Will Data Center Regulations Force Facilities to Indonesia?

January 23, 2014

"Tech giants like Google and Yahoo could soon be on the hook for an on-the-ground data center presence in Indonesia, but not due to their own desire for expansion.

For the past several years, the Indonesian government has threatened to require electronic information providers with Indonesian users to establish a local data center presence in the country, according to the Asia Sentinel. It is just one of at least 13 countries that have expressed the opinion that global search engines should establish a physical connection to the countries with residents that rely on them for Internet activity. The U.S. and European Union continue to oppose measures of this sort, and the potential trickle-down effects of a move to force the hand of the world's tech giants could have a significant impact on the development of global data center outsourcingand networking decisions.

Like several other countries considering such measures, Indonesia has expressed concern about the multinational activities of enterprises impacting national commerce and business operations, according to the news source. While technology companies are included in this concern, potential retaliation is not limited to the IT industry - recently, the government threatened to impose fines on multinational mining companies that ship ore without processing it in local smelters. The Technology and Information Ministry's bill, which is likely to be voted on as soon as February, would also theoretically apply to companies in any industry that utilizes IT services, including banks, airlines and hotels.

However, Nonot Harsono, a member of the Indonesian Telecommunications Regulatory Authority, released a statement saying that he did not think such a measure would compel tech companies to establish data centers in the country, but many remained concerned over the potential implications of forcing companies to build expensive data centers in certain places.

Business Roundtable, a U.S.-based association of corporate chief executive officers, responded by saying that enforced data centers would slow technological innovation and hamper the development and deployment of new products and services.

Potential Fallout for International Computing
While several companies have concentrated data center construction efforts in the region over the last several years - including Google, which opened facilities in Singapore and Taiwan in 2013 - enforced data center builds would likely cause companies to either change course in their expansion efforts or abandon service. Whether a tech giant would consider scrapping its services to a country demanding a data center remains to be seen - it is likely that many of the targeted companies would be able to avoid building facilities while still enjoying user access. It is, however, an interesting and potentially pivotal point in the development of multinational IT and global connectivity."



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    "Tech giants like Google and Yahoo could soon be on the hook for an on-the-ground data center presence in Indonesia, but not due to their own desire for expansion. For the past several years, the Indonesian government has threatened to require electronic information providers with Indonesian users to establish a ...