Market Trends of Indonesia Data Center Rack Industry
IT and Telecom to have significant market share
- Among end-user industries, Telecom and BFSI are expected to contribute the highest market share. In contrast, the manufacturing industry is anticipated to witness the highest growth over the study period at 29.49%. The IT load demand will reach nearly 36.1 MW by 2029, owing to the increasing initiatives on Industry 4.0 in the manufacturing sector, which is one of the major backbones of the country's economy.
- The telecommunication sector will maintain its dominance due to the growing adoption of 5G networks among users. The 5G mobile data speed is expected to increase significantly, reaching 259.3 Mbps by 2029. This suggests increasing data traffic and growing demand for data center servers in the market.
- E-learning became a necessary norm post-pandemic. Digital platforms like WeKiddo made it easier for government schools to interact with their students during these times. Using such features, teachers were able to assign projects and tasks that students could quickly complete on their phones. The platform also allowed parents to monitor their children's activities, such as scores, schedules, and attendance. This further increased the demand for cloud platforms and, in turn, data center servers to host them.
- Major industries, such as e-commerce, healthcare, telecommunication, and government, will significantly impact the demand for data center services and solutions. More service aggregators aim to connect the urban population with rural cultures and heritage, providing a platform for MSMEs to grow in the country.
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Full Rack has Majority Market Share
- In Indonesia, due to growing space scarcity between various companies, the full rack has a majority of the market share. In order to cope with increasing rack capacity due to the rapid growth of mobile broadband and the increase in Big Data Analytics combined with cloud computing, it is necessary to build a fully rack-equipped data center.
- Companies increasingly rely on data centers for efficient management of their databases and storage, as they generate significant amounts of data every day. The main driving factor for data center rack usage is, therefore, the increased deployment of fully configured data centers. Also, the growth of the market is being influenced by the growing demand for IT services and investments made by large companies.
- At first, there was a limited focus on rack space in data centers; only size and cost were taken into account during deployment. Nevertheless, there is an opportunity for increased use of rack space in the data center as more and more users from different sectors, such as online banking, telecommunications, media and entertainment, and others, are adopting applications with higher density.
- Further, Large-sized data centers, which once held a market share of over 70% in 2017, are projected to witness a downward trend during the forecast period, with a market share of 16.5% in 2029. These legacy data centers with older data center infrastructure are becoming unattractive to customers as they are shifting toward more advanced and safe massive and mega data centers. Such challenges are expected to create more opportunities for new data centers and drive the rack market.
