Friday 29 Mar 2024
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This article first appeared in Digital Edge, The Edge Malaysia Weekly on May 24, 2021 - May 30, 2021

“In a country of 32.7 million, why isn’t there a single unicorn?”

This question has been raised, discussed and dissected for years, and it is still a hotly debated topic whenever Grab, the regional super app with unicorn status, is mentioned.

A unicorn is a privately owned business that is valued at more than US$1 billion (RM4.1 billion).

Although the prospects may seem dim at times, it is still every entrepreneur’s dream to build one. And Huawei Technologies (Malaysia) Sdn Bhd aspires to be the one to spot the next unicorn out of the thousands of start-ups in existence, shares Lim Chee Siong, the company’s vice-president of cloud and artificial intelligence (AI) business group.

“The digital economy is the new driver of development, and digital technologies are needed to drive economic growth in Malaysia. There is a need for innovation and better revenue streams. Only then can Malaysia garner the attention needed to create an environment suitable for the creation of unicorns.

“Grab is a unicorn because it is a super app, one with many subscribers and one that consumers almost cannot do without. That is why all the money and attention are focused on companies like that.

“Without such companies, Malaysia is losing its edge because there isn’t much that is drawing attention and traffic. Traffic translates into more marketing and advertising, which are all now going to the top super apps,” says Lim. 

"There is a need for innovation and better revenue streams. Only then can Malaysia garner the attention needed to create an environment suitable for the creation of unicorns.” - Lim

The solution, he says, is to build a cloud-native unicorn, which is able to bring new ideas to market faster and respond sooner to customer demands. This is because cloud-native companies have little need of physical assets. And as their services are created and developed on the cloud, they are not restricted by geographical boundaries.

“We are looking for companies that offer ideas, services and products that you may not need now, but those with the potential of becoming mainstream in the next few years.

“You may not know you need this now, but it might become a necessity two years from now. Just look at the kind of services that have become a necessity since the coronavirus pandemic struck.

“This is why we expanded Huawei Spark to Malaysia last year and organised the competition in November,” says Lim.

On April 12, AI company Innov8tif emerged as champion in the competition with its OkayDoc platform — a set of computer vision algorithms that automates identity authentication and prevents fraud in e-KYC (electronic know your customer) through visual zone inspections, security feature detection and content tampering checks.

Health Digital Technologies Sdn Bhd’s telemedicine platform, DoctorOnCall, which delivers healthcare services such as online doctors, specialists, pharmacists, screenings and vaccines directly to users, came in second. Its services extend to AI doctors and 5G Internet of Things (IoT) Pods that aim to improve healthcare for the 650 million people in Southeast Asia.

TRB Ventures Sdn Bhd end-to-end property sales transaction platform MHUB came in third. The property technology is designed to speed up and simplify the property sales cycle by connecting developers, agents, banks, lawyers and buyers.

The companies were among the 10 finalists shortlisted from more than 140 entries. The other finalists included BookDoc, Boss Boleh, Fuhla, MSA — Mobile Sharing Assistant, OrangeFIN Asia, Orpheus Capital and SmartPeep.

The competition was organised in collaboration with the Malaysia Digital Economy Corporation (MDEC), TusStar (Malaysia) as incubator partner, and powered by TM ONE through its  Edge (pronounced Alpha Edge) cloud platform. TM ONE is the enterprise and public sector business solutions arm of Telekom Malaysia Bhd (TM).

The objective was to source and support some of the most promising deep-tech companies in Asia-Pacific in areas that Huawei is also heavily invested in, says Lim. These include 5G, AI and machine learning and analytics, IoT, edge computing and software-as-a-service (SaaS) applications.

“These are the areas that are growing tremendously,” he adds.

Huawei’s objective to play a part in the Malaysian start-up ecosystem stems from its longstanding business in the country’s telecommunications industry, explains Lim.

Unlike the major cloud providers such as Amazon Web Services, Microsoft Azure and Google Cloud Platform, Huawei achieved significant presence as a white-label delivery partner in Malaysia. 

The company has been working with TM for decades, supporting the latter in various development and service expansions.

