Red Hat eyes SEA expansion, finally sets up shop in Malaysia
By Edwin Yapp August 6, 2015
- Finally sets up local subsidiary to better serve and support customers
- Growth despite slowdown, buoyed by customers’ reliance on open source
OPEN source vendor Red Hat Inc is betting Malaysia will be a growth centre, in line with its expansion plans for South-East Asia, according to its regional chief.
Speaking at a media briefing recently, Damien Wong, senior director and general manager for Red Hat Asean, said Malaysia continues to be a growth region, as predicted by various independent market analysts.
As an example, he said Gartner had forecast a 7.5% growth in ICT (information and communications technology) spending for Malaysia in 2015, compared with flat or negative growth rates globally.
“Red Hat continues to grow both in good times and in slower times,” Wong declared.
“This is because in good times, customers spend more on IT; but in slower times, these businesses still need to run but they will find more cost-effective ways of doing so – and open source is the way to go,” he argued.
Quizzed as to exactly which part of Red Hat’s business was growing, Wong said the company broadly divides its business into infrastructure, and applications and emerging technology.
He said its infrastructure business, which comprises mainly its Red Hat Linux operating system (OS), grew 14% globally year-on-year; while its cloud, applications and emerging technology (middleware and cloud) business showed a compound annual growth rate of 41%.
“Asia … contributed about 20% to global revenue last quarter, more than what we did in the previous year,” he claimed. “The company is growing aggressively, and … Asia is very encouraging.”
Pressed further for details on what kind of customer wins it has had in the past year, Wong declined to elaborate, saying that customer references are usually private.
“[But] I think it’s fair to say that Malaysia uses open source a fair bit, and a lot of that is on Red Hat, so I think that’s a good indicator of our growth.
“We’ve also won one public sector agency which uses our OpenStack-based cloud platform, and it uses it to service other [government] agencies that it interacts with.
“We also worked with commercial banks and telcos, and these have been some of our expansions over the past three years,” he claimed.
Finally, a Malaysian office
In tandem with its growth prospect in South-East Asia, the Raleigh, North Carolina-based company has incorporated a Malaysian office, almost 10 years after it first set up in Kuala Lumpur as a branch subsidiary of Red Hat Asia Pacific Pte Ltd, in 2006.
In an official statement, the company said Red Hat Malaysia Sdn Bhd is part of its aim to help cultivate “a healthy open source environment in Malaysia that will enable small and large enterprises alike to adopt open technologies.”
Red Hat Malaysia is led by its country manager David Yap, who joined the company in April 2012.
He was previously an executive at Oracle Corp and IBM Corp, where he managed the portfolio for middleware sales for various industries including manufacturing, telco, and financial services.
Malaysia was in fact an early adopter of open source software (OSS), with a very strong OSS movement in the early 2000s that led to the Government declaring a public sector OSS procurement preference policy, under the Malaysian Public Sector Open Source Software Masterplan.
Asked why it took so long to set up a subsidiary here in Malaysia, Wong said Red Hat “does not take its expansion plans lightly,” as it takes into account factors such as the ICT industry as well as its business prospects.
He said Malaysia continues to be an important market for Red Hat, as it sees much potential for the adoption of open source technology across industries.
“Do we think it’s a good time? Yes – ICT spending is growing and agencies such as the MDeC (Multimedia Development Corporation) have shown support for open source technology by supporting the imparting of Red Hat skills in Malaysia.
“These are factors that come into play [for us] to expand into Malaysia,” he added.
Just under three years ago, Red Hat collaborated with the Melaka State Government to deploy the open source vendor’s software offerings and to also use its training material at the Melaka Open Source Centre of Excellence.
The state government also signed a memorandum of understanding (MoU) with Abyres, one of Red Hat’s partners in Malaysia, to provide relevant training material under the Red Hat Academy curriculum to universities, polytechnics and community colleges in the state.
“It’s something that we’ve followed through and we’re proud to be associated with such an initiative,” Wong said, referring to the Melaka programme.
Asked about the new Red Hat Malaysia’s headcount and whether it would be augmenting the staff force, Wong said the company doesn’t break out specific numbers, only saying that its growth is in line with the global average of about 20% per year.
On whether Red Hat would set up other offices in other South-East Asian markets, he said those decisions will be evaluated on a case-by-case basis.
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