Indonesia’s digital traffic has increased exponentially as a result of the surge in electronic transactions, internet content during the COVID-19 pandemic. Combine this with a rapid growth of startups and an increasing population, demand for hyperscale data centres are reaching newer heights.
Add to the mix, government initiatives, which are further accelerating the growth for digital infrastructure and greater connectivity across the country. All of which are contributing to a boom in innovative data centre solutions.
Increased focus
These developments have caught the eye of the French government, which, through its finance ministry and banking institutions, plans to provide US$190 million to fund a feasibility study for Indonesia’s national data centre project.
Indonesia’s National Development Planning Agency (Bappenas) has appointed the European country to carry out the study, which is to be conducted by French engineering firm Sofrecom, according to a report by Jakarta Post.
On April 2, NTT Ltd announced the opening of its newest and largest data center in Indonesia. The hyperscale data centre is located in Bekasi 30 kilometers from the heart of Jakarta. The demand for data storage and managed hosting services is expected to grow dramatically across Indonesia. Mizuho Tada, President Director, NTT Ltd. Indonesia said:
Jakarta 3 Data Center will accommodate the needs of clients, particularly cloud service providers and the financial industry, which require flexible facility designs to help them achieve their business objectives. NTT Indonesia already offers the Jakarta 2 Data Center, which attracts many service and content providers, and we can provide our local network services to and from our newly built Jakarta 3 Data Center. We hope to play a key role in providing vital data capacity at a high speed to keep Indonesia’s digital ecosystems and the digital economy ticking.
NTT views Asia Pacific as a key region, and Indonesia has become a strategic location with the new APRICOT submarine cable system. Jakarta 3 Data Center will drive business opportunities in Asia through the upcoming APRICOT cable system that will be operational in 2024, linking all its large-scale data centres in the region.
The data centre footprint expansion in Indonesia is part of the ongoing growth strategy by NTT’s Global Data Centers division, which operates one of the largest data centre platforms in the world. Indonesia is emerging as one of the region’s fastest growing markets for data centre space as a result of resource availability and government policy.
“Our continued commitment to Indonesia will help position NTT as a technologically innovative leader to address the industries of the future,” said Masaaki Moribayashi, President and Board Director for NTT Ltd
According to estimates, there are about 29 million new internet users, which has fuelled a boom in the e-commerce sector that has managed to grow by 37 per cent. Another reason for companies to set up data centres in Indonesia is the access to skilled talent, which can handle the ever increasing demands from users, in an efficient way. Marco Cioffi – Director of Project and Operations, DCI Indonesia said:
“Data center operations is about business process consistency, as we cannot afford mistakes such as human error impacting our operations. With that being said, automation shall be tailored and embedded to the business process, as a tool to ensure adherence to the process. We at DCI believe that data center operations shall be driven by business process, and automation and artificial intelligence shall act as the tools to ensure the process consistency.”
More operators coming
Apart from NTT, others too have zeroed in on Indonesia. In January, PT Aesler Grup Internasional Tbk (RONY) signed an agreement regarding a data centre construction with Huawei Digital Power. As a part of this agreement, Aesler Data Centre will be build in series of EcoGreen-interconnected data centre chain across Indonesia called AESLER-GREENIX, with a total capacity of 88 megawatts (MW), across several locations.
Around twenty data centre operators are looking at the possibility of launching operations in a technological park on Indonesia’s Batam island. Already, a data centre operator has sealed the deal after President Joko Widodo granted the park special economic zone (SEZ) status, according to a report in The Straits Times.
“Most of them were waiting first for the SEZ to happen and started conversations only around the beginning of this year,” Nongsa Digital Park senior executive director Marco Bardelli was quoted. “We have already signed with one party and I am having dialogues, at different stages, now with 19 different data centre parties,” he added.
Additionally, the greater Jakarta area is experiencing increasing adoption of cloud-based services, among consumers, businesses and government. Indonesia is also home to some of the fastest-growing start-up companies in South East Asia.
Private players such as Tencent and Princeton Digital Group have outlined their plans for setting up data centres in Indonesia. Recently, Tencent Cloud announced its plans to launch a second Internet Data Centre (IDC) in Indonesia by the end of this year. It had launched its first IDC in April. In August, Singapore-based Princeton Digital Group (PDG), announced its plans to come up with a greenfield development in Jakarta, a part of its Indonesia expansion plans.
The new 22MW data center, to be named Jakarta Cibitung 2 (JC2), is being built within the same 19,550m 2 campus that houses PDG’s existing data center JC1. “The Asia Pacific region is set to be the largest data centre market in the world, and this announcement underscores our vision to be the market leader in this region,” said Rangu Salgame, Chairman and CEO of Princeton Digital Group.
In June, Digital Edge, which is backed by Stonepeak Infrastructure Partners, acquired a controlling interest in one of the leading digital infrastructure service providers in Indonesia, PT Indointernet Tbk, with a USD 165 million investment. UK’s Pure Data Centres and Australian logistics firm LOGOS announced a strategic partnership to develop a hyperscale data centre in Jakarta.
According to Structure Research, the Jakarta data centre colocation market is still developing, and the sector is expected to grow at a five-year CAGR of 23.7 per cent through 2025.
Find out more at Indonesia Cloud and Datacenter Convention 2022 this 19th May 2022, Shangri-la Jakarta. It’s the largest annual gathering for Cloud and Data Center professionals in Indonesia.
