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INDONESIA

Looking to Southeast Asia? Here’s why Indonesia
should be your next colocation destination

Landscape view from the top of Padar island in Komodo islands, Flores, Indonesia.

A land of natural splendor
and boundless opportunities

Indonesia is the largest archipelago in the white sand, the tranquillity and luscious
world, consisting of the main islands of greenery around pristine lakes, or
Sumatra, Java, Kalimantan, Sulawesi, and breath-taking volcanic peaks, Indonesia
Papua stringed along the equator. With is a melting pot of nature and culture
hundreds of national parks and as many with more than 300 ethnic groups.
as 17,504 islands, Indonesia is a place of
spectacular natural wealth. Join us on a journey to explore both the
sights, and economic opportunities in
From islands to explore rare species of the fourth most populous country
corals, wind-swept beaches of undulating the world.

Aerial view of Uluwatu Temple, Bali, Indonesia
Aerial view to waves in ocean, Bali, Indonesia

Pekanbaru

Pekanbaru is the capital city of the Riau PK1
province, where its location along the Pekanbaru
banks of the Siak River allows it to serve
as a trading port that links the city to the
Straits of Malacca. From the
pastel-coloured sand dunes at Rainbow
Hills to the ancient Muara Takus Temple
– a UNESCO World Heritage site,
Pekanbaru is a hidden gem for those
who prefer less-travelled places.

Acknowledged as one of the cleanest big

cities in Indonesia, Pekanbaru is a major

economic centre on the eastern part of

Sumatra Island and part of the Sumatra

Economic Corridor1, which is envisioned

as a centre for the production and

processing of the country’s natural Bintaro JB1 JC1 Cibitung

resources and energy reserves. With the Jakarta BD1

government making additional Bandung

investments in infrastructure as part of a

Master Plan, this makes Pekanbaru a

noteworthy location to consider.

Rice terraces in the morning sunrise in North Bengkulu

Jakarta

Jakarta, Indonesia's capital needs no
introduction. Greater Jakarta is a
megacity with a population of over 30
million and sits on the northwest coast of
the island of Java, at the mouth of the
Ciliwung River on Jakarta Bay. Touted by
some as a city that never sleeps, Jakarta
boasts a vibrant nightlife and modern
malls, alongside a smorgasbord of
disparate cultures and diverse heritage
landmarks from the nation’s rich history.

Aside from being the national capital
and administrative centre for the
national economy, Jakarta is also a
significant industrial hub. It is the centre
of roughly one-fourth of Indonesia’s
trade and services and two-thirds of its
banking and financial sectors2. As you
might expect, Jakarta is typically the
place where businesses entering the
Indonesia market first establish their
presence.

1https://www.aseanbriefing.com/userfiles/resources-pdfs/Indonesia/FDI/ASEAN_Indonesia_Master%20
Plan%20Acceleration%20and%20Expansion%20of%20Indonesia%20Economic%20Development%202011-2025.pdf
2https://www.britannica.com/place/Jakarta
3https://www.asiagreen.com/en/news-insights/indonesia-s-second-tier-cities-on-the-move

Suramadu bridge located in East Java

SB1
Surabaya

Bandung Surabaya

The third largest city in Indonesia, Bandung As one of the earliest port cities in Southeast
is 2.5 hours’ drive southeast of Jakarta where Asia, Surabaya is located close to key trading
it is surrounded by mountainous scenery routes, where ample overland transportation
with rice fields and waterfalls with an offers easy accessibility from the coast to the
average elevation of 768 meters above sea interior of Java. The importance of the
level. Blessed with a mild and pleasant vibrant, sprawling metropolis in the nation’s
climate, it is home to numerous examples of history and natural charms make it more
Dutch colonial architecture and spectacular than just a business destination. Among
natural sights that will mesmerise you with others, it is home to stunning landmarks
their breath-taking beauty. including magnificent landscapes of
limestone cliffs surrounded by bright, lush
The undulating tea and coffee plantations greenery.
bely the technological advancements and
economic progress of the city. Indeed, As the capital of East Java Province, Surabaya
Bandung is one of the most important has a diverse economy that forms a basis for
economic hubs in West Java Province, its rising prosperity3. With a population of
contributing an above-average percentage close to three million people, it is also
of the country’s GDP. It is also home to Indonesia's second largest city. And as an
Indonesia’s largest technology university and established metropolitan city, it is linked by
more than 80 higher education institutions strong data networks as part of the nation’s
for ample human resource that the digital artery.
government wants to galvanize to transform
it into Indonesia’s technology capital.

Why Indonesia should
be your next colocation
destination

Despite being renowned for its idyllic sights and rich cultural experiences, not every-
one may be aware that Indonesia is currently the world’s tenth largest economy in
purchasing power parity. It continues to grow rapidly, too, which makes the country a
noteworthy location for businesses and investors alike.

