Tech group plans to build more data centers on back of Jakarta region launch
JAKARTA -- Amazon Web Services, the cloud arm of major U.S. e-commerce group Amazon, said it plans to invest $5 billion in Indonesia over the next 15 years as it launched its first cloud infrastructure region for the country.
The AWS Asia Pacific (Jakarta) Region, announced Tuesday, is the cloud group's second such so-called active region in Southeast Asia after Singapore, its 10th in the Asia Pacific and 26th globally.
That means AWS' Indonesian customers -- including local tech unicorns, startups, enterprises and government institutions -- can now "run their applications and serve end users," as well as "drive innovation" by "leveraging AWS advanced technologies from data centers located in Indonesia," the company said in a news release.
AWS added it is planning to invest an estimated $5 billion in Southeast Asia's largest economy through the new Jakarta region -- including for the construction of more data centers.
Indonesia boasts the world's fourth-largest population and has a booming digital economy spurred by a bevy of tech unicorns -- startups valued at more than $1 billion -- as well as surging demand for digital services during the coronavirus pandemic and related lockdowns. It is quickly becoming one of the hottest battlegrounds for data centers and cloud services in Asia -- a phenomenon partially driven by the government's local data storage requirements.
International property consultant Jones Lang LaSalle in a July report said Indonesia was the second-highest earner in Southeast Asia's cloud business with $600 million in total cloud-based revenue last year, trailing Singapore's $1.8 billion. Indonesia's revenue is expected to more than triple by 2025.
"Demand for data centers in Indonesia is driven by local and international businesses' growing adoption of cloud based services, and is underpinned by technological advances," JLL said. "Some corporations are heading towards remote working, which is also driving the demand for cloud computing."
Citing its own economic impact study, AWS said that the new region's operations and spending plans will directly and indirectly create 24,700 local jobs in the country including for construction, facility maintenance, engineering and telecommunications as part of its supply chain. AWS said it will add more than $10.9 billion to Indonesia's gross domestic product over the next 15 years.
The region will "help Indonesian institutions, innovative startups, and world-leading companies deliver cloud-powered applications to fuel economic development across the country," Prasad Kalyanaraman, AWS vice-president for infrastructure services, said in the release.
AWS, the global market leader in cloud computing services, lists among its clients in Indonesia Halodoc, a health tech startup which saw traffic soar significantly during the pandemic, and Indonesian media and property conglomerate MNC Group, which made a foray into digital banking this year. Other local clients include e-commerce group Tokopedia, travel site unicorn Traveloka, delivery company SiCepat and state-owned post office Pos Indonesia.
AWS, however, is not the only provider in Indonesia. Alibaba Cloud, the cloud arm of Chinese internet group Alibaba and an early entrant to Indonesia, launched its third data center in the country in June after starting its first two in 2018 and 2019, respectively.
Tencent Holdings, another Chinese internet conglomerate, launched its first local data center in April and has announced plans to establish a second one in the near future.
U.S. tech group Microsoft, meanwhile, in February reiterated its plan to establish a data center in the country, while Google Cloud last year launched its Jakarta region to localize its cloud services for Indonesian clients by partnering with local data center operators after previously using overseas centers.
The booming cloud business also has attracted local players including Data Center Indonesia and the country's largest telecommunications company, state-owned Telekomunikasi Indonesia. Foreign players such as Japan's Nippon Telegraph & Telephone, Singapore's Keppel DC and Princeton Digital Group have also jumped in.