This joint venture will give more Indonesian companies access to cloud computing

Internet Initiative Japan Inc (IIJ), one of Japan’s largest internet access and network solutions providers, announced this week that it had reached an agreement with Jakarta-based communications firm Biznet Networks (Biznet) to establish a joint venture in Indonesia. The project aims to build new cloud services infrastructure in the archipelago and offer public and private cloud services to local companies. The initiative is set to launch with US$6 million in capital (60 percent from Biznet and 40 percent from IIJ).

IIJ will provide the cloud technologies and operational support. Biznet brings a trusted local brand name to the table and is poised to run the day-to-day operations. IIJ and Biznet forecast that the venture will create annual revenue of around US$10 million after three years. The two companies plan to begin operations operations in December after completing procedures required by local authorities. The project’s trade name, headquarters, managing director, and other details will be decided by its two parent companies at a later date.

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IIJ has been strengthening its overseas cloud businesses in recent years. The group has penetrated the US, China, Europe, and Singapore. Biznet is a part of Indonesia’s MidPlaza Group, one of the nation’s largest holdings that runs enterprises related to property development, leisure, technology, and startups. Biznet owns thousands of kilometers of fiber-optic network, data centers, and cable TV infrastructure, which makes it a logical choice as a strategic local partner for IIJ. The two companies aim to gain a large share of the Indonesian cloud services market.

However, in April the IDC Indonesia (one of the nation’s largest carrier-neutral data centers) ran an analysis in The Jakarta Post, saying the archipelago still has a long way to go before cloud tech can significantly boost the collective organization of local enterprises. The author writes:

The very thought of relinquishing control to a third party scares many Indonesian enterprises, and IDC Indonesia has found that more than 40 percent of IT budgets are still parked aside for ‘on premise’ IT.