Malaysia’s data centre industry conundrum

With Microsoft Corporation having more or less signed on the dotted line, a Microsoft data centre is set to come to our shores, or more specifically Johor, Malaysia.

AIMS Data Centre’s CEO, Chiew Kok Hin, observed that in the time before that happens, local cloud service providers or value-added resellers (VARS), become a good ‘conduit’ of sorts for Microsoft to make their data centre offerings felt in the market.

“But it is only a temporary measure,” he cautioned.

Chiew Kok Hin

Chiew Kok Hin

“Now, they need presence here, they need to build a business case, the only way to do that is through the reseller channel,” opined Chiew.

AIM itself has never emphasised reselling products so much, focusing on offering data centre services like neutral carrier options, carrier management, disaster recovery, availability solutions, active monitoring and more.

According to Chiew, “Being a reseller is always a risky business. You need to have your own intellectual property (IP) and independence. When your entire business case is upon reselling someone else’s product, basically that someone is holding you by the balls. Metaphorically speaking.”

History repeating itself

He called to attention, the big tech vendors like Sun, Oracle, HP.

“They used to have resellers and distributors, right? Look what happened after that…Now they go directly to the market and the ‘resellers’ who used to carry their products, are now gone,” Chiew reminisced.

In his view, once resellers ‘help’ big MNC tech vendors establish presence and in install base in the local market, and with economies of scale, they would technically ‘be cut loose.’

This isn’t to mean that resellers are a dying breed. In the local market, the reseller ecosystem is active and still thriving. “If you look at the market, there are certain segments where they are relevant,” observed Chiew, who also added, “But why do you want to engage channels and pay them? The margins become thinner. So, I think local VARs are a temporary measure (for Microsoft).”

The current scenario is that tech vendors leverage local VARS’ expertise to deploy and implement solutions. But with the advent of cloud computing, things are going to become, if they haven’t already, much simpler.

“All that is required most of the time, is a few mouse clicks. It’s not like the days of the mainframe, where workloads, servers and IT services were much more challenging to deploy,” Chiew said.

Essentially, with cloud computing technology and players like Amazon Web Services trailblazing a path for the technology, the economies of scale that the cloud can offer should be allowed to bear fruition for technology vendors that leverage them.

“So with cloud, if Amazon can do it, why can’t Microsoft’s Azure leapfrog (to where Amazon is now)?

This is something that maybe Microsoft’s VARs partner ecosystem is not looking forward to. But it’s a tantalising future for Microsoft and its customers in Malaysia, which is being held hostage by Microsoft Corp’s indecisiveness about when/how to build a data centre in Johor.






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