Indonesia Data Center Construction Market Size
| Study Period | 2021 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2021 - 2022 |
| CAGR | 14.09 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Indonesia Data Center Construction Market Analysis
The Indonesia Data Center Market size is expected to reach USD 4 billion by 2029, at a CAGR of 14.09% during the forecast period (2023-2029). One of the critical sources of growth in the region is its increasing internet economy.
- The Southeast Asian region's internet economy accounts for over USD 100 billion, according to SpaceDC Pte Ltd, 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 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 will also steer 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 Construction Market Trends
Major ICT Indicators Contributing to the Growth of Data Centre in Indonesia
The country's Information and Communications Technology (ICT) spending declined significantly during the pandemic. The country's mobility and cloud technologies offered opportunities for vendors in the market. Enterprises in the country differed in hardware purchases as an initial response to the economic uncertainty, and many enterprises moved to the remote working phase and adopted cloud-based solutions in the country. Over the coming years, ICT spending on the cloud is expected to increase significantly.
Moreover, in August 2020, President Joko 'Jokowi' Widodo announced that his administration would allocate about USD 2.06 billion in the 2021 state budget for ICT development as the government aims to aid digital transformation in public services and improve Indonesia's connectivity inclusion.
Apart from this, the country's mobile and internet penetration is increasing at a significant pace. According to Groupe Speciale Mobile Association (GSMA) 2020 report, the country had 176 million mobile service subscribers in 2017 and is expected to reach 199 million by 2025 with 69% penetration. Such growth in demand is expected to fuel data consumption and internet usage in the country.
The study by GSMA also found that, the number of smartphone connections stood at 73% of total connections in the country, which is expected to reach 77% by 2025. Such exponential growth is further influencing the data consumption rates in the country. Such developments are expected to drive the demand for data centers in the region.
The ongoing increase in the use of smartphones that coincides with the growth in e-commerce transactions, including mobile phones or computer games, is positively impacting the data center growth in the country. For instance, according to JP Morgan, 2020 report, the country's mobile commerce market value stood at USD 13.2 billion and expected to reach USD 22.9 billion in 2023; and mobile commerce is growing at a faster pace in the country. Also, Indonesia is a mobile-first e-commerce market, with 58 percent of transactions completed on a mobile device. This fact suggest that there is wide scope for the data centers market in the country.
Tier 3 is the Most Preferred 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, the Nippon Telegraph and Telephone Corporation (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 Construction Industry Overview
The India Data Center Market is moderately consolidated. The major players in this market hold the majority of the market share. Some significant players are NTT Communications Corporation, PT DCI Indonesia (DCI), Telkomsigma, Equinix Inc., and Indosat Tbk PT.
In May 2023, Pure DC announced the launch of its hyperscale data center with an IT load capacity of 20 MW to support digitalization and cloud computing. In addition, the company also announced to partner with data centers across Asia Pacific Region (APAC), providing opportunities for the vendors in the market.
In April 2023, BDX Indonesia launched a greenfield data center, CGK3A, in South Jakarta. The data center supports an IT load capacity of 15 MW. The data center has tier III facilities with advanced security systems, automation technology, and high network uptime.
Indonesia Data Center Construction Market Leaders
NTT Communications Corporation
PT DCI Indonesia (DCI)
Telkomsigma
Equinix Inc.
Indosat Tbk PT
*Disclaimer: Major Players sorted in no particular order
Indonesia Data Center Construction Market News
- September 2022: The company commenced construction on a 23 MW data center in Jakarta, Indonesia, marking the company's third site in South East Asia as it capitalizes on the region's rapid digital transformation in the wake of the global pandemic. The new facility will offer 3,430 cabinets and an IT load of 23 MW and is designed to cater to the growing demand for high-power density applications from cloud-driven hyperscale deployments, local and international networks, and financial service providers. It is expected to complete by Q4 2023.
- August 2022: PT Sigma Cipta Caraka (SCA), also known as Telkomsigma, transfers its data center business to PT Telkom Data Ekosistem (TDE), which is worth a total of IDR 2.01 trillion. The parent company PT Telkom Indonesia (Persero) Tbk (TLKM) claimed that this transfer of the data center business line is related to the business restructuring program held by Telkom Group.
