Malaysia's homegrown players not on fast growth track: Page 2 of 2

Burning Platform issue to trigger change
 
Looking at how the companies have done by cluster, Badlisham (pic) notes that the business model of Infotech companies is lumpy by nature, hence the slump in local earnings. But the bigger issue is the perennial lack of trust in homegrown solution providers.
 
“Because, aside from any policy and intervention tools and funding we may create, there is no guarantee that the private sector will bite. You also need to build this trust,” he says, describing it as a ‘chasm that Malaysia, specifically private sector buyers, need to cross.’
 
Acknowledging that more needs to be done to build this trust, it also has to be done via industry associations, such as the SMI Association of Malaysia, and not on a company-by-company basis.
 
“And, it has to be a ‘burning platform’ issue or the needle just won’t move,” he says, using the business lexicon that emphasises a situation where people are forced to act by dint of the alternative being even worse.
 
MDeC’s experience with helping local companies promote cloud services via the MSC Malaysia Cloud initiative since 2011 reinforces this point about needing to build trust.
 
Even when price points are not an issue, buyers have still been reluctant to adopt local services and this lack of trust, not just of the cloud but of service providers, rears its ugly head once more.
 
As for the SSO players, Badlisham is clearly delighted that their local revenues have gone up by 17% from RM1.17 billion in 2011 to RM1.36 billion in 2012.
 
At the same time he feels that the cluster of local SSO companies need to perhaps change their business model. Instead of waiting for clients to approach, come up with a suite of services where companies will get left behind if they do not become fast adopters.
 
“But to create such a bold approach, they need not just the vision and fortitude but the funding too. And herein lies the problem. I don’t think you can just do with public and private money. You need your partners in the ecosystem to fund this too,” Badlisham says, referring to global vendors putting in some investments too.
 
Meanwhile focus in the CMC cluster for MDeC is all about intellectual property (IP) monetisation and awareness.

“Clearly the local market is too small and here it is the export numbers that we look at to gauge how well they are doing,” he adds.
 
In creative content, the focus is mostly on copyright, trademarks and not patent protection.

“As we move towards character licensing, we are educating companies on the importance of protecting their characters and then monetising them. The efforts are bearing fruit as they now seem to know the value of merchandising and licensing,” says Badlisham.
 
While it may seem strange that content creators need to be educated about the value of licensing and character protection, especially with the continued success of Upin & Ipin, Badlisham points out that this has never been part of the business model of the smaller content creators in Malaysia who were mainly contracted to create shows by broadcasters.

Upin & Ipin is a Malaysian television series of animated shorts produced by Les' Copaque Production, which features the life and adventures of the eponymous twin brothers in a fictional Malaysian village.

“We have helped them understand the potential,” he says.
 
Beyond that, MDeC is also helping to build the ecosystem to support this push for monetising IP simply because the language spoken for this is very different to what Malaysian content creators are used to.
 
“You are talking to a different set of players here from IP lawyers to merchandise buyers, manufacturers, retailers and distributors. The language they speak is foreign to our smaller content creators and this is where we come in and make the introductions and even help put the proper business model in place.”
 
Badlisham calls the responsibility of building this ecosystem, 'MDec’s job.'
 
Up next: Why taking the International Advisory Panel back to the Silicon Valley is a good idea and what MDeC hopes to do about companies needing to be in MSC locations.

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