Jakarta, INTI – In an exclusive interview conducted by the INTI Media team on April 15, 2025, Hendra Suryakusuma, Chairman of the Indonesia Data Center Provider Organization (IDPRO), shared his insights on the role of regulations in shaping the growth of Indonesia's data center and cloud computing sector. He emphasized the significance of the Personal Data Protection Law (UU PDP), the challenges faced by the industry, and how regulatory frameworks influence the nation's competitiveness in the global digital economy.
The Role of Personal Data Protection Law in Shaping the Industry
Hendra began by explaining how Indonesia's Personal Data Protection Law (UU PDP) could have a profound impact on the country's data center industry. Drawing a comparison with the European Union's General Data Protection Regulation (GDPR), he stressed that the law provides a strong foundation for data security and protection. "The UU PDP presents a robust regulatory framework for ensuring that data is secured, with serious penalties for non-compliant over-the-top (OTT) service providers," he said.
According to Hendra, this regulation, alongside the growing demand for domestic data storage, aligns perfectly with the nation's shift toward enhancing digital infrastructure. "By focusing on data sovereignty, the law ensures that data remains within Indonesia’s borders, thus driving the demand for data centers in the country," he added. However, he noted that Indonesia’s business environment still needs improvements in ease of doing business and regulatory processes to remain competitive in the regional digital infrastructure race.
Addressing Key Challenges in the Data Center Industry
Hendra highlighted three critical challenges hindering the industry’s growth: a shortage of skilled talent, energy supply concerns, and regulatory constraints. The rapid expansion of the data center industry has outpaced the availability of qualified engineers and technicians, resulting in fierce competition for human resources. "We’re seeing a lot of talent poaching within the industry, which makes it harder for us to maintain a sustainable workforce," Hendra explained.
To address the talent shortage, IDPRO has formed partnerships with various educational institutions, including the University of Indonesia (UI), Bandung Institute of Technology (ITB), and Batam State Polytechnic. These collaborations aim to develop specialized curricula tailored to the needs of the data center industry.
The second challenge revolves around Indonesia's reliance on fossil fuels, particularly coal, for energy production. As the demand for data center energy increases, Hendra emphasized the need for more sustainable energy solutions. "We must shift to greener energy alternatives such as solar, wind, and geothermal power to reduce the environmental impact of our energy consumption," he said.
The Regulatory Environment and Competitiveness of the Industry
In discussing the regulatory landscape, Hendra pointed out that Indonesia lags behind other Southeast Asian nations, such as Malaysia and Thailand, in implementing favorable data center regulations. These countries have created conducive environments by introducing on-shoring data regulations and offering fiscal incentives. In contrast, Indonesia's permit approval process, such as the Building Construction Approval (PBG), can take up to 10 months. "Malaysia has reached 1.3 GW of data center capacity, while Indonesia’s total capacity remains under 510 MW. This clearly shows that regulatory efficiency is critical for the growth of this sector," Hendra noted.
However, he remains optimistic about Indonesia's potential. The country’s abundant renewable energy resources, large population, and growing digital economy position it as an attractive destination for data center investment. "Indonesia has the resources and talent potential to become a hub for data centers in the Asia-Pacific region," he concluded.
Opportunities for Indonesia’s Data Center Future
Looking ahead, Hendra emphasized the importance of regulatory reforms to accelerate the development of Indonesia’s data center industry. He urged the government to adopt investment-friendly policies, simplify the business permitting process, and incentivize the use of green energy. By doing so, Indonesia can unlock its potential as a key player in the regional and global digital infrastructure market.
Conclusion
Indonesia stands at a pivotal moment in the evolution of its data center and cloud computing industry. With the right regulatory frameworks, investment incentives, and focus on sustainable growth, Indonesia has the potential to become a dominant player in the Asia-Pacific region. However, to reach this potential, coordinated efforts from both the government and industry stakeholders are essential to overcome current challenges. As the country accelerates its digital transformation, the role of data centers as critical infrastructure will only become more pronounced, supporting the nation's journey toward a digital future.
Read More : Google Injects Massive $75 Billion into AI and Global Cloud Infrastructure by 2025: Launches Advanced Networks and Chips