Crucially, Indonesia is also the pacesetter in Southeast Asia for terms of its internet
economy, the bellwether of our digital-centric future. According to the Google,
Temasek, Bain & Company e-Conomy SEA 2019 Report4, Indonesia is at the forefront in
Southeast Asia with annual growth rates of more than 40 percent.

So why should Indonesia be your next colocation destination? Here are five reasons.



Reason #1: Massive and
growing economy

Indonesia is widely viewed as a futu re economic giant. The
Indonesian economy is the largest in Southeast Asia, and the
country has charted impressive and consistent economic
growth over the last two decades. According to the World Bank,
Indonesia had made enormous gains in tackling poverty,
lowering the poverty rate by more than half since 19995 and
qualifying the country to reach the upper middle-income status.

A member of the G20, Indonesia had also maintained a focus on
growing its economy that is forecasted by the Economist
Intelligence Unit to be the fourth-largest economy in the world
by 20506. In a nutshell, Indonesia is well positioned to pursue a
further transformation towards an even more prosperous and
inclusive society7.

Reason #2:
Mobile-savvy users

Given its large population, it should be no surprise that Indonesia is
the fourth-largest smartphone market worldwide after China, India,
and the United States. There are also an estimated 150 million
Internet users in the country, with as many as 142 million mobile
users8. Crucially, 4G availability in Indonesia is as high as 96.4 per
cent9, allowing Indonesia to leverage high speed mobile
connectivity at work and play.

These mobile users turn to their smartphones to research brands
and products, make e-commerce purchases, hail a ride, pay, or to
consume media content. Ultimately, a wave of inexorable change is
being driven by the mobile economy.

Reason #3: Young
population

Indonesia is the world’s largest island country that is home to over
265 million people, making it the fourth largest nation in the world.
The sheer size of the population aside, it is worth noting that
Indonesia is a young country. With a median age of 29, the
majority (60 per cent) of the population is 40 years old or under.

4https://www.thinkwithgoogle.com/intl/en-apac/consumer-insights/consumer-trends/e-conomy-sea-2019-swipe-up-and-to-the-right-southeast-asias-100-billion-internet-economy/
https://www.worldbank.org/en/country/indonesia/overview
https://asia.nikkei.com/Economy/Indonesia-set-to-become-fourth-largest-economy
https://www.elibrary.imf.org/doc/IMF071/24870-9781484337141/24870-9781484337141/Other_formats/Source_PDF/24870-9781484355954.pdf
https://www.forbes.com/sites/eladnatanson/2019/05/14/indonesia-the-new-tiger-of-southeast-asia/#171f6d8d76ce
https://www.opensignal.com/reports/2019/12/indonesia/mobile-network-experience

It should be no surprise that the average Indonesian are young,
mobile savvy digital natives who are completely at ease with an
evolving, digital-centric world. Already, Indonesians spend the
fifth longest amount of time in the world on the Internet per day,
spending an average of 8 hours and 36 minutes online per day,
compared to the global average of 6 hours and 42 minutes10.

Reason #4:
Stable

Described by the World Bank as one of East Asia Pacific’s most
vibrant democracies, Indonesia has maintained both its political
and economic stability, despite various global uncertainties over
the last two decades. Indonesia also has a “Stable” outlook with
investment grade ratings from S&P, Fitch, and Moody’s.

The political and economic stability is important as Indonesia’s
economic planning follows a 20-year development plan with
5-year medium-term plans. The current 5-year plan is designed
to further strengthen its economy by improving Indonesia’s
human capital and competitiveness in the global market.

Reason #5: Huge
growth opportunity

According to a 2017 Asia Development Bank (ADB) report11,
the fastest growth in data centres is occurring in emerging
economies. The data centre market in Asia is projected to be
bigger than North America’s in the next 18 months and will
continue to grow at a faster rate12.

Unlike neighbouring Singapore’s 400MW of capacity and
another 100MW coming online by end-202013, the colocation
capacity in Jakarta is smaller despite its much larger population.
Many Indonesia enterprises are also known to house their
equipment in Singapore data centres, which translate into an
opportunity for growth.

Moreover, Indonesia’s Government Regulation No. 82/2012 will
only serve to increasing local data centre demand. Unsurprisingly,
the Indonesia data centre market is expected to grow at a CAGR
of around 11% during the period 2019-202514.

10https://www.thejakartapost.com/academia/2019/03/18/how-indonesians-embrace-the-digital-world.html
11https://www.adb.org/sites/default/files/publication/236621/ino-data-center-market.pdf
12https://www.datacenterdynamics.com/en/analysis/princeton-digital-group-aims-growth-asia-pacific/
13https://www.businesstimes.com.sg/hub-projects/property-2019-march-issue/singapores-data-centre-market-at-a-crossroads
14https://www.globenewswire.com/news-release/2020/07/21/2065426/0/en/Indonesian-Data-Center-Market-Forecasts-2020-2025
-Adoption-of-All-Flash-and-Hybrid-Arrays-Will-Grow-in-Cloud-Data-Center-Deployments.html