Cloud usage: Malaysia below regional average

  • Malaysian companies moving from ‘why’ to ‘how’ stage
  • Lack of confidence in external services, uncertainty over legislation

A recent IDC survey of companies across Asia Pacific excluding Japan (APeJ) shows that Malaysia is below the regional average in terms of cloud computing usage, but that is expected to change significantly in the next six to 12 months.

Only 48.4% of companies surveyed in Malaysia were using cloud computing of some sort, compared with the APeJ average of 65.7%. However, of those already on the cloud, a higher proportion of Malaysian companies (11.7%) was planning to increase their cloud use compared with the regional average of 9.5%.

In Singapore, a total of 82% of companies which responded to the IBM-sponsored survey were already using cloud services.

Cloud usage: Malaysia below regional average“Generally, many Malaysian companies have been taking the wait-and-see approach; they’ve been building their understanding but adoption has been at a slow pace,” says Ku Chuan Cherng (pic), country cloud leader at IBM Malaysia.

“Based on my experience speaking with customers here however, many have gone beyond the ‘why cloud’ to ‘how can the cloud help my organization’ stage, which means they’re ready to move on to the next level.

“Many of these customers are in the advanced stages of cloud evaluation, and I expect to see a rapid pace of deployment in the next six to 12 months,” he adds.

This is borne out by IDC’s findings as well, with 45% of Malaysian companies saying that they would be using cloud services in the next six months, compared with the APeJ average of 18.6%.

IDC conducted the survey from February to March this year, covering nearly 1,000 companies in 12 countries, including Australia, China, India and Singapore. There were 60 respondents from Malaysia.

The respondents came from a wide variety of industry sectors, including financial services, manufacturing, retail and government, and 60% of them were small and medium businesses (SMBs).

“One of the indicators we used for the cloud services adoption rate is the experience the different countries have with outsourcing, whether