Chinese internet conglomerate Tencent Holdings is raising the stakes in the race against global competitors for the burgeoning cloud services market in Asia, with a plan to open two data centres in Indonesia by the end of this year.

China's Tencent Cloud has launched its first data centre in Indonesia to take advantage of one of the fastest growing public cloud markets in the Asia Pacific region.

According to the Boston Consulting Group, the Indonesian public cloud segment has a compound annual growth rate of 25%, and is expected to increase its value to $800 million by 2023.

“Indonesia has a large internet demographic dividend with a fast-growing mobile internet market. We are very pleased to launch our first IDC here to help maximiSe the cloud computing potential in this country, ” said Tencent Cloud International senior vice president Poshu Yeung.

Tencent operates 20 data centers outside of China, with the launch of the first batch in Europe and the United States. But amid rising political tensions between China and Western countries, Yong said the company plans to add 30 to 50 percent of its data centers by the end of this year, mostly in the Asian region.

In order to cater to the surging demand for online services, big technology companies such as Alphabet’s Google, Facebook, Amazon and Microsoft, as well as China ecommerce company Alibaba Group Holding, are racing to build data centres to monetise opportunities in the digital transformation of Asia. Investment in data centres in Asia-Pacific quadrupled to $2.2bn last year from 2019, according to property consultant CBRE.

Alibaba Cloud plans to open a third data centre in Indonesia this year, Microsoft Azure has announced plans to establish its first data centre but at an unspecified time and Amazon Web Services (AWS) recently launched its first edge location in Jakarta with plans for an infrastructure “region” in Jakarta by 2022 at the latest.

The new data center, located in the central business district of Jakarta, will support various industries including financial services, e-commerce, entertainment, games and education. On-premises cloud infrastructure rules help reduce delays in data processing, enabling enterprises to launch services that are more competitive than those using external cloud facilities.

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