Report by Structure Research
Hyperscale cloud in APAC is quickly moving into the second tier of markets and Southeast Asia is leading the way. Singapore is already the region’s established hub, but the likes of Malaysia, Thailand, the Philippines and Vietnam all have real growth potential and are currently at various stages of development. But it is Indonesia that is far and away the market with the largest upside potential and the momentum in Jakarta over the last few years speaks to this reality.
Indonesia is the fourth largest country in the world by population and is now home to a burgeoning tech startup community that is serving a country jumping online at a frantic pace. The combination of unique linguistic and cultural characteristics, and tremendous scale, has enabled Indonesia to build homegrown Internet economy services. Indonesia is now home to nearly a dozen unicorns and basically all of them are running on public cloud infrastructure. To support this growth, hyperscale cloud providers need large quantities of data centre capacity and have been aggressively leasing hyperscale colocation as a result.
Healthy levels of hyperscale demand are not projected to subside any time soon. The market is squarely in the build-out phase and the absorption period is probably still a few years out as Microsoft Azure is not projected to come online till 2024. Microsoft is driving a lot of the activity on the ground right now simply based on its massive requirements. Its criticality is underscored by the fact that AWS has chosen to bypass colocation and self-build for the near-term. This takes a meaningful amount of demand out of the total addressable market.
AWS’s decision to self-build is not as devastating for colocation demand in Jakarta given that both US and Chinese hyperscalers are active in the market. Indonesia does not have the geopolitical baggage that has negatively impacted other markets in the region, like Australia and Hong Kong, and ensures that there will be plenty of hyperscale demand to go around. And of course, AWS is likely to lease colocation in the future as its needs to expand and diversify.
The Jakarta data centre colocation market continued to push forward during the pandemic and is projected to be worth $336.6m USD in 2022.The sector will grow steadily at a five-year CAGR of 22.7% through 2027, with hyperscale as the primary driver. Investors and operators expect demand and absorption to trend aggressively and inventory is being built, while land banks are being rapidly assembled, in anticipation of the growth to come. On a MW basis, total data centre colocation inventory in Jakarta is expected to grow at a five-year CAGR of 28%, with the wholesale inventory portion growing at a much higher five-year CAGR of 39%.
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 space 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.
Total 46 pages.