W.Media organized Malaysia Cloud & Datacenter Digital Summit, this month. The virtual event brought together over 200 IT (Information Technology), cloud and DC (Datacenter) business leaders, who discussed the future of the cloud, datacenter, 5G, IoT (Internet of things) in South East Asia, particularly Malaysia.

This article has been penned down by Sabarinathan Sampath, who was a speaker at this event. He shared insights on the datacenter growth in Malaysia, and how cloud and digital infrastructure play a key role in driving this growth. Read on.

Datacenter growth in Malaysia : an overview

“Digital infra and cloud to be the drivers of datacenter growth in Malaysia” – Sabarinathan Sampath, SVP & COO, ZNet 1

We all understand that organizations of the future should be digital by default.  As we all converge towards a digital era, there will be a lot of investment across the globe around various applications of digital infrastructure like smart cities, smart healthcare, smart retail, smart transportation and more.

But, without high speed networks and highly secure, reliable data centres, there can be no digitalization – for company of any size.

As per a report by Cushman and Wakefield, the Southeast Asia (SEA) region including Singapore, Indonesia and Malaysia will be the fastest growing region for co-location data centres over the next five years, with its market size expanding by a compounded annual growth rate (CAGR) of 13 per cent between 2019 and 2024.

“Digital infra and cloud to be the drivers of datacenter growth in Malaysia” – Sabarinathan Sampath, SVP & COO, ZNet 2

This trend is reinforced by:

  • the rapid pace of digitalization
  • tightening focus on data locality
  • and surge in demand for cloud-based services across the region, which prompted big corporates such as Google, Alibaba Group, Amazon Web Services (AWS) to expand their cloud infrastructure footprint in Malaysia.

In the last decade, an enormous amount of effort has been dedicated to scaling up digital capacity worldwide, including Malaysia. The number of machines has gone up from a few million to several billion.

So, let’s first discuss – what is Digital Infrastructure?

Digital Infrastructure or DI is the physical medium, the infra through which the traffic generated by the internet flows. This includes everything from telephone wires, cables (including optic fiber and submarine cables) to microwaves, satellites, and mobile technology such as fifth-generation (5G) mobile networks, IoT, and servers as well. Server-side, major companies like Amazon or Microsoft stepped in to build and provide this growing digital infrastructure —known as “the cloud”. Besides cables, cloud, and other things mentioned above, the data centers (hardware and software) and their administration is also a part of digital infrastructure work.

Automation tools that help to fasten the business transformation by way of using latest technologies; Application Programming Interfaces (APIs) which help to ensure that devices communicate with each other abstracting the business logic under them also form part of the digital infrastructure.

“Digital infra and cloud to be the drivers of datacenter growth in Malaysia” – Sabarinathan Sampath, SVP & COO, ZNet 3

So, DI encompasses everything that makes a business agile, increases customer engagement and loyalty, and improves user experience.

There are a number of benefits that DI brings to the table:

  • It provides optimally priced, reliable and high capacity internet for everyone – residents and businesses. This helps them to access online services and stay relevant in today’s digital economy.
  • Digital Infrastructure plays a great role in improving the access of the masses to quality education and health care. Also, it helps improve public safety and emergency responses.
  • In Malaysia, digital infrastructure development will successfully enable Smart Community Services for local residents and businesses. This will help create exciting opportunities to enhance the local revenue base.
  • And last, but not the least, Digital Infrastructure, will help new business startups to see paced economic growth and expansion of workforce opportunities.

Digital Infrastructure growth fuelled by cloud, edge computing, Internet of Things (IoT), digital content generation, and Big Data is the staple that will take the Malaysian datacenter business to new and greater heights.

Malaysia – on the fast lane to cloud adoption

Malaysia is one of the countries across the globe that’s most rapidly adopting cloud computing. Not only the private sector, but the government is also aiming to accelerate cloud adoption in the region.

Let’s dive into the details.

These are just few statistics here, but Malaysia is taking huge strides in the cloud, ICT, 5G and more to enable digital transformation initiatives to make Malaysia a highly productive and operationally efficient country.   

  • Asia Cloud Computing Association’s Asia Readiness Index 2020 ranks Malaysia at eighth position out of 14 Asian nations in Cloud Readiness Index.
  • Information and Communication Technology (ICT) market in Malaysia is set to grow at an approximate CAGR of 9% between 2019 and 2023, as per a report by opengovasia.com
  • As mentioned before, not only is the private sector receptive to cloud adoption but the government is taking a pro-cloud stance with ‘Cloud First’ strategy.
  • There have been improvements in parameters, like connectivity, energy sustainability, business sophistication, data centre risk and more. 
  • Infact, as per another report, 5G will enable upto MYR 16 billion (USD 3.8 billion) revenue opportunity for service providers in Malaysia by 2030.

