REPORT ATTRIBUTE |
DETAILS |
Historical Period |
2019-2022 |
Base Year |
2023 |
Forecast Period |
2024-2032 |
Indonesia Data Center Cooling Market Size 2023 |
USD 64.20 Million |
Indonesia Data Center Cooling Market, CAGR |
12.87% |
Indonesia Data Center Cooling Market Size 2032 |
USD 234.42 Million |
Market Overview
The Indonesia Data Center Cooling Market is projected to grow from USD 64.20 million in 2023 to an estimated USD 234.42 million by 2032, with a compound annual growth rate (CAGR) of 12.87% from 2024 to 2032. This growth is driven by the rising demand for data centers as businesses increasingly digitize their operations, coupled with the expanding e-commerce sector and cloud services.
Key drivers in the market include the surge in internet users, the proliferation of IoT devices, and the government’s efforts to promote the digital economy in Indonesia. Additionally, trends such as the adoption of liquid cooling technologies and green cooling solutions are reshaping the market landscape, as companies prioritize sustainability and energy conservation in their operations.
Geographically, the market is concentrated in major urban centers such as Jakarta and Surabaya, where large-scale data centers are being established. Key players operating in the Indonesia data center cooling market include Vertiv Group Corp, Schneider Electric SE, Stulz GmbH, Rittal GmbH & Co. KG, and ABB Ltd, who are driving innovation in cooling technologies to cater to the growing demand for efficient data center operations.
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Market Drivers
Rising Demand for Data Centers Driven by Digital Transformation
Indonesia’s rapid digital transformation is a primary driver of the data center cooling market. The country is experiencing significant growth in internet penetration, e-commerce, cloud computing, and digital services, increasing the need for robust data centers. Businesses of all sizes are moving operations online, leading to an explosion of data generation. This shift requires data centers to store, manage, and process vast amounts of information securely and efficiently. The surge in digital payments, mobile applications, and remote work models following the COVID-19 pandemic has further fueled this demand. In response, the construction and expansion of data centers across Indonesia have become a priority. Companies need to ensure these facilities can handle rising data traffic. Data centers generate significant heat, and efficient cooling systems are critical to maintaining operational stability and extending hardware lifespan. The rising demand for data centers in Indonesia is driving the need for advanced cooling solutions that can manage this growing infrastructure, ensuring optimal performance while minimizing energy consumption and operational costs.
Energy Efficiency and Sustainability Initiatives
As data centers become larger and more complex, energy consumption has emerged as a critical concern for operators and stakeholders in Indonesia. Cooling systems are among the most energy-intensive components of data centers, often accounting for nearly half of a facility’s total energy use. This has made energy efficiency a top priority for data center operators, especially as sustainability becomes a key focus for businesses globally. In Indonesia, there is increasing pressure on companies to adopt greener practices in line with global environmental goals and government regulations on energy usage. The government has been actively promoting initiatives aimed at reducing carbon emissions and encouraging the use of renewable energy sources. As a result, data center operators are investing in energy-efficient cooling technologies to reduce their carbon footprints and operational expenses. Innovative solutions such as liquid cooling, which uses less energy than traditional air-based systems, and free cooling systems that harness natural environmental conditions to cool facilities, are gaining traction in the market. Moreover, sustainable cooling solutions not only align with corporate social responsibility initiatives but also offer a competitive advantage.
Adoption of Advanced Cooling Technologies
The growing complexity and density of data centers in Indonesia have led to a greater reliance on advanced cooling technologies to ensure efficient operation. Traditional air-based cooling systems are becoming less effective as data centers expand, necessitating the adoption of more sophisticated cooling solutions. One of the major trends in the market is the increasing adoption of liquid cooling technologies, which offer superior performance in managing high-density workloads and reducing the energy required for cooling. Liquid cooling systems are particularly effective for high-performance computing and artificial intelligence applications, which generate more heat than conventional workloads. These systems use fluids to absorb and transfer heat away from data center equipment, providing a more efficient and direct cooling method than air-based systems. As demand for AI and machine learning applications grows in Indonesia, data centers must adopt liquid cooling solutions to handle the intense processing power these technologies require. In addition to liquid cooling, modular and hybrid cooling systems are gaining traction. These solutions allow data center operators to scale their cooling infrastructure according to demand, providing flexibility and cost savings. As data centers in Indonesia continue to evolve, the adoption of advanced cooling technologies will play a crucial role in their ability to operate efficiently, reduce energy consumption, and maintain uptime.
