Indonesia Cloud Market Share Outlook to 2028

Indonesia Cloud Market Overview

The Indonesia Cloud market has experienced notable growth, reaching a valuation of USD 1.85 billion in 2023. This growth is driven by increased digital transformation across various sectors such as finance, healthcare, and retail. The adoption of cloud services is spurred by the need for scalable and flexible IT infrastructure.

Key players in the Indonesia cloud market include Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), Alibaba Cloud, and IBM Cloud. These companies have established a strong presence by offering various cloud services such as infrastructure as a service (Iaa S), platform as a service (Paa S), and software as a service (Saa S).

In 2024, AWS announced the launch of a new data center in Jakarta, expanding its presence in Southeast Asia. This development aims to enhance AWS's service delivery capabilities and support local customers' growing demand for cloud services. The data center is expected to create job opportunities and drive innovation in the local tech industry.

Jakarta and Surabaya dominate the Indonesia cloud market due to their advanced infrastructure and high concentration of businesses. Jakarta hosts many multinational corporations and large enterprises that heavily invest in cloud services, while Surabaya, as a major commercial hub, also sees substantial cloud adoption across various industries.

Indonesia Cloud Market Segmentation

Indonesia Cloud Market is segmented into following three segments:

By Service Type: The Indonesia cloud market is segmented by service type into Infrastructure as a Service (Iaa S), Platform as a Service (Paa S), and Software as a Service (Saa S). In 2023, Iaa S held the dominant market share due to its cost-effectiveness and scalability. Businesses prefer Iaa S for its flexibility in managing IT resources and ability to support varying workloads.

By Deployment Model: The market is segmented by deployment model into public cloud, private cloud, and hybrid cloud. In 2023, the hybrid cloud segment dominated the market, driven by its ability to offer the best of both worlds: security and control of private clouds with the scalability of public clouds.

By Region: The Indonesia cloud market is segmented into North, South, East, and West regions. In 2023, the North region held the largest market share due to its developed IT infrastructure and high concentration of tech companies. Cities like Jakarta and Bandung are key contributors to this dominance.

Indonesia Cloud Market Competitive Landscape

Company

Establishment Year

Headquarters

AWS

2006

Seattle, USA

Microsoft Azure

2010

Redmond, USA

Google Cloud

2008

Mountain View, USA

Alibaba Cloud

2009

Hangzhou, China

IBM Cloud

2007

Armonk, USA

Microsoft Azure: Microsoft's $1.7 billion investment in Indonesia is set to unfold over the next four years, with plans to enhance cloud and artificial intelligence (AI) infrastructure in the country. This announcement was made by CEO Satya Nadella during his visit to Jakarta in April 2024The investment aims to train 840,000 Indonesians in AI skills.

Google Cloud: In late June 2024, Google Cloud officially launched its cloud region in Jakarta, Indonesia, marking a significant step in the country's digital transformation journey. This initiative aims to support the increasing demand for digital services and infrastructure in Indonesia, which is rapidly becoming a digital powerhouse in Southeast Asia.

Indonesia Cloud Industry Analysis

Indonesia Cloud Market Growth Drivers

Digital Transformation Across Industries: The rapid digital transformation in sectors like finance, healthcare, and retail is a key driver of growth for Indonesia's cloud market. In 2024, the Indonesian government noted that a large portion of enterprises and many small and medium-sized businesses had adopted cloud solutions to improve operational efficiency and reduce costs.

Increased Investment in Cloud Infrastructure: Investment in cloud infrastructure has been steadily increasing, with major tech companies committing substantial resources to expand their presence in Indonesia. In 2023, an investment of USD 300 million was made with respect to establishment of new data center in Jakarta.

Retail Sector's E-commerce Growth: The growth of e-commerce in Indonesia is driving the retail sector's adoption of cloud services. Retailers are leveraging cloud solutions for inventory management, customer relationship management (CRM), and data analytics to enhance the shopping experience.

Indonesia Cloud Market Challenges

Digital Divide: A substantial portion of Indonesia, rural areas particularly Eastern part of Indonesia, suffers from inadequate internet connectivity. This limitation hinders the ability of businesses to fully utilize cloud services, as reliable and high-speed internet is essential for effective cloud operations.

Weak ICT Infrastructure: Indonesia's vast archipelago, comprising over 17,000 islands, presents significant logistical challenges for infrastructure development. Remote areas, especially in the eastern regions like Maluku, Papua, and parts of Nusa Tenggara, struggle to access reliable internet connectivity and ICT services.

Indonesia Cloud Market Government Initiatives

Digital Economy Blueprint: The Indonesian government is developing a comprehensive digital economy strategy aimed at enhancing digital infrastructure and promoting cloud adoption across various sectors. This initiative seeks to position Indonesia as a leading digital economy in Southeast Asia. A key component of this strategy is the Visi Indonesia Digital 2045, which targets a GDP per capita of $20,000 to $23,000 by 2045.

National Data Center Project: The Indonesian government has initiated the construction of its first National Data Center (Pusat Data Nasional, PDN) in Cikarang, West Java, breaking ground in November 2022. This facility is expected to be completed and inaugurated by September 2024, with full operational readiness targeted for October 2024. The PDN aims to enhance cloud services in the public sector by consolidating over 24,000 government applications and supporting the broader e-government initiative.

Indonesia Cloud Market Future Outlook

The Indonesia cloud market will continue to grow by 2028. This growth will be driven by increased adoption of hybrid cloud solutions, expansion of cloud services in rural areas, and the rising demand for industry-specific cloud solutions. The government’s ongoing initiatives to improve digital infrastructure and promote cloud adoption among SMEs will also play a critical role in this market's future growth.

Future Market Trends

Increased Adoption of Hybrid Cloud Solutions: By 2028, hybrid cloud adoption in Indonesia is projected to rise significantly due to the demand for improved data security and operational flexibility. Businesses will increasingly utilize hybrid clouds to balance workloads between private and public environments, ensuring data protection and optimizing resource use.

Growth of Industry-Specific Cloud Solutions: The demand for industry-specific cloud solutions is set to increase as businesses pursue tailored services to meet their unique needs. By 2028, sectors such as agriculture, manufacturing, and logistics are anticipated to adopt specialized cloud solutions that cater to their specific challenges and requirements.
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