $395m USD in 2023 from a total colocation spend perspective, and grow at a five-year CAGR of 22.3% through 2028. Hyperscale is expected to be the primary driver. From an inventory perspective, the Jakarta market will have 151.5MW of total colocation capacity by the end of 2023, with this number jumping to 192.2MW next year and climbing to 462.8MW in 2028. There have been questions around an oversupply situation, but demand is healthy enough for this inventory to be consumed over time and even out any short-term imbalances in the demand-supply dynamic. Overall, despite macro headwinds and emerging challenges in the market, investors and operators are building and acquiring land in anticipation of steady absorption and overall market growth. The supply situation is something to monitor, but imbalances are to be expected in developing markets, with so many variables at work, and things should even out over time.
This report is an excellent resource for any service provider, investor or enterprise end user looking to understand and project the data centre market in Jakarta or find a service provider. The methodology applied continues to be the most robust in the industry. We track supply on a rack and power basis, split all the metrics along retail and hyperscale lines, and aggregate inventory in multiple tiers according to build status, absorption rates and maximum capacity levels. Hyperscale cloud nodes and on-ramps are mapped and a complete directory is provided.