Many new data center investments in Indonesia indicate the growing importance of this country as a hub for business and IT solutions.
This country has a population of 260 million and abundant gas energy sources. While reducing carbon emissions is essential, many other countries are experiencing shortages of energy supplies such as gas.
Data Center Investments Trend in Indonesia
Data center investments in Indonesia are forecast to reach USD 4.2 billion in 2023, driven by the increasing demand for data center services and the growing availability of space in the market.
Indonesia is one of the fastest-growing economies in the ASEAN region. As per the World Bank report, Indonesia’s GDP growth rate is expected to remain above 5% through 2020. The country’s e-commerce industry is also multiplying and is expected to record a CAGR of 20.2% during 2016-2022.
The rise in data center services demand has led to an increase in business continuity solutions such as disaster recovery sites or cloud services providers. This has resulted in a significant increase in data center investments across Indonesia over the past few years.
Data centers provide critical infrastructure support for customers like telecom operators, banks, retailers, etc., which has allowed them to manage their workload smoothly without any downtime or disruption to their operations.
These trends have created new opportunities for investors looking to capitalize on this growing market by building new data centers or acquiring existing ones from other companies before they become oversubscribed.
Jakarta, the capital of Indonesia, is a hot destination for companies to build a data center
The country has one of the fastest-growing economies in the world and has become a significant hub for outsourcing services, such as call centers and tech support. Many foreign companies have established operations in Jakarta to take advantage of the workforce there.
Jakarta has become a hub for technology companies and startups in the region because of its proximity to Singapore and Malaysia and favorable business environment.
Jakarta’s infrastructure is also improving quickly. The city currently boasts some of the fastest internet connections in Southeast Asia, according to a study by Ookla Speedtest Intelligence.
Currently, on average, data centers already operating in Jakarta experience full occupancy. For example, Atria DC recently acquired Space DC in West Jakarta. It hasn’t been in operation for two years and is complete. Now they are expanding their data center to other areas in Jakarta.
Examples of this success also occur in other data centers in Jakarta and remote areas such as Bekasi, Bogor and Tangerang. Fiber optic cable infrastructure is also very easy for you to get. You can set up a neutral data center network in Jakarta and the surrounding area.
You must know the location of an exemplary data center in Jakarta. This is an essential factor before your investment evaporates into the cloud.
Here are four reasons why you should consider building a data center in Jakarta:
- The cost of electricity is low compared to other countries in the Asia Pacific region. We have analyzed this; Indonesia has a 30% lower electricity price than other countries in South East Asia and North America, and a lower 70% lower than Europe.
- The country has a great talent pool with plenty of engineers and IT professionals who can help your company design and build its new facility.
- You’ll be able to find experienced contractors who can help manage the construction process from start to finish, which means you won’t have to go through the hassle of doing it all yourself.
- There are plenty of good locations where you can build your new facility, so finding an appropriate space should be easy!
The land price in Jakarta is relatively high. You must spare hundreds of millions of investments to build a 10 MW data center in Jakarta. In Singapore, there is no land to build new data center facilities. Singapore data center investors are already making their data center compound in Riau Island, west side of Indonesia.
Indonesia is becoming more attractive as a future capital investment area
The country has many factors that make it an attractive market for investors, including its economic growth, the availability of natural resources, and its strategic location in the region.
The country’s infrastructure sector is also proliferating. The government has been trying to improve the country’s infrastructure by improving connectivity and developing a single-window application system for investors.
Indonesia’s IT sector is overgrowing, and there are many opportunities for foreign investors. Indonesia has a large pool of talented IT professionals who can work with foreign investors to help them develop their business models.
The government has also set aside funds for new data centers in Indonesia to support its growing e-commerce industry. There are plans to build ten new data centers by 2023 – the majority in Jakarta and one each in Bali and Batam.
One of our trusted sources provides information that Digital Realty – a leading data center and cloud provider holding, will disburse hundreds of millions of dollars in investment to start partnering with the GreenexDC data center.
Conclusion
Data center infrastructure investment in Indonesia is growing at a fast rate. Due to its booming economy and population growth, the country has become one of the most attractive markets for data center providers.
According to a recent report from Colliers International, data center investments in Indonesia have grown by 60 percent over the past year.
Seeing the success of Equinix’s investment in Indonesia through their local partner DCI, Digital Realty should quickly invest in the data center industry in Indonesia, precisely in Jakarta. You can see the movement of DCI shares which have soared since the initial public offering.
The Indonesian data center market is for more than just local needs. The Indonesian data center can be an alternative solution for data centers in Europe struggling with energy scarcity which causes high electricity prices.
Therefore, immediately building a data center in Indonesia, as long as there is market momentum and government support, is also very good.
Keep following this blog to get exciting updates regarding data center investments and green data centers in Indonesia.