Table of Contents
1. INTRODUCTION
1.1 Study Assumption & Market Definition
1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. Market Dynamics
4.1 Market Overview
4.2 Market Drivers
4.2.1 Major ICT Indicators Contributing to the Growth of Data Centre in Indonesia
4.2.2 Rise of Green Data Centers
4.2.3 Government Support in the Form of Tax Incentives for Development of Data Centers
4.3 Market Restraints
4.3.1 Higher Initial Investments and Low Availability of Resources
4.4 Value Chain / Supply Chain Analysis
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Assessment of COVID-19 Impact
5. Key Industry Statistics
5.1 Planned/Under Construction IT Load Capacity
5.2 Planned/Under Construction Raised Floor Space
5.3 Planned/Under Construction Submarine Cable
6. MARKET SEGMENTATION
6.1 Tier Type
6.1.1 Tier 1 and 2
6.1.2 Tier 3
6.1.3 Tier 4
6.2 Data Center Size
6.2.1 Small
6.2.2 Medium
6.2.3 Large
6.2.4 Mega
6.2.5 Massive
6.3 Infrastructure
6.3.1 Cooling Infrastructure
6.3.1.1 Air-based Cooling
6.3.1.2 Liquid-based Cooling
6.3.1.3 Evaporative Cooling
6.3.2 Power Infrastructure
6.3.2.1 UPS Systems
6.3.2.2 Generators
6.3.2.3 Power Distribution Unit (PDU)
6.3.3 Racks and Cabinets
6.3.4 Servers
6.3.5 Networking Equipment
6.3.6 Physical Security Infrastructure
6.3.7 Design and Consulting Services
6.3.8 Other Infrastructure
6.4 End-User
6.4.1 IT & Telecommunication
6.4.2 BFSI
6.4.3 Government
6.4.4 Healthcare
6.4.5 Other End User
7. COMPETITIVE LANDSCAPE
8. Company Profiles
8.1 AECOM
8.2 NTT Facillities
8.3 Fortis Construction
8.4 IBM Corporation
8.5 SAS Institute Inc.
8.6 Schneider Electric SE
8.7 Turner Construction Co.
8.8 Laurson & Toubro
8.9 Delta Power Solutions
8.10 Legrand
8.11 Iris Global
8.12 Brookfield Infrastructure
- *List Not Exhaustive
9. INVESTMENT ANALYSIS
10. MARKET OPPORTUNITIES AND FUTURE TRENDS
Indonesia Data Center Construction Industry Segmentation
Data center construction combines physical processes used to construct a data center facility. It chains construction standards with data center operational environment requirements.
Indonesia Data Center Construction Market is segmented by Tier Type (Tier 1 and 2, Tier 3, and Tier 4), by Data Center Size (Small, Medium, Large, Massive, and Mega), by Infrastructure (Cooling Infrastructure (Air-based Cooling, Liquid-based Cooling, Evaporative Cooling), Power Infrastructure (UPS Systems, Generators, Power Distribution Unit (PDU), Racks and Cabinets, Servers, Networking Equipment, Physical Security Infrastructure, Design and Consulting Services, and Other Infrastructure), and End User ( IT & Telecommunication, BFSI, Government, Healthcare, and Other End User). The market sizes and forecasts are provided in values of USD for all the above segments.
| Tier Type | |
| Tier 1 and 2 | |
| Tier 3 | |
| Tier 4 |
| Data Center Size | |
| Small | |
| Medium | |
| Large | |
| Mega | |
| Massive |
| Infrastructure | |||||
| |||||
| |||||
| Racks and Cabinets | |||||
| Servers | |||||
| Networking Equipment | |||||
| Physical Security Infrastructure | |||||
| Design and Consulting Services | |||||
| Other Infrastructure |
| End-User | |
| IT & Telecommunication | |
| BFSI | |
| Government | |
| Healthcare | |
| Other End User |
Frequently Asked Questions
What is the current Indonesia Data Center Construction Market size?
The Indonesia Data Center Construction Market is projected to register a CAGR of 14.09% during the forecast period (2024-2029)
Who are the key players in Indonesia Data Center Construction Market?
NTT Communications Corporation, PT DCI Indonesia (DCI), Telkomsigma, Equinix Inc. and Indosat Tbk PT are the major companies operating in the Indonesia Data Center Construction Market.
What years does this Indonesia Data Center Construction Market cover?
The report covers the Indonesia Data Center Construction Market historical market size for years: 2021, 2022 and 2023. The report also forecasts the Indonesia Data Center Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Indonesia Data Center Construction Industry Report
Statistics for the 2024 Indonesia Data Center Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Indonesia Data Center Construction analysis includes a market forecast outlook to for 2024 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
