Indonesia Data Center Market By Solution (IT Infrastructure, General Infrastructure, Electrical Infrastructure, Mechanical Infrastructure and Others), By Type (Corporate and Web Hosting), By End-User (Information Technology & Telecom, Government, BFSI, Healthcare and Others), By Region, Competition Forecast & Opportunities, 2028F

Indonesia Data Center Market is anticipated to grow at a high CAGR in the forecast period 2024-2028. The is due to growing data consumption, which has spurred the need to store and process data efficiently. Moreover, rising government investment to provide physical data center space for the enterprises and government organizations is also contributing to market growth. 5G infrastructure investments for faster internet connectivity have proliferated and the adoption of several advanced technologies have further boosted the demand for data centers. The increasing availability of skilled workforce and operational and development cost advantage across various end-use industries have led to an increased focus on data centers to overcome the situation of high data consumption. Companies are highly dependent on computer systems due to the increasing number of internet users and digital services that drive business operations. The benefit of geographical location, demand for electric vehicles and green energy solutions in the country are attracting many investments in Indonesia to setup the manufacturing plants. In addition, the need for secure facilities with resilient infrastructure such as reliable and redundant power supply, cooling and connectivity are further increasing the demand for more data centers in the country. Many enterprises are collaborating and adopting data centers as a cost-effective solution. Moreover, the market is anticipated to be driven by rising demand for digital age networking, which enables businesses to progress towards digital transformation and produce new business outcomes by utilizing new digital age technologies like the internet of things (IoT), cloud computing, and artificial intelligence (AI) and thus relying on different software. Additionally, the growing demand for data and high bandwidth capacity, especially due to increasing number of smartphone users promotes the development of the data center market of Indonesia throughout the forecast period.

A data center is a physical location with networked computers, storage systems, and computational infrastructure that businesses utilize to store, gather, analyze, and disseminate massive quantities of data. It offers reliable storage without the glitches of portable technology, eliminating a portion of losses, reduce costs, manage data, and protect upcoming technology investments. Data centers are a crucial component of every organization, since they are created to support corporate applications and offer services like productivity applications, high-volume e-commerce transactions, data storage, management, backup, and recovery. Edge data centers can assist reduce latency for real-time, data-intensive workloads including big data analytics, artificial intelligence (AI), and content delivery apps, enhancing overall application performance and user experience. For enterprises that lack the space, personnel, or experience to deploy and operate all or part of their IT infrastructure on-site, managed data centers and colocation facilities are choices. Indonesia’s data center industry is expanding rapidly in the age of digitization. With a predicted expansion driven by technologies like artificial intelligence, machine learning, and analytics, the nation is ideally positioned to become a worldwide hub for data centers focusing on cloud computing.

The Increasing Number of Internet Users and Digital Services Proliferating Growth

The expansion in the quantity of internet and digital services has happened around the world, and Indonesia is no exception. The significant increasing number of internet users and the advancement of online technologies have driven many companies to offer their products through the internet. Indonesia is heavily reliant on data centers due to its high internet penetration. This has brought large-scale processing and digital application development which requires large data centers and cloud technologies. For instance, according to the Indonesian Internet Providers Association’s (APJII) annual survey, there are 210 million internet users in 2022 out of 272 million total population in Indonesia, accounting for a penetration rate of 77.02 percent as of the first quarter of 2022. Moreover, the country’s 79% of respondents use the internet for online transactions, while 72% accessed financial services. The growth in internet users and digital applications for various services are proliferating the digital transformation, smart phone adoption in the country. Therefore, enterprises are relying more on establishing data centers as this increasing digital advancement creates huge amounts of data, which is required to be stored and processed. Thus, the increasing number of internet users and digital services has proliferated the demand for data centers in the Indonesia market.

