Indonesia’s population has gradually transitioned digitally, with the young market spending almost nine hours on the internet daily. Moreover, its government has stepped up to support its digital economy. As a result, the data centre market in Indonesia is poised for significant growth in the coming years.
Predictions reveal that the Indonesia data centre market size will reach USD 3.09 billion by 2030 from USD 1.45 billion in 2023, with a CAGR of 11.4% during the 2024-2030 forecast period.
Forecasts also project that Indonesia will have the largest digital economy in Southeast Asia by 2030. In 2024, the total data centre capacity in Indonesia reached 514MW.
Data centre boom in Indonesia
Mayank Srivastava, CEO of BDx Data Centres, the company that has built the first sovereign AI data centre in Indonesia, has observed a significant transformation of data centre operations in the country in the past few years.
With the pandemic spurring remote work, online learning and e-commerce, reliable data storage and processing became a pressing need in the country.
"Data centre operators have expanded capacity, modernised infrastructure, and incorporated cutting-edge technologies like artificial intelligence and cloud computing to enhance efficiency and scalability," he said, highlighting the role of these emerging technologies in driving the country's data centre market growth.
Moreover, the government has supported growth by enforcing data localisation laws to protect the data of its citizens. Government Regulation No. 71 of 2019 on Electronic Systems and Transactions mandates electronic system operators (ESOs) in specific industries to retain the processing and storage of personal data within the country.
Srivastava emphasised the importance of data localisation, noting that
regulatory changes, coupled with Indonesia's growing digital economy, have drawn foreign investment, further driving market growth.
As part of its 'Making Indonesia 4.0' strategy, a national initiative to transform Indonesia into a digital powerhouse, the country aims to build a nationwide digital infrastructure by advancing its network and digital platforms and supporting the data centre sector.
"Collectively, these shifts highlight how Indonesia's data centres have adapted to new challenges and opportunities, laying the groundwork for future innovation in our increasingly digital world," he continued.
Shaping the future of data centres
While Indonesia is making strides in its own digital transformation, the demand for data centres is also growing across the broader Asia-Pacific region.
Cushman and Wakefield report that the Asia Pacific region recorded the most significant addition of scale in the operational capacity of the data centre market in recent times, adding 1.3GW of new supply and reaching closer to the 12GW mark during the first half of 2024.
When asked what can shape the future of data centres in the region in the next five years, Srivastava said certain key technologies like AI will drive significant investments that allow intelligent automation, predictive analytics, and real-time infrastructure monitoring.
"These capabilities will optimise energy efficiency, manage workloads effectively, and proactively address potential issues. With the rise of AI-driven applications, data centres must also adopt high-performance computing technologies to meet these demands," he said.
Aside from AI, Srivastava posits that hyperscale data centres will trend, offering scalable solutions for surging digital traffic and complex data processing needs.
"Modular designs and high energy performance make these facilities essential for supporting cloud services, content delivery, and enterprise applications," he explained.
Moreover, he believes that interconnectivity will play a critical role in the future of data centres as the technology can facilitate seamless communication between businesses, service providers, and users.
"Finally, edge computing will complement centralised data centres, bringing processing closer to users for latency-sensitive applications such as smart cities and industrial automation. These technologies collectively position data centres for scalability, sustainability, and adaptability," added the executive.
Sustainability and data centres
At the core of data centre evolution is sustainability, according to Srivastava.
"Renewable energy sources, energy-efficient hardware, and advanced cooling technologies like liquid and free-air cooling are essential for minimising environmental impact while maintaining operational efficiency," he said.
He considers sustainability the defining feature of BDX Data Centres' new CGK4 campus in Indonesia. Srivastava said it operates on renewable energy and employs energy-efficient cooling technologies.
"This focus on green practices reduces environmental impact while maintaining high operational efficiency, setting an example for other data centres to adopt eco-friendly solutions," he said.
Srivastava explained that focusing on sustainable practices allows the company to align with the Science Based Targets initiative (SBTi), a global initiative that helps companies set science-based emissions reduction targets to achieve Net Zero Emissions, allowing them to drive business strategies without compromising sustainability targets.
Future-proofing and scaling
Aside from sustainability, Srivastava highlights the importance of flexibility innovation to keep up with increasing IT demands.
"Modular designs allow for easy capacity expansion, helping to manage costs and align resources with real-time needs. A hybrid model that combines colocation, cloud services, and edge computing offers the versatility required to handle diverse workloads and support latency-sensitive applications," he said.
"Strong interconnectivity with low-latency connections to network, content, and cloud providers ensures smooth data transfer for real-time applications," he explained.
Moreover, Srivastava said that automation and software-defined networking (SDN) help streamline resource allocation and increase operational efficiency.
"By distributing workloads closer to users through edge computing, data centres improve scalability and performance," he said.
He said these strategies enable data centres to "keep pace with evolving IT needs, maintain a competitive edge, and fuel long-term growth in an increasingly digital world."
Data centre operations
Srivastava urges users of data centre services seeking to select and use data centre operations to consider reliability and high uptime.
"Power management is essential, focusing on energy consumption, distribution, and ensuring reliable operation of IT infrastructure," he said.
Moreover, he underlined the importance of network ecosystem and interconnectivity, saying that it enables seamless connections to ISPs, cloud services, financial providers, and AI partners.
"Redundant connections ensure continuity during outages, while interconnectivity allows businesses to scale rapidly across networks and services. For hybrid cloud environments, access to major cloud providers and easy integration is key," he explained.
He urges organisations to look for certifications such as Tier III or IV, which ensure near-perfect uptime and multiple paths for power and cooling.
He also underscored the importance of security, including physical and cyber protections and compliance with standards like ISO 27001, an international standard for managing information security.
"Lastly, ensure flexibility in service models such as colocation, cloud, edge, hybrid, and responsive support. The right data centre partner will offer personalised solutions, optimise power use, ensure security, and enable growth while aligning with your sustainability goals," the BDX Data Centres executive reminded.
Trends shaping data centres
As data centre demand continues to rise, companies must balance scalability, innovation, and sustainability
By staying ahead of trends and adopting emerging technologies the industry can ensure growth and resilience, not only in Indonesia but in the whole Asia Pacific region.
