Data centre infrastructure to bolster country’s digital economy - MIDA | Malaysian Investment Development Authority
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Data centre infrastructure to bolster country’s digital economy

Data centre infrastructure to bolster country’s digital economy

07 Jul 2021

The evolution of economic activity and technology offers enormous challenges and an opportunity for data centres

The establishment of data centre hubs and cloud service providers will continue to be the driving force behind the rise of the country’s digital economy, according to AIMS Data Centre CEO Chiew Kok Hin.

He said businesses that have gone digital or invested more heavily to digitalise their businesses and processes, are unlikely to go back to the “brick and mortar” way of doing things.

Therefore, he added, demand for data centres will continue to grow, directly or indirectly, as South-East Asia has been the focus for its emerging data centre market for the past few years.

“With the slowly maturing business environment, technology and resources, local businesses and global players are flooding the market with tremendous technological demand.

“Data centre infrastructure has been the driving force in the rise of the digital economy. This was very apparent in 2020 when cloud computing technology enabled the nation to persevere and adapt to the new normal during the Covid-19 pandemic.

“This trend will continue well into and past 2021,” he told The Malaysian Reserve in an email interview recently.

Chiew noted that the evolution of economic activity and technology offers enormous challenges and an opportunity for data centres as digital infrastructures will be central to this transition.

Chiew said the Covid-19 pandemic-driven information technology (IT) modernisation is a continuation of the enterprise shift from on-premise legacy IT platforms and systems to more agile cloud technologies in third-party data centres.

He added that postponing IT transformation projects isn’t an option as companies adjust their IT roadmaps to compete in a shifting business landscape.

“The pandemic has placed an emphasis on flexibility, which will accelerate the ongoing shift to new architectures and software-defined, programmable Infrastructures.

“All of this adds up to a massive surge in demand for data centres and cloud infrastructure to be bigger, faster, ready-to-scale and available everywhere,” he added.

Commenting on how the data centre industry is paving the way for modern businesses, Chiew said Malaysia’s digitalisation efforts had accelerated more than expected ever since the Covid-19 outbreak followed by the Movement Control Order in March 2020.

He emphasised consumers and businesses, especially small and medium enterprises, have swiftly moved most of their business operations online as part of their mitigation plan against restrictions imposed in curbing the spread of Covid-19.

“We predict this shift will likely become a permanent means of conducting business due to its advantage of being convenient and efficient.

“Given the current circumstances, the Internet has become an essential service to facilitate the shift to remote working, increase in online buying behaviour and online learning. This surge in demand for connectivity is straining networks, stretching the limits of VPNs (virtual private networks) and increasing the need for collaboration tools.

“As a result, it has elevated the importance of data centres as well as cloud computing,” he added.

Chiew said as the cloud is deemed a solution for everything from cost management to performance, flexibility, durability and simplicity, the digital transformation roadmap during this pandemic has amplified the demand for effective cloud computing solutions from data centres.

He also expects investments in IT infrastructure will continue and expand as the data centre industry strives to deliver more secure, reliable and efficient infrastructure and solutions to secure sustainable recovery paths and keep up with the accelerated digital transformation efforts.

“As the world makes this online and cloud migration more permanent, AIMS anticipates widespread acceptance of the data centre as a digital economy hub, supporting increased reliance on telemedicine and health, enhanced e-commerce and global telecommunications and mass media,” he noted.

AIMS is an industry leader in data centre operations, in which businesses have the opportunity to connect with their partners, users and employees via AIMS’ interconnected ecosystem of data centres across South-East Asia.

According to a report by GlobeNewswire, Malaysia’s data centre market size will attract investments of US$1.4 billion (RM5.8 billion) by 2026.

It stated that the country’s information and communications technology market witnessed spending of around US$17 billion (RM70.5 billion) in 2020, which is expected to grow around 3% to 5% year-on-year, with increased digitalisation of enterprise business environments.

The government aims to achieve 50% cloud adoption in cloud data centres in Malaysia by 2024. In April this year, Microsoft Corp announced it will launch the first data centre region in Malaysia, followed by Amazon Web Services and Google LLC which have plans to establish cloud regions in Malaysia.

Malaysia has plans to develop the next smart city project in Johor, which is being developed with Internet of Things, artificial intelligence, big data, 5G technology and autonomous vehicles.

The soon-to-be implemented 5G network in the country is expected to boost the digital economy and increase the demand for high bandwidth networking infrastructure.

Source: The Malaysian Reserve