Rapid Adoption of Cloud and Digital Transformation by Companies

Indonesia’s digital journey is growing at a remarkable pace since the adoption of cloud services in the country. Due to the rapid pace of technological advancement, Indonesia is trying harnessing digital technologies to reap significant economic benefits in the long run. Several cloud service providers from across the world have revealed their availability zones and the data scrubbing center in Indonesia, particularly in locations like Jakarta and multiple regions since they have strong fiber connection in addition to being close to clients. Availability zones (AZs) are being built by BDx Indonesia, Amazon Web Services (AWS), Huawei Cloud and many more to support high availability (HA), while maintaining low latency. Google Cloud has announced its plan to open its first cloud region in Indonesia, aiming to accelerate the country's next stage of digital economic development and to overcome the traditional barriers for cloud adoption in Indonesia. While most of the large enterprises have already accelerated cloud adoption, medium-sized companies and small companies have also embarked on their cloud journey. Moreover, several investments by the enterprises in cloud and digital journey are aiding in developing the cloud infrastructure in Indonesia. For instance, recently Amazon Web Services (AWS), the cloud arm of major U.S e-commerce group announced the investment of USD5 billion in Indonesia over the next 15 years to accelerate cloud adoption and digital transformation including the construction of more data centers. Moreover, the development of 5G infrastructure, AI, robots, and the explosion in data-intensive industries like edge computing and the Internet of Things (IoT) have all enjoyed full support of the Indonesian government. All these industries produce massive volumes of data, the majority of which must go through some sort of data center. Furthermore, many enterprises are heading towards remote working, which is also driving the demand for cloud computing as cloud-managed services are a vital part of digital transformation, and their demand will further expand in the recent years. The government's efforts to transform Indonesia into a global data hub have resulted in several regulations and reforms that have given the essential framework for this expansion, and many new firms are likely to enter the market in the upcoming years. Therefore, the rapid adoption of cloud and digital transformation by companies is attributing to the growth of Indonesia data center market.

Growth in Renewable Energy & Infrastructure

Data centers are one of the major infrastructures which require huge amount of energy consumptions. Many enterprises may feel challenges before establishing data centers due to their high energy consumption. Although Indonesia is the world's fourth-largest producer of coal and the world's top exporter of the fuel, the government has been supporting renewable energy to lessen its reliance on fossil fuels and overcome the demand for energy requirement. In Indonesia, there is a growing need for and potential for renewable energy. Moreover, as Indonesia accounts for 40% of the ASEAN's region's energy consumption, the country's demand for energy is predicted to increase by 80% by 2030. Moreover, Indonesia has a lot of potential for renewable energy sources including geothermal, solar, wind, hydropower facilities, biomass, and more. By 2025, the Indonesian government intends to use renewable energy sources to meet 23% of its domestic energy needs. This goal was set to minimize greenhouse gas (GHG) emissions and reach carbon neutrality by the year 2060. The National Grand Energy Strategy (GSEN), the PLN Electricity Development Plan, and other government initiatives have helped to build new on-grid NRE capacity. These initiatives, combined with an increase in the setup facilities and installations of renewable energy infrastructure, have also allowed the service providers to establish data centers for growing digital economy. Hence, the growth in renewable energy & infrastructure is offering robust opportunities for the Indonesia data center market.

Market Segmentation

Indonesia Data Center Market is divided into solution, type, end- user. Based on Solution, the market is divided into IT Infrastructure, General Infrastructure, Electrical Infrastructure, Mechanical Infrastructure and Others. Based on Type, the market is segmented into Corporate and Web Hosting. Based on End- User, the market is divided into Information Technology & Telecom, Government, BFSI, Healthcare and Others.

Company Profiles

NTT Communications Corporation, PT Omadata Padma Indonesia, GTN Data Center, PT. Sigma Cipta Caraka (Telkomsigma), PT DCI Indonesia, Space DC Pte Ltd, IDC Indonesia, Equinix Inc., Princeton Digital Group, PT CBN Nusantara (NEX Datacenter) are among the major players that are driving the growth of the Indonesia data center market.

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Report Scope:

In this report, the Indonesia Data Center Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Indonesia Data Center Market, By Solution:
• IT Infrastructure
• General Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• Others
• Indonesia Data Center Market, By Type:
• Corporate
• Web Hosting
• Indonesia Data Center Market, By End User:
• Information Technology & Telecom
• Government
• BFSI
• Healthcare
• Others
• Indonesia Data Center Market, By Region:
• Java
• Sumatra
• Kalimantan
• Bali
• Rest of Indonesia

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Indonesia Data Center market.

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With the given market data, TechSci Research offers customizations according to a company’s specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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