Special Report: Telco cloud strategies in Asean
By Mayank Kapoor & Ganesan Periakarruppan July 3, 2013
- An insight into the current state of cloud services in Asean and the role of local and regional telcos in the market
- Telcos bring a few advantages with them when compared with pure-play cloud service providers
CLOUD computing has emerged as a game changing delivery model leading to significant technological and business disruptions across the globe over the last five years.
While cloud computing has matured in countries such as Australia, Japan, the United States and Europe, it continues to be at different phases of introduction in the Asean region.
Singapore, driven by globally leading enterprises, is an exception to this.
The market leader: Singapore
Singapore has been leading the Asean (Association of South-East Asian Nations) region when it comes to the adoption of cloud computing, given the strong infrastructure set up to host cloud services.
A major development of 2012 in the Singapore cloud computing market was the launch of the Central G-Cloud programme by the Infocomm Development Authority (IDA). The key objective of this programme is to not only build private cloud infrastructure for government agencies in Singapore, but to also develop the public cloud infrastructure.
This programme has been a boon for local service providers, with the biggest gainer being the home-grown telco SingTel, which has been awarded a five-year tender to provide the Singapore Government with a cloud computing infrastructure.
While this was on infrastructure front, on the software front, the Business Application as a Service (BAaaS) market is expected to achieve a CAGR (Compound Annual Growth Rate) of 34.5% between 2012 and 2018.
Key applications witnessing adoption in Singapore include communication and collaboration solutions; office productivity suites; CRM (customer relationship management) and other non-core applications.
The challenger: Malaysia
Following Singapore closely, Malaysia is the second largest cloud computing market in the Asean region, with major enterprises beginning to move their services to the cloud.
With assistance from the national ICT custodian the Multimedia Development Cooperation (MDeC), many local ISVs (independent software vendors) and SMBs (small and medium businesses) are stepping into the cloud arena.
One of MDeC’s initiatives is the SME Cloud Computing Adoption Programme. The key goal of this programme is help elevate the competitiveness and efficiencies of local SMBs. The incentives, clubbed with the other benefits of cloud services, are driving SMBs to choose cloud computing over managed services, as it helps them focus on their core business rather than investing time and resources on IT infrastructure and management.
On the BAaaS front, Malaysia is also witnessing a robust growth with a forecasted CAGR of 33.2 % between 2012 and 2018.
However, the adoption level continues to remain low and there is a significant need to enhance awareness levels among local businesses.
The followers: Indonesia, Thailand and Philippines
Indonesia, Thailand and the Philippines are the nascent cloud markets in Asean, taking a more ‘wait and watch’ approach.
The increasing awareness level, especially of the benefits around cost savings, and improved productivity and efficiency, has led to an increase in uptake of cloud services in these countries.
Thailand, in particular, has witnessed an increase in uptake of cloud computing due to the flooding that was a major natural disaster in 2010/2011.
The formation of the Electronics Government Agency or better known as the e-Government agency will provide cloud services and act as an application store for state agencies. The e-Government agency will invest close to 50 million baht (US$1.6 million) to set up cloud computing services for its agencies.
The complete cloud package here includes all three services stacks – SaaS, IaaS and PaaS (Software, Infrastructure and Platform as a service).
The biggest obstacle for Thailand is that the regulatory environment has not been consistent due to frequent change of governments in recent years, producing many inconsistent ICT policies.
In Indonesia, the low availability of high-speed reliable Internet has been a bottleneck for the Government and the various industries that would like to enter the market.
Identifying this challenge, the government-owned PT Telekomunikasi Indonesia (Telkom) announced plans to invest US$233 million over the next four years to roll out a next-generation network capable of speeds of up to 100Mbps.
With the rollout, its Technology Assessment and Application Agency (BPPT) has selected Fujitsu technology to provide cloud services for one of its critical IT operations. This move is expected to accelerate the implementation of e-government services in Indonesia and benefit city/ municipal councils across the country, with a better delivery system of public services.
The Philippines is another nation that was slow in driving its ICT industry forward. The main challenges in the country were the lack of ICT standards and security concerns.
Other concerns are related to the lack of standardisation in the tools used by government agencies and challenges faced from the country’s political framework.
To overcome these issues and drive forward ICT, the Philippines Government has launched a programme called the ‘Smarter Philippines’ initiative. The core objective is to interconnect 70% of government offices as a precursor to a government cloud.
Lastly, Vietnam is beginning to witness initial uptake for cloud services. However, this is limited and the market growth continues to be low. Most enterprises in Vietnam are not keen to move to the cloud due to security and quality of service concerns.
Nevertheless, as the awareness around the advantages of cloud computing rises, enterprises are beginning to adopt such services. Key areas of interest among enterprises are server virtualisation and cloud-based applications (SaaS).
With an increasing number of chief information officers keen to move to the cloud, what is the potential opportunity for the telcos?
Next Page: Telco strategies to tap the opportunities
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