Data Centers in Medan
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Medan – Strategic Gateway to Western Indonesia
Medan serves as a primary digital gateway for Sumatra and the strategic Strait of Malacca. It is an essential market for businesses requiring low-latency colocation to serve Western Indonesia's growing economic and population centers, reducing reliance on distant Jakarta hubs and improving application performance for millions of end-users.
Medan: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong regional connectivity, though fewer international links than Jakarta. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access requires private connectivity to the nearest hubs in Singapore or Jakarta. |
| Power Cost | IDR 1,550.00-1,700.00/kWh | Industrial power costs are influenced by a heavy reliance on fossil fuels. |
| Disaster Risk | High (7.4/10) | Significant exposure to seismic, tsunami, and flood events requires careful site selection. |
| Tax Incentives | Yes | DC-specific concessions and exemptions are available for facilities in designated zones. |
| Sales Tax | 12% VAT | Standard national value-added tax as of September 2025. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Medan's connectivity ecosystem is developing, with a focus on national and regional providers. While not as dense as Jakarta, the market offers access to all major Indonesian carriers. As of September 2025, there are two colocation data centers available.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps located within Medan as of September 2025. Businesses requiring dedicated cloud access must establish private network interconnects (PNI) or wavelength services to major cloud hubs in either Jakarta or, more commonly, Singapore for lower latency to global services.
Internet Exchange Points (IXPs): Peering is primarily handled through private arrangements or routed via the Indonesia Internet Exchange (IIX) in Jakarta. The lack of a major public IXP in Medan means traffic is often routed through the capital, impacting local latency.
Bare Metal: Bare metal server options are available in Medan, typically through national providers. For global provider options, such as Hivelocity or phoenixNAP, deployment in the nearest major hubs of Singapore or Jakarta is the standard approach.
Power Analysis
Average Cost Of Power: Industrial electricity pricing in Medan averages between IDR 1,550.00–1,700.00/kWh as of September 2025. The national grid's reliance on fossil fuels (approximately 81%) keeps costs variable, directly impacting operational expenditures for high-density deployments.
Power Grid Reliability: The power grid serving key commercial areas in Medan is generally stable, but facilities outside these zones may experience greater fluctuations. Data centers in the region are built with extensive N+1 or 2N UPS systems and multiple backup generators to ensure continuous uptime.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Medan are positioned to serve the city's primary commercial and industrial zones. This proximity provides low-latency connectivity for the region's significant agricultural, trade, and manufacturing sectors centered around the Port of Belawan, one of Indonesia's busiest ports.
Regional Market Reach: Medan is the critical digital hub for the island of Sumatra, which has a population of over 60 million. Deploying infrastructure here allows companies to effectively serve users across Western Indonesia and parts of Malaysia with significantly better performance than backhauling traffic to Jakarta.
Tax Advantage For Data Centers: Indonesia provides tax incentives for data centers operating within designated Special Economic Zones (SEZs). These benefits can include relief from certain taxes and regulatory concessions, making investment in local digital infrastructure more financially attractive.
Natural Disaster Risk
Medan has a High-risk profile for natural disasters, with an overall INFORM Risk score of 4.5 and a Natural Hazard score of 7.4 out of 10, as of September 2025. The risk landscape demands that data centers are engineered with stringent structural and operational safeguards.
Key risks include:
- Tsunami: Score 9.3
- Earthquake: Score 8.9
- River Flood: Score 8.4
- Coastal Flood: Score 8.1
- Epidemic: Score 7.4
