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Amazon Web Services is planning a $5 billion investment in Indonesia's cloud sector
TECHNOLOGY Indonesia

Amazon Web Services is planning a $5 billion investment in Indonesia's cloud sector

Amazon Web Services, the cloud arm of the world's largest e-commerce company, announced plans to invest $5 billion in Indonesia over the next 15 years, launching the country's first cloud infrastructure area. Indonesia is swiftly becoming one of Asia's most important data battlegrounds.

The AWS Asia Pacific (Jakarta) Area, which was launched on Tuesday, is the cloud company's second so-called active region in Southeast Asia, following Singapore. It is the cloud company's 10th in Asia Pacific and 26th overall.

AWS customers in Indonesia, 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," according to the company.

AWS also stated that with the new Jakarta area, it plans to invest an estimated $5 billion in Southeast Asia's largest economy, including the construction of more data centers.

Indonesia has the world's fourth-largest population and a thriving digital economy, fueled by a slew of tech unicorns — firms valued at more than $1 billion — as well as increased demand for digital services during the coronavirus pandemic and its aftermath.

The government's local data storage regulations are driving up competition for data centers and cloud services in the country.

Indonesia was the second-highest earner in Southeast Asia's cloud market last year, according to international property consultant Jones Lang LaSalle, with $600 million in total cloud-based income, after Singapore's $1.8 billion. By 2025, Indonesia's revenue is predicted to have more than tripled.

“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.”

According to Prasad Kalyanaraman, AWS vice president for infrastructure services, the region would, “Help Indonesian institutions, innovative startups, and world-leading companies deliver cloud-powered applications to fuel economic development across the country.”

Indonesian health tech company Halodoc, which saw traffic spike dramatically during the pandemic, and Indonesian media and property conglomerate MNC Group, which made a move into digital banking this year, are among AWS's clients. E-commerce company Tokopedia, travel site startup Traveloka, delivery company SiCepat, and state-owned post office Pos Indonesia are among the other local clients.

Source: Nikkei Asia 

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