Indonesia Data Center Support Infrastructure Market

Indonesia Data Center Support Infrastructure Market Overview

• The Indonesia Data Center Support Infrastructure Market is valued at USD 2.5 billion, based on a five-year historical analysis of the broader data center investment market and related power and facilities infrastructure in the country. This growth is primarily driven by the increasing demand for cloud services, accelerated digital transformation initiatives across banking, telecom, manufacturing, and public services, and the rapid rise of e-commerce and digital platforms, which have necessitated robust data management, storage, and power/cooling solutions across various sectors.
• Key cities dominating this market include Jakarta, Surabaya, and Batam. Jakarta serves as the economic and technological hub, attracting the majority of hyperscale, colocation, and cloud data center investments due to its large user base and connectivity. Surabaya is emerging as a secondary hub due to its strategic location in eastern Indonesia and growing tech ecosystem, while Batam benefits from its proximity to Singapore and international submarine cable systems, facilitating cross-border data services and disaster-recovery deployments.
• In 2023, the Indonesian government strengthened its national data center agenda through initiatives aligned with the development of a government-owned National Data Center (Pusat Data Nasional) and the implementation of Law No. 27 of 2022 on Personal Data Protection issued by the Government of Indonesia, which requires certain categories of data to be stored and processed within Indonesia and drives investments in secure, compliant facilities. These initiatives are supported by multi-hundred-million-USD commitments from both the public sector and global cloud providers to expand infrastructure and promote the adoption of energy-efficient and green data center technologies, ensuring sustainable growth in the data center sector.

Indonesia Data Center Support Infrastructure Market Segmentation

By Infrastructure Type:The infrastructure type segment includes various components essential for the reliable and efficient operation of data centers. Key subsegments include Power Distribution Units (PDUs), Uninterruptible Power Supply (UPS) Systems, Generators and Switchgear, Cooling and Thermal Management Systems, Racks, Cabinets, and Containment, Rack Power and Cable Management, Fire Detection and Suppression Systems, Physical Security and Monitoring Systems, DCIM and Environmental Monitoring, and Others. The demand for Cooling and Thermal Management Systems is particularly high due to the increasing density of IT loads, the expansion of hyperscale and colocation facilities, and the need to improve Power Usage Effectiveness (PUE) through advanced liquid and air-based cooling solutions.

By Data Center Type:This segment categorizes data centers based on their operational models. The subsegments include Colocation Data Centers, Hyperscale and Cloud Data Centers, Enterprise / On-Premise Data Centers, Edge and Modular Data Centers, and Government and Public Sector Data Centers. Colocation Data Centers are currently leading the market due to the increasing trend of businesses outsourcing their data storage and compute needs, the growth of wholesale colocation for cloud and content providers, and a preference for scalable, carrier-neutral facilities that meet data localization and security requirements.

Indonesia Data Center Support Infrastructure Market Competitive Landscape

The Indonesia Data Center Support Infrastructure Market is characterized by a dynamic mix of regional and international players. Leading participants such as NTT Global Data Centers Indonesia (PT NTT Indonesia Nexcenter), PT Telekomunikasi Indonesia (Telkom Indonesia) / Telkomsigma, PT DCI Indonesia Tbk (DCI Indonesia), PT Indosat Tbk (Indosat Ooredoo Hutchison), PT XL Axiata Tbk (XL Axiata Data Center), PT Aplikanusa Lintasarta (Lintasarta Cloudeka Data Center), PT Biznet Gio Nusantara (Biznet Data Center & Biznet Gio), PT Cyberindo Aditama (CBN Data Center / CBN Cloud), Equinix Inc. (including former PT GTN Data Center), Princeton Digital Group (PDG) Indonesia, EdgeConneX Indonesia, Keppel Data Centres Indonesia, ST Telemedia Global Data Centres (STT GDC Indonesia), Amazon Web Services (AWS) Jakarta Region, Google Cloud Region Jakarta contribute to innovation, geographic expansion, and service delivery in this space.

Indonesia Data Center Support Infrastructure Market Industry Analysis

Growth Drivers

• Increasing Demand for Cloud Services:The Indonesian cloud services market is projected to reach $1.7 billion in future, driven by a 30% annual growth rate in cloud adoption. This surge is fueled by businesses transitioning to cloud-based solutions for enhanced efficiency and scalability. The increasing reliance on remote work and digital collaboration tools has further accelerated this trend, with over 70% of enterprises planning to increase their cloud investments in the coming year, according to the Ministry of Communication and Information Technology.
• Expansion of Digital Economy:Indonesia's digital economy is expected to grow to $146 billion in future, with a significant contribution from e-commerce, which alone is projected to reach $63 billion. This rapid digital transformation is creating a robust demand for data centers to support online transactions and digital services. The government’s push for a digital-first economy, including initiatives to improve internet connectivity, is further propelling the need for advanced data center infrastructure across the nation.
• Government Initiatives for Data Localization:The Indonesian government has implemented regulations mandating data localization, requiring companies to store data within national borders. This policy aims to enhance data security and privacy, leading to an increased demand for local data centers. As of future, over 60% of businesses are expected to comply with these regulations, driving investments in data center infrastructure to meet local storage requirements and ensure compliance with national laws.

Market Challenges

• High Energy Costs:Indonesia faces significant challenges with high energy costs, which can account for up to 30% of operational expenses for data centers. The average electricity price in Indonesia is approximately $0.12 per kWh, which is higher than in neighboring countries. This situation poses a challenge for data center operators, as they must balance energy efficiency with operational costs while striving to maintain competitive pricing in the market.
• Limited Infrastructure in Rural Areas:The lack of adequate infrastructure in rural regions hampers the expansion of data centers outside urban centers. Approximately 40% of Indonesia's population resides in rural areas, where internet penetration is only 35%. This disparity limits the reach of digital services and creates challenges for data center operators looking to expand their footprint. Investments in infrastructure development are crucial to bridging this gap and enabling broader access to data services.

Indonesia Data Center Support Infrastructure Market Future Outlook

The future of Indonesia's data center support infrastructure market appears promising, driven by technological advancements and increasing digitalization. The adoption of AI and machine learning technologies is expected to enhance operational efficiencies, while the shift towards edge computing will facilitate faster data processing. Additionally, the growing emphasis on sustainability will lead to innovations in energy-efficient data center designs, aligning with global environmental standards. These trends indicate a robust growth trajectory for the market, fostering a competitive landscape that attracts both local and international investments.

Market Opportunities

• Investment in Renewable Energy Sources:The Indonesian government aims to increase the share of renewable energy to 23% in future. This shift presents a significant opportunity for data centers to invest in solar and wind energy solutions, reducing operational costs and enhancing sustainability. By leveraging renewable energy, data centers can improve their environmental footprint while benefiting from potential government incentives for green energy initiatives.
• Development of Smart City Projects:Indonesia's commitment to developing smart cities, with over 100 projects planned in future, creates a substantial opportunity for data center operators. These projects will require robust data infrastructure to support IoT applications and smart services. Collaborations with local governments and tech firms can facilitate the establishment of data centers that cater to the needs of these smart city initiatives, driving innovation and economic growth.