Government Support and Infrastructure Development
The Indonesian government’s push toward digital infrastructure development is another key driver of the data center cooling market. Indonesia has recognized the importance of building a robust digital ecosystem to support its growing economy, and data centers are central to this vision. The government has implemented policies aimed at fostering digital innovation, expanding internet access, and encouraging investment in data infrastructure. Key initiatives such as Indonesia’s National Broadband Plan and the Palapa Ring project, which aims to provide high-speed internet across the archipelago, are contributing to the rise of data centers. The government’s focus on digitalizing public services and promoting smart city development also necessitates more data storage and processing capabilities, further driving the demand for data center facilities. In turn, this is leading to greater demand for efficient and reliable cooling solutions to support these new data centers. Additionally, the Indonesian government is encouraging foreign investment in the country’s digital infrastructure. With its strategic location in Southeast Asia, Indonesia is becoming an attractive hub for global data center operators looking to expand their footprint in the region. As international companies invest in the development of new data centers, the need for advanced cooling solutions will increase, fueling the growth of the data center cooling market.
Market Trends
Shift Towards Liquid Cooling Solutions
The Indonesia data center cooling market is experiencing a significant shift towards liquid cooling solutions. As data centers expand to accommodate more complex computing systems, traditional air-based cooling methods are becoming less effective. Liquid cooling, which uses fluids to absorb and dissipate heat, is gaining popularity due to its efficiency in managing heat from high-performance computing, AI, and machine learning workloads. For instance, PT Telkom Indonesia, the country’s largest telecommunications company, has implemented liquid cooling solutions in its newest data center facility in Jakarta, resulting in a 30% reduction in cooling energy consumption. This trend is driven by the need for better performance and energy efficiency. The Indonesian government’s push for digital transformation, as outlined in its “Making Indonesia 4.0” roadmap, is also contributing to the adoption of advanced cooling technologies in data centers across the country.
Increased Focus on Energy Efficiency and Green Cooling Solutions
Sustainability has become a key focus in the Indonesia data center cooling market, with companies prioritizing energy efficiency and green technologies. Data center operators are increasingly adopting innovative solutions to reduce energy usage while maintaining optimal cooling performance. For instance, DCI Indonesia, a leading data center provider in the country, has implemented a state-of-the-art cooling system in its JK5 data center that utilizes outside air economization, reducing the facility’s Power Usage Effectiveness (PUE) to 1.3, significantly lower than the industry average. The trend towards modular and hybrid cooling systems is also gaining traction, offering scalability and flexibility to adjust cooling capacity based on real-time demands. This approach not only optimizes energy use but also reduces operational expenses. The Indonesian Ministry of Energy and Mineral Resources has set targets to increase the share of renewable energy in the country’s energy mix, which is encouraging data center operators to adopt more sustainable cooling practices.
Market Restraints and Challenges
High Initial Costs of Advanced Cooling Technologies
One of the key restraints in the Indonesia data center cooling market is the high initial investment required for deploying advanced cooling technologies. While solutions such as liquid cooling and modular systems offer long-term benefits in terms of energy efficiency and operational savings, the upfront costs associated with implementing these systems can be a significant barrier for many data center operators, especially smaller enterprises. These systems require specialized equipment, infrastructure modifications, and expertise, all of which contribute to higher capital expenditure. For instance, a survey conducted by the Indonesian Data Center Association revealed that a majority of small and medium-sized data center operators cited high initial costs as the primary reason for not adopting advanced cooling technologies. The government’s Digital Indonesia initiative has also highlighted the financial challenges faced by local data center operators in upgrading their cooling infrastructure. This cost-related challenge is likely to limit the widespread adoption of innovative cooling technologies in the market, particularly among smaller or newer data centers.
Limited Skilled Workforce and Technical Expertise
Another significant challenge facing the Indonesia data center cooling market is the shortage of skilled professionals with the technical expertise required to design, install, and maintain advanced cooling systems. The complexity of newer technologies such as liquid cooling, free cooling, and hybrid systems demands a workforce with specialized knowledge and experience. For instance, a report by the Ministry of Communication and Information Technology highlighted a substantial gap between the demand for data center cooling specialists and the available workforce in Indonesia. Additionally, a survey conducted by a leading IT industry association found that over half of the data centers in the country reported difficulties in finding and retaining skilled cooling system technicians. This lack of skilled labor not only slows down the adoption of cutting-edge cooling solutions but also increases operational risks and costs for data center operators. Addressing this skills shortage is crucial for the sustainable growth of the data center cooling market in Indonesia.
