Second Microsoft data hub to be established in Indonesia

Indonesia might be an alternative for cloud and data centres, given its better availability of land at cheaper prices 

On 28 February, Microsoft announced that they will establish the company’s first data centre region in Indonesia, possibly joining its counterparts, Amazon Web Services (AWS) and Google Cloud, in the growingly competitive market of Southeast Asia, reported Channel Asia.

According to Joko Widodo, president of Indonesia, plans are already in place as the country has placed “simple regulation” to facilitate the setup.  

“Microsoft wants to invest immediately in Indonesia,” said Widodo during the DevCon – Digital Economy Summit 2020. “So within a week, we will decide a new, simple regulation to support the investment.” 

The Microsoft event hosted over 2,500 developers, entrepreneurs, and start-ups, presenting the company’s strategy for cloud success in Southeast Asia.  

Over the past two decades, ResearchAndMarkets’ report stated that “the Indonesian data centre market has experienced significant growth.” 

“In particular, growth has been very strong over the past few years, as Indonesia seeks to bridge the gap with its more advanced neighbours such as Singapore and Malaysia,” the report said.

“However, lack of government incentives and programs to support the growth of data centres in the country has seen the adoption of data centre services at a slower organic pace compared to some neighbouring countries.”

Nevertheless, research findings indicate that the market is beginning to obtain strong momentum. The report adds that Indonesia is drawing in investments from cloud giants like Google, Amazon, and Alibaba, indicating the nation’s fascination as an alternative to Singapore for cloud and data centre services.  

More: Horizons Ventures funds Indonesian online investment platform, Ajaib Group

“Large international data centre specialists and international content and cloud providers have yet to enter Indonesia to the same extent seen in more advanced markets such as Singapore and Hong Kong, however, their interest in the Indonesian market is now increasing. “

“Compared to more mature neighbouring markets such as Singapore, Hong Kong, and Japan where land for new builds is scarce and expensive to acquire, in comparison Indonesia has better availability of land at cheaper prices. The availability of affordable land means that companies establishing a base in Indonesia could find it easier to build their own facilities,” said the report.