Data centres of Malaysia: United at last?

Facebook is only one example of a largely popular Internet service. But what does it take for this global social media player to keep running day in, day out to serve its over one billion users all over the world?

A mind-boggling number of things happen in the background, but one of the bigger parts that ties it all together to make it all happen, has to be the data centre.

MDEC Head of Data and Cloud for the Digital Enablement cluster, Tan Tze Meng observed, “Every company providing Internet services have a giant data centre somewhere which is connected by miles and miles of optic fibre.”

And all of this further powers a nation’s economy, a fact that MDEC is very cognisant of, given that it is mandated to drive digital innovation ecosystems and ultimately create jobs, increase export sales and contribute to the GDP.

Tan Tze Meng

MDEC views Internet services as a huge opportunity for Malaysia’s own local start up ecosystem, in line with its mandate to thrive local digital innovation, and produce our own Facebooks and LinkedIns.

Activities like e-business incubation would have the most significant indirect data centre economy impact, according to Tan. In essence, this type of incubation would enable Malaysian startups to put their businesses online and expand beyond local borders.

The landscape

Another US-based company that is causing more waves in Malaysia and which local data centre players are actually viewing as more of a threat is Amazon Web Services (AWS).

The general feeling is that MDEC’s incentives for foreign players like AWS give them an unfair advantage over local data centre players.

Here is where objectives may clash, as MDEC is mandated to drive investments and catalyse digital innovation ecosystems, while local players have a bottom line to think about.

But, having a big player like AWS set up shop in Malaysia is a huge boost for Malaysia in terms of foreign investment as well as knowledge and experience transfer, which inadvertently goes a long way in upskilling our own pool of local talent in this particular industry.

A source close to the matter has revealed that we are in need of, at the very least, cloud computing skills and know-how. “Just selling virtual server resources, is not cloud computing,” he revealed.

So, a proper cloud computing platform with functions like on-demand metering and ability to scale up and scale down computing resources at will, would be a huge boost for local e-businesses.

Tan observed, “Startups will find AWS attractive” while MDEC’s Director of Digital Enablement, Wan Murdani pointed out, “Malaysia has no capability yet to offer a one-stop shop of AWS-like services. It does not have full capability to build a startup ecosystem (by itself).”

In other words, no local player has an aggregation of all the services that startups are looking for and which AWS and other foreign cloud computing giants like Microsoft and VMware are more ready to offer.

At first glance, it would seem that local players are being pitted against bigger foreign players. This was very much the perception that the industry had.

But according to Wan Murdani local DC players have an important role to play. 

This is only one of some other ways that local players can actually work with foreign data centres, and complement their offerings.

A hyperscaler eyeing Malaysia?

Malaysia has been courting foreign data centre players for a long time.

President of Asia Markets for Vertiv, Anand Sanghi, has predicted that a large hyperscale data centre player will invest in Malaysia in the next few years.

In fact, other foreign DC players eyeing Malaysia would likely start with a co-location space and then evolve from there.

Anand said, “These players would be concerned about service level agreements but Vertiv has visibility into this (information). Vertiv, formerly Emerson Network Power, is a critical power systems and thermal management solutions provider that was established in Malaysia over 30 years ago.

“A large co-location or hyperscale data centre presence has potential to raise GDP of a country by 2 to 4 percentage points,” Anand added.