Indonesia is projected to become world’s 5th largest economy with the population of over 290 million by 2030. The increase over population in Indonesia also aligned with the advancement of technology as well as the transition of Indonesia’s industries into Industrial 4.0 era. This leads to greater demand over data management, Artificial Intelligence (AI), and Internet of Things (IoT) in the coming years.
Looking at the industry on hand, Indonesia’s data center market is projected to grow at the Compound Annual Growth Rate (CAGR) of 16.92% in 2029. The market size also is projected to reach over USD 11 billion in 2029, growing almost triple from 2024. The statistics show that there is a huge economic potential in Indonesia for data center in the coming years.
One of the contributing factors is rising demand for 5G smartphones at reasonable price. The availability of 4G services nationwide and the launch of 5G in 2021 contribute to the steady growth of smartphones industry. This growth in 4G and 5G smartphones as well as affordable data packs are projected to drive data consumption among the populace, hence positively impacting the data center market in Indonesia.
The increased in data consumption also aligned with the growth of IT load capacity in Indonesia. The total IT load capacity in Indonesia is expected to reach 1,414 MW in 2029, growing more than double from 2024. This shows the usage of IT equipment such as servers, routers, storage equipment and communications switches are increasing steadily, leading to rising market demand for Indonesia data center market.