Since the introduction of “Smart Cities Initiatives” as part of its 11th Malaysia Plan (2016-2020), the country is deploying an intelligent IoT network in populated cities to test out urban management solutions in optimizing cities infrastructure and connectivity and enhancing the liveability for the citizens.

It is also set to adopt 5G technology in the near future (by 2022, and shut down 3G by 2021) — plans are afoot to develop a holistic strategy for 5G deployment in areas such as health care, media and entertainment, automotive, manufacturing, public safety, agriculture and education.

The rise of 5G in Malaysia will also mean a boom in cloud services. So, by highlighting all these points, I would like to stress the fact that increased adoption of cloud and advanced technologies by both – public and the private sector will lead to increased investment in IT infrastructures like data centers, servers, storage, and more.

Examples of proactive cloud adoption by the Malaysian Government

I’d like to mention a few innovative projects that show proactive cloud adoption by the government itself in Malaysia:

Data exchange hub: Malaysian Government’s Central Data Exchange (MyGDX) is a data sharing platform that serves as a centralized platform that provides data brokerage services and enables streamlined data sharing across government agencies. It improves the performance of government service delivery by reducing time for data input, validation and processing.  

MyIdentity platform: myIDENTITY allows citizens and permanent residents to access personal information and to update contact information when dealing online with government agencies.myIDENTITY transforms the delivery of government services to a more strategic, effective and efficient system. Government agencies can access, update and share customer’s personal information via a centralised repository.

Smart City projects: As discussed before, Malaysia has prioritized initiatives to encourage the development of smart cities that encompass a broad range of digital transformation activities, including government services, education, and transportation.

Malaysia has recently revealed the groundwork for its next smart city project in Johor. The city will be developing its use of Internet of Things (IoT), artificial intelligence, big data, advanced analytics, autonomous vehicles, and 5G technology. The project laid out for Johor is in line with the 12th Malaysia Plan 2021-2025, which focuses on economic empowerment, environmental sustainability, and social re-engineering.

Previously, two other states, Sabah and Sarawak, have been promoting consistent smart city efforts by improving their public services and management systems using digital solutions.

100 Go Digital: 100 Go Digital is an initiative by the Malaysia Digital Economy Corporation (MDEC), under the Ministry of Communications and Multimedia Malaysia (KKMM), to enable traditional Malaysia businesses in key sectors move towards digitalisation, improving efficiency and customer experience.

Such increasing cloud initiatives by the government offer many opportunities for data center growth in Malaysia.

Programs & policies to drive cloud adoption across Malaysia

Though the efforts are being made for speedy adoption of cloud in Malaysia, there are certain hindrances that have been experienced by all countries in cloud adoption like low skills in the field, insufficient infrastructure, traditional mindset and perceived security risks.

“Digital infra and cloud to be the drivers of datacenter growth in Malaysia” – Sabarinathan Sampath, SVP & COO, ZNet 4

However, Malaysian government and policymakers have initiated and implemented commendable programs and policies to promote the use of cloud computing.

Again, mentioning only few here:

  • In February 2020, the Department of Personal Data Protection (JPDP), an agency under the Ministry of Communications and Multimedia (KKMM), released proposed amendments to the country’s Personal Data Protection Act for comments.
  • In October 2019, the government announced the National Fiberisation and Connectivity Plan (NFCP), providing nationwide high-speed digital connectivity over the next five years.
  • In October 2019, the government announced the creation of a multi-stakeholder National Digital Inclusion Council (NDIC) to create digital economy income opportunities.
  • In October 2019, the government presented Budget 2020, with one of four main objectives being to grow Malaysia’s digital economy in a shared and inclusive manner.
  • In March 2019, the Netpreneur Training Programme was launched to enable Malaysian SMEs to embrace digital innovation and benefit from globalisation.
  • In October 2018, the government announced its Fourth Industrial Revolution Policy Framework to accelerate the adoption of AI and IoT in the manufacturing sector.
  • In April 2018, the Digital Transformation Acceleration Programme (DTAP) was launched to provide companies with a structured approach to the adoption of digital technologies.

All this growth in cloud, data centre and data centre infrastructure management systems etc. create operational complexities. Here, automating infrastructure management and service delivery can help organizations in Malaysia a lot.

You can get in touch with me at sabari@racknap.com to discuss on this write-up.

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