Firms based in Indonesia prefer to store data overseas. Many companies operating in Indonesia store their data overseas rather than in the country, as foreign cloud providers offer greater reliability.
Indonesian Cloud Computing Association (ACCI) secretary-general Fanky Christian said many companies opted for overseas data centers, as this provided them with faster internet connections and international standards, whereas building data storage onshore would require large investment.
“Using cloud services is much cheaper, as companies do not have to spend billions of rupiah to establish data centers [in Indonesia, which] would also require them to invest in capable human resources to manage the data centers,” Fanky told The Jakarta Post on Sunday.
Given this environment, the Communications and Information Ministry has canceled a plan to force private companies to store data onshore, as it seeks to ensure a favorable business climate for the burgeoning digital economy, according to the latest draft for the revision of Government Regulation (PP) No. 82/2012 on electronic system and transaction management.
The proposed revision only requires public institutions to store data onshore, while private firms like Google and Facebook can store their data overseas, with an obligation, however, to register with the Communications and Information Ministry, according to a ministry document seen by the Post.
The ACCI admitted that the government and local storage providers would have to improve the infrastructure and internet capabilities to get companies to store their data onshore.
“As of now, there are 20 local cloud providers in Indonesia that could provide the same services. We should enhance our internet traffic, so that many companies are willing to store their data in Indonesia,” Fanky said.
Many local providers, he added, had yet to fulfill international standards, such as on uptime and ITA942. Uptime is a system reliability indicator as to when a system is working, versus downtime, and ITA942 is the telecommunications infrastructure standards for data centers that include network architecture, electrical design, power management and environmental control.
Although acknowledging the limitations of local data center providers, the ACCI regretted the government’s move to cancel its plan to force private companies to store data onshore. Fanky argued that the country’s data security would be more susceptible to breaches occurring in other countries, as many companies were also “seeking and processing the data” from apps and electronic services, as in the case of the Cambridge Analytica data breach.
“The regulation would worsen the data center ecosystem in Indonesia,” he added.
The Communications and Information Ministry thinks the opposite. The ministry’s apps and information director general, Semuel Abrijani Pangerapan, sees no relationship between where the data is stored and data breaches and said the latest draft for the PP revision would create a positive business climate for tech companies that could in turn encourage them to build data centers here.
“Data will come closer to the users. Therefore, Indonesia needs to create a supportive ecosystem to encourage companies to place their data centers closer to Indonesian users,” Semuel told the Post in a recent interview. “We are seeing that several companies are now developing content delivery networks. We will provide ease in developing data centers.”
Tech giants from Google Cloud, Amazon Web Services (AWS) and Alibaba Cloud to Microsoft had expressed commitments to invest in cloud regions and data centers in Indonesia, he added.
Microsoft Asia regional director for corporate, external and legal affairs Sunny Park said there had been a lot of misunderstanding about what data localization actually was and why the government needed it.
“Data localization should look more upon who has access to it, instead of where the data is located,” she said at the Centre for Strategic and International Studies (CSIS) Global Dialogue in Jakarta on Monday.
Separately, United States technology giant IBM told the Post that building data storage onshore would require enormous investment, as the company would first consider market demand.
“We usually build cloud storage with 10,000 servers to accommodate the public. That means that we need to prepare the location and capacity before the public use our services,” said IBM Indonesia’s president director Tan Wijaya, adding that the company built data center that surpassed market demand to accommodate increasing user numbers.
Tan added that Singapore had become the hub for cloud services in Southeast Asia, with the company’s public cloud center located in that country. “The need for data centers in ASEAN is being consolidated in Singapore.”
Indonesian E-Commerce Association (idEA) chairman Ignatius Untung said many companies stored their data overseas because of system reliability.
“Foreign and local companies are storing their data abroad, because they receive better services and get better technology. Local players should catch up in terms of system reliability,” Ignatius told the Post over the phone.
Ignatius described the latest PP revision draft a win-win solution: “The regulation is realistic, as companies that store their data abroad cannot easily transfer their data onshore, as it would be a process of years.” Firms based in Indonesia prefer to store data overseas (awa/asp, The Jakarta Post)