Amazon to invest $944m to launch cloud computing services in Indonesia

Amazon boxes are seen stacked for delivery in Manhattan, New York, U.S., January 29, 2016. REUTERS/Mike Segar/Files

US-based e-commerce giant Amazon plans to invest Rp 14 trillion ($944 million) in Indonesia to launch its cloud computing arm, Amazon Web Services (AWS), into the country, according to Finance Minister Sri Mulyani Indrawati.

Speaking to local reporters recently, Indrawati said the plan had been conveyed by Amazon vice-president Werner Vogels to Indonesia president Joko Widodo on two occasions.

“Amazon met with (Indonesian President) Joko Widodo both in Hanoi and again today and conveyed its interest in Indonesia,” Indrawati said, as quoted by local media.

The investment, she added, will be spread over a 10-year period.

Following the talks with Amazon, President Widodo has asked Indrawati’s ministry to set up incentives to support the planned investment. The minister, meanwhile, had earlier also said that she would make sure Amazon was willing to comply with the country’s tax and regulations.

By rolling out a cloud computing business in Southeast Asia’s largest market, Amazon will go head to head with its global rival Alibaba whose cloud computing arm, Alibaba Cloud, launched a data centre in Indonesia in March.

The Alibaba data centre, which is the first global public cloud platform in the country, will offer a comprehensive suite of cloud products and services ranging from elastic computing, database service, networking, security and middleware to analytics and big data.

Should Amazon later decide to introduce its core business of e-commerce, Alibaba would again be the one to beat. The Chinese internet giant is the main backer of Indonesian e-commerce unicorn Tokopedia.

Other foreign powers in the Indonesian e-commerce space include China’s Tencent, which holds a 36 per cent stake in New York-listed Sea Ltd., the owner of e-commerce firm Shopee Indonesia; and Chinese e-commerce company, which has its own subsidiary in the country.

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