Preparing Indonesia’s digital infrastructure for Southeast Asia’s booming digital economy
Published 17 December 2020
Southeast Asia has overtaken China as the leading mobile economy hotspot, with most of the growth happening in Indonesia, according to DCI Indonesia.
The region accounts for around 10% of the world’s total Internet users, with Indonesia reaching 175.4 million users, which is 64% of the country’s population, representing a growth of 20% or 29 million new users over the past two years.
As a result, Indonesia is expected to be one of the major three fastest-growing e-commerce countries globally along with India and Malaysia.
Meanwhile, the archipelago’s digital economy is expected to be the largest in Southeast Asia. According to the annual e-Conomy Southeast Asia study by Google, Temasek and Bain & Company, Indonesia’s market value is expected to triple to US$309 billion by 2025, driven by the rise of e-commerce, ride-hailing and online gaming.
Nevertheless, DCI Indonesia believes the country needs to upgrade the underdeveloped digital infrastructure that limits the public and private sector from reaping the full benefits of this billion dollar opportunity.
To do so, investing in ICT is key, especially data center and network capabilities, as these are backbones to the successful implementation of innovative technologies.
And with the growing volumes of data, in-house or multi-tenant data center operators in Indonesia need to prepare to meet increasing expectations for seamless digital experiences.
“There are tremendous opportunities ahead, the cloud is growing exponentially along with the booming digital economy, and they need to provide infrastructure to cater for the cloud. The advantages are undoubtedly driving demand and fueling recent growth of new hyperscale facilities in Indonesia,” said Philbert Shih, the Managing Director of Structure Research.
As internet users in the mass market and enterprises begin to use various infrastructure outsourcing models, hyperscale cloud and data centers are set to take full advantage in growing cities like Jakarta where capacity in 2025 is projected to reach 198.5 MW, with a maximum build out of 236.3 MW.
Hyperscale will also create demand for wholesale colocation to house the supporting infrastructure and drive uptake of interconnection services to integrate and scale with cloud services.
The wholesale data center colocation portion of the market is expected to grow at an annual rate of 43.5% between now and 2025, reaching approximately 131.2 MW of capacity in five years.
DCI Indonesia built a 200MW facility spanning 85,000 square meters in Greater Jakarta last year, the first largest hyperscale campus in Indonesia, to meet future capacity needs.
“As of today, we continue to witness strong market demand from our current customers as well as global business players looking to enter the market,” said Toto Sugiri, the CEO of DCI Indonesia.
To keep up with demand, DCI Indonesia has also completed the final stages of their newest data center, JK5, which has a current capacity of 15 MW, adding an additional 20% from current capacity built out in Indonesia.
This research and trends show Indonesia as a “hotspot” for hyperscale data center investment within the next five years, driven by the rise in cloud adoption. The entry of Google, Alibaba Cloud, and AWS into Indonesia also demonstrates a developing interest in the country as a substitute for Singapore.
As a result, Indonesia is set to be the fastest growing market for data centers in Southeast Asia, with a growth rate of 22% per annum over the next five years.