Indonesia Data Center Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Indonesia Data Center Market size is expected to grow from USD 2.06 billion in 2023 to USD 3.98 billion by 2028, at a CAGR of 14.09% during the forecast period (2023-2028).

One of the critical sources of growth in the region is its increasing internet economy.

Key Highlights

• The Southeast Asian region's internet economy accounts for over USD 100 billion, according to SpaceDC's upper management, and it is predicted to expand to USD 300 billion by 2025. As a result, the demand for data services and infrastructure is expected to grow rapidly throughout the forecast period.
• Indonesia ranks lower in the competitive index than other Southeast Asian countries. However, the potential commercial upside for data center players is significant. Indonesia is witnessing a growing digital economy, coupled with the rapid growth of start-up companies and an ever-growing population, leading to a boost in hyper-scale data centers.
• The COVID-19 pandemic posed additional stress on the overall economy across sectors and highlighted the contribution and potential of the online workplace being facilitated by data centers. Due to the digital economy's growth, the data center boom in the market led several global vendors to expand in Indonesia and tap into the emerging opportunities in the studied market. For instance, in November 2021, Smartfren announced a partnership with the UAE technology firm G42 to build a 1,000 MW data center in Indonesia. The investment is expected to strengthen the development of the digital industry in Indonesia and maintain national data sovereignty, being carried out by the government of Indonesia. It also steers multiple international vendors to focus on the digital economy.
• According to the report titled "Digital 2021" by content management service, HootSuite, and social media marketing agency, We Are Social, the number of internet users in Indonesia increased by 27 million (+16%) between 2020 and 2021. Internet penetration in Indonesia stood at 73.7% in January 2021.
• Indonesia's current e-commerce market is similar to China's online marketplace, with a large pool of entrepreneurial sellers providing goods based mainly on social media recommendations. The country is also Asia's foremost mobile-first nation, with one of the highest mobile-Facebook usage rates, aggressively promoting the growth of data centers.

Indonesia Data Center Market Trends

Tier 3 is the largest Tier Type

• The tier 3 segment had a market share of over 50% in the Indonesian data center market in 2022. It is further projected to register a CAGR of 15% to reach an IT load capacity of 652.6 MW by 2029. On the other hand, the tier 4 segment is expected to witness the highest growth of 25.9% by 2029. Implementation of standards in the data center facilities ensures minimal downtown while increasing the efficiency of facilities. Therefore, data centers with additional redundant equipment in place for backup are preferred by customers.
• Tier 1 & 2 facilities are losing their demand as they are incompetent in fulfilling the growing uninterrupted services of businesses. The growing number of global conglomerates has given rise to business continuity services 24*7, which has gradually shifted the preference toward tier 3 and 4 data centers.
• As of 2022, there were nearly 25 tier 3 data center facilities in the country, followed by eight tier 4 data centers. PT DCI Indonesia Tbk's JK1 facility was the first data center in the country to receive the Tier 4 certification in 2013. Since then, NTT and Digital Edge (Singapore) Pte Ltd have had to build tier 4 data centers in the country. The growing demand from customers is expected to drive the construction of tier 3 and 4 data centers in the country in the coming years.

Indonesia Data Center Industry Overview

The Indonesia Data Center Market is fairly consolidated, with the top five companies occupying 67.92%. The major players in this market are BDx Data Center Pte. Ltd., Princeton Digital Group, PT DCI Indonesia Tbk, PT Sigma Tata Sadaya and Space DC Pte Ltd. (sorted alphabetically).

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• The market estimate (ME) sheet in Excel format
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