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.

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