This article first appeared in The Edge Malaysia Weekly on February 22, 2021 - February 28, 2021

THE Malaysia Digital Economy Blueprint plans to boost the growth of the cloud industry by adopting a cloud-first strategy in the public sector and appointing Cloud Service Providers (CSP) and Manage Service Providers (MSP) to build Malaysia’s capabilities in this area.

In the first phase (2021-2022) of the blueprint, the government aims to move towards a paperless environment and migrate 80% of public data to hybrid cloud systems by the end of 2022. With this cloud-first strategy, the government can engage in more effective data collection and management, resulting in lower information management costs in the long run, Prime Minister Tan Sri Muhyiddin Yassin said during the launch of the blueprint.

Additionally, cloud services enable the use of big data, artificial intelligence, Internet of Things and other applications to strengthen government services.

This initiative will create demand for cloud services in Malaysia and increase the confidence of foreign and local companies to invest in this space, says Adrian Lim, partner at Ernst & Young Advisory Services Sdn Bhd.

“[The use of] cloud [services] in Malaysia is still very nascent, so cloud companies will not invest in the country unless there is clarity of demand. The government is doing the right thing by making it very clear that there is demand and that it is committed to becoming one of the largest customers of cloud services,” says Lim.

The government has also given conditional approvals to four CSPs — Microsoft, Google, Amazon and Telekom Malaysia — to build and manage hyper-scale data centres and offer cloud services.

Over the next five years, these companies will invest between RM12 billion and RM15 billion to achieve those targets. This will result in increased data storage space, lower operating costs and more efficient analytical capabilities, said the prime minister.

K Raman, managing director of Microsoft Malaysia, is confident that the blueprint will pave the way for the greater usage of cloud services in Malaysia.

“Microsoft is ready and excited to play our part to help Malaysia realise the aspirations of MyDIGITAL. We believe public-private partnerships will help to further propel Malaysia’s digital economy growth forward,” he says.

Additionally, the government has proposed the appointment of three local ICT companies as MSPs. The MSPs will work with CSPs to manage cloud services for the public sector. These three companies are Enfrasys Solution Sdn Bhd, Prestariang Systems Sdn Bhd and Cloud Connect Sdn Bhd.

This is in line with the government’s goal to empower local companies and make Malaysia a regional champion for cloud computing services. The blueprint further outlines the goal to create an enabling environment for local data centre companies to specialise in high-end cloud computing services in the first two phases (2021-2025).

These local companies can also partner with international technology providers to offer customised cloud services. The government is aiming for the local data centre industry to achieve RM3.6 billion in revenues by 2025.

The presence of CSPs can scale the cloud industry in Malaysia and create job opportunities for tech workers, says Lim.

“As you migrate to the cloud environment, there are a lot of opportunities to innovate. My hope is that these MSPs will collaborate with the broader ecosystem, be it the CSPs or start-ups and other private enterprises. We have to look at cloud beyond the infrastructure and move up the value chain to think about cloud-native apps and platforms,” he adds.

Adding to that, large companies have to be willing to work with local cloud companies to solve business problems. The presence of CSPs will enable local firms to introduce innovative solutions based on cloud platforms.

“For instance, Lapasar is a local business-to-business marketplace working with large companies to solve problems in procurement. We also have companies like [online food delivery platform] Beepit that solved a real problem very quickly by using cloud services. They wouldn’t have been able to innovate and deploy their services so fast without using cloud services,” says Lim.

This is an aspect that Microsoft’s Raman finds important. “We recognise that local businesses, including micro, small and medium-sized enterprises and start-ups, are the backbone of Malaysia’s growth. Microsoft will continue to bolster our efforts in partnership with the public and private sectors to strengthen and upskill local SMEs through digital innovation,” he says.

Overall, Lim finds the blueprint’s strategy for the cloud industry comprehensive, as it covers not just the technological perspectives but also the regulatory, talent and intellectual property aspects. For instance, the programmes to upskill civil servants with digital skills and establishment of open data guidelines under the blueprint can support the growth of the cloud industry.

An aspect that Lim would have liked to see elaborated further is the use of cloud services beyond just data storage. In other words, this means helping companies and the government to not just use cloud services to digitise, but also to leverage on the technology to undergo full digital transformation.

“You don’t just need to transform your processes to become digital. You also need to transform your government services and business models to become truly digital and leverage on the full capabilities of cloud, including building cloud-native apps or cloud platforms for data exchange,” says Lim, adding that these innovations can set Malaysia apart from other countries.

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