Market Segmentation Analysis
By Component
The Indonesia Data Center Cooling Market is segmented by component into Solutions and Services. The Solutions segment commands a significant share due to the high demand for advanced cooling equipment like air conditioners, precision air conditioners, chillers, and air handling units. These solutions are crucial for maintaining optimal temperatures and ensuring the efficient operation of data centers. For instance, DCI Indonesia, a leading data center provider in the country, has implemented advanced cooling solutions in its facilities to achieve high energy efficiency. The Services segment, encompassing installation, deployment, support, consulting, and maintenance services, is also growing. This growth is driven by the need for professional expertise to properly install and maintain complex cooling systems, which helps data centers reduce downtime and extend equipment lifespan. For example, Schneider Electric offers comprehensive data center cooling services in Indonesia, including design, installation, and ongoing maintenance support.
By application
The market is divided into Telecom & IT, Retail & BFSI, Healthcare, Energy, and Others. The Telecom & IT sector holds a substantial share due to the rapid expansion of cloud computing, big data analytics, and the increasing use of IoT devices, all requiring robust data center infrastructures with efficient cooling systems. For instance, Telkom Indonesia, the country’s largest telecommunications company, has been investing heavily in data center infrastructure, including advanced cooling technologies, to support its growing digital services. The Retail & BFSI sectors are contributing to market growth as they rely more on data centers for online services and secure transaction processing. Additionally, the Healthcare and Energy sectors are adopting advanced data center solutions to manage electronic health records and smart energy grids, respectively, further driving the demand for effective cooling technologies in these industries. For example, the Indonesian government’s push for digital healthcare services has led to increased investment in data centers with efficient cooling systems to support the storage and processing of medical data.
Segments
Based on Component
Based on Application
- Telecom & IT
- Retail & BFSI
- Healthcare
- Energy
- Others
Based on Solution
- Air Conditioners
- Precision Air Conditioners
- Chillers
- Air Handling Units
- Others
Based on Containment
- Raised Floor with Containment
- Hot Aisle Containment (HAC)
- Cold Aisle Containment (CAC)
- Raised Floor without Containment
Based on Services
- Installation & Deployment
- Support & Consulting
- Maintenance Services
Based on Cooling Type
- Raised Floor
- Non-Raised Floors
Based on Structure
- Rack-based Cooling
- Row-based Cooling
- Room-based Cooling
Based on Region
- Urban Centers (Jakarta, Surabaya)
- Emerging Regions
Regional Analysis
Jakarta (45%):
The Indonesia Data Center Cooling Market is primarily concentrated in the country’s urban and industrial hubs, with Jakarta dominating the market due to its strategic importance as the nation’s capital and business center Jakarta holds approximately 45% of the market share, driven by the concentration of large-scale data centers operated by multinational corporations, cloud service providers, and financial institutions. For instance, according to a survey conducted by the Indonesian Data Center Association, Jakarta hosts over 60% of the country’s total data center capacity. The city’s advanced infrastructure, reliable power supply, and well-established telecommunications networks make it the most attractive location for data center development. Additionally, the rapid adoption of cloud computing and e-commerce in Jakarta fuels the demand for advanced cooling solutions, ensuring efficient and sustainable data center operations.
Surbaya (25%):
Surabaya, the second-largest city, accounts for around 25% of the data center cooling market.Surabaya’s market is growing as businesses and data center operators look to diversify their presence beyond Jakarta. For instance, the East Java provincial government reported a 30% increase in data center investments in Surabaya over the past two years. Surabaya benefits from increasing investments in its digital infrastructure and the rise of e-commerce and cloud services, particularly from small and medium-sized enterprises (SMEs) that require data storage and management. With growing interest from global players, Surabaya is poised to expand its data center footprint, further driving demand for energy-efficient and advanced cooling technologies. The Indonesian Ministry of Communication and Information Technology has identified Surabaya as a key growth area for digital infrastructure development in its latest five-year plan.
Key players
- Hitachi Ltd
- Stulz GmbH
- Schneider Electric SE
- Vertiv Group Corp.
- Johnson Controls International PLC
- Emerson Electric Co.
- Fujitsu General Limited
- Mitsubishi Heavy Industries Thermal Systems Ltd.
Competitive Analysis
The Indonesia Data Center Cooling Market is highly competitive, with major players focusing on innovation and energy-efficient solutions to cater to the growing demand for advanced cooling technologies. Companies such as Schneider Electric SE and Vertiv Group Corp. lead the market by offering integrated cooling systems that ensure high performance and energy savings. Hitachi Ltd and Johnson Controls International PLC emphasize sustainable and modular cooling solutions, while Stulz GmbH and Emerson Electric Co. bring expertise in precision air conditioning systems, which are critical for maintaining stable environments in high-density data centers. Fujitsu General Limited and Mitsubishi Heavy Industries Thermal Systems Ltd. are key players offering a range of cooling systems tailored for varying data center needs. Overall, competition in this market revolves around providing innovative, reliable, and cost-effective cooling solutions to support the growing data center infrastructure in Indonesia.
Recent Developments
- In June 2024, Schneider Electric inaugurated a new cooling factory in Bengaluru, India, with an investment of approximately 10 million euros. While this facility is not in Indonesia, it is expected to cater to the growing data center ecosystem in the Asia-Pacific region, including Indonesia.
- In December 2023, Vertiv announced the acquisition of CoolTera Ltd., a provider of coolant distribution infrastructure for data center liquid cooling technology. This acquisition is expected to strengthen Vertiv’s capabilities in supporting the deployment of AI at scale, which could potentially benefit the Indonesian market as well.
- In June 2024, Johnson Controls launched a new data center-focused organization called Global Data Center Solutions. This new division aims to provide integrated solutions to data center customers worldwide, which may include the Indonesian market.
- In April 2024, Mitsubishi Electric’s subsidiaries acquired AIRCALO, a French air-conditioning company. While this acquisition is not specific to Indonesia, it demonstrates Mitsubishi Electric’s commitment to expanding its HVAC systems business globally, which could potentially impact its offerings in the Indonesian market.
Market Concentration and Characteristics
The Indonesia Data Center Cooling Market is moderately concentrated, with a mix of global and regional players dominating the landscape. Leading companies like Schneider Electric SE, Vertiv Group Corp., and Johnson Controls International PLC hold significant market shares due to their extensive product portfolios and expertise in energy-efficient and innovative cooling solutions. The market is characterized by increasing demand for sustainable and scalable cooling systems, driven by the rapid expansion of data centers and the need for improved operational efficiency. While global players dominate in terms of advanced technology offerings, local companies are gaining traction by providing cost-effective solutions and catering to the growing needs of smaller data centers. The competitive environment is shaped by the introduction of cutting-edge technologies such as liquid cooling, precision air conditioning, and modular systems, with a strong focus on energy efficiency and sustainability to meet both regulatory requirements and market demands.
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Report Coverage
The research report offers an in-depth analysis based on Component, Application, Solution, Containment, Services, Cooling Type, Structure and Region. It details leading market players, providing an overview of their business, product offerings, investments, revenue streams, and key applications. Additionally, the report includes insights into the competitive environment, SWOT analysis, current market trends, as well as the primary drivers and constraints. Furthermore, it discusses various factors that have driven market expansion in recent years. The report also explores market dynamics, regulatory scenarios, and technological advancements that are shaping the industry. It assesses the impact of external factors and global economic changes on market growth. Lastly, it provides strategic recommendations for new entrants and established companies to navigate the complexities of the market.
Future Outlook
- The increasing digitization of industries in Indonesia will drive the rapid growth of data centers, fueling demand for efficient cooling systems to manage rising heat loads.
- With growing concerns over energy consumption and sustainability, data center operators will increasingly adopt energy-efficient cooling technologies like liquid cooling and hybrid systems.
- Government initiatives focused on improving digital infrastructure and expanding internet access will support the growth of new data centers across emerging regions, increasing demand for advanced cooling solutions.
- As data centers become more densely packed and generate more heat, the adoption of liquid cooling technologies is expected to rise due to their superior performance in high-density environments.
- Sustainability will remain a key focus for data center operators, driving the adoption of green cooling solutions that reduce carbon footprints and meet environmental regulations.
- The demand for modular cooling systems will grow as data centers seek flexible and scalable cooling solutions that can adapt to their changing needs and reduce operational costs.
- The market will see increasing integration of smart cooling technologies that use AI and machine learning to optimize cooling performance, reduce energy use, and enhance system reliability.
- While Jakarta remains the hub for data centers, emerging regions such as Sumatra, Sulawesi, and Kalimantan will witness growth, requiring tailored cooling solutions to meet regional infrastructure challenges.
- Global companies will continue to invest in Indonesia’s data center cooling market, introducing advanced technologies and solutions to cater to the growing demand for efficient cooling systems.
- As cooling systems become more complex, the need for reliable maintenance and support services will grow, providing opportunities for service providers to enhance system longevity and operational efficiency.