Amazon plans to invest $944m to unveil cloud services in Indonesia

E-commerce giant Amazon is reportedly planning to invest $944 million over a period of 10 years to launch its cloud computing division Amazon Web Services in Indonesia, stated Finance Minister, Sri Mulyani Indrawati. As per trusted sources, the company’s proposal had been conveyed by Werner Vogels, Vice President of Amazon, to Indonesia’s President Joko Widodo on two occasions.

After the discussions with Amazon, President Widodo had requested Indrawati’s ministry to arrange incentives to bolster the planned investment. Meanwhile, Indrawati had also mentioned that she would ensure the firm complied with Indonesia’s tax and regulations.

A news release by Tech In Asia states that Indonesian startups currently using AWS are efficiently transferring data out of the country, which indicates that they may face conflicts with regulations that require companies to have local data centers.

According to sources familiar with the development, the company is planning to roll out a cloud computing business in Southeast Asia’s largest market to compete against global rival Alibaba. Its cloud computing division, Alibaba Cloud has already launched a data center in Indonesia in March.

Alibaba’s data center is reportedly the first global public cloud platform in Indonesia, which will offer a comprehensive suite of cloud products and services right from elastic computing, networking, database service, middleware, security to analytics and big data.

If Amazon later chooses to launch its core e-commerce business, Alibaba would still be its main rival. Moreover, the Chinese internet giant is the primary backer of Indonesia’s e-commerce major Tokopedia. Other foreign organizations within the Indonesian e-commerce space comprise of China’s Tencent, which owns a 36 percent stake in New York-listed Sea Ltd that owns e-commerce firm Shoppe Indonesia and Chinese e-commerce company

For the record, Amazon has been planning to invest in Indonesia since 2016 and had set aside around $600 million to expand in the Indonesian market in the first year, stated sources.