TM ONE, TM’s business-to-business arm, had last July inked an agreement to collaborate with Huawei to enable next-generation innovations such as data analytics and robotic process automation for customers via TM Cloud (Cloud Alpha) services. At the time, TM ONE had said cloud offerings were expected to grow at a compound average growth rate of 27% over five years.

While TM owns and operates the data centres, Huawei provides the necessary back-end support, says Lim. 

“We have been able to develop our cloud business by enabling local partners. We are the only hyperscale data provider to do this. We work with Orange in France, Deutsche Telekom in Germany, China Telecom in China, SberBank in Russia and G42 in the Middle East. 

“In Singapore, Thailand and Hong Kong, we also sell our services using our own brand,” he says. 

The venture puts Huawei at a great advantage, as it is able to keep the costs low. “Our cost structure can be insanely low, because we provide the hardware and the software,” Lim says.

TM too benefits from the partnership as local data is stored locally — an option which Amazon, Microsoft and Google are unable to provide as these entities do not have local data storage centres.

“This is important because if your data is in another country, you are bound by that country’s laws, which gives foreign law enforcement the power to access your data.

“This is especially important as the US, in 2018, passed the Clarifying Lawful Overseas Use of Data (CLOUD) Act, which gives the country’s law enforcement authorities the power to request data stored by most major cloud providers, even if it is outside the US,” he says.

"The business of cloud is very different from other areas of business. We are providing the platform, so that our platform can grow with the company that is growing on it.” - Chye (Photo by Mohd Izwan Mohd Nazam/The Edge

Growing together

However, unlike most accelerators, which offer training and consultancy services for start-ups, in exchange for money or equity, Huawei’s proposition comes in the form of cloud credits and opportunities that can open the door to connections that may lead to additional funding offers.

Innov8tif, for example, won a six-month-long Accelerator Programme participation, which includes US$125,000 worth of cloud credits, the opportunity to participate in the Spark Fire programme, and one-on-one mentoring and networking opportunities.

DoctorOnCall and MHUB too got to participate in the six-month-long Accelerator Programme, which includes US$80,000 in cloud credits and one-on-one mentoring opportunities, as well as other perks.

The accelerator chose this route as it would help both parties “grow together”, says Chye Connsynn, director of strategic collaborations at Huawei Cloud Malaysia.

“The business of cloud is very different from other areas of business. We are providing the platform, so that our platform can grow with the company that is growing on it. The better a company’s growth, the bigger and better we become.

“Malaysia is a good place to test out new technologies. If your business thrives in this country, you can practically roll it out in any other region without much trouble because of Asia’s cultural and racial diversity,” she says.

Chye adds that the start-ups also have the opportunity to leverage Huawei’s partnerships in China and globally.

“You may be running a company that relies heavily on on-premise data storage systems. This limits your expansion overseas. But with cloud technology, all you need to do is get onto the cloud and start working on transferring the data, as the architecture is the same. All you have to do is replicate the node used locally in China and you will have your systems up and running the next day.

“This way, they can grow their business on our platform, and in return, we go to market with them. For example, if their technology has to do with financial institutions, we will be able to make the necessary introductions because Huawei has partners that are banks,” she says.

Lim adds that they decided to take this route as companies that are cloud natives spend 80% of their capital on operating expenses.

“Huawei Spark is just one way of attracting start-ups. We have other channels to work with partners. We want to onboard more partners, regardless of their size. Not all start-ups want to or can participate in competitions. 

“This is why we have the standard Cloud Partner programme, where we encourage start-ups to register and we will approach them,” he says.

Spice producer Hexa Food Sdn Bhd is one such company. It worked with Huawei to build a computer vision system that can detect products that do not meet specifications.

“A food manufacturer becomes a technology company by rolling out IoT capabilities instead of relying on manual checking, inspection and data collection for quality control,” says Lim.

Huawei is also working with an animal farm in Johor to monitor the slaughtering process to ensure that it meets halal standards. “We worked with them to develop smart cameras to make sure that the workers slaughter chicken properly, and sort and pack them accordingly,” says Lim.

This may be the opportunity for Huawei to explore verticals such as agriculture, healthcare and education, he adds.

“Contributions to these areas are more meaningful, so we might work with the government to see how we can support them. The market size for these areas may not be as big, but they are beneficial to the people. So we might consider start-ups working in these segments in the future,” says Lim.                                                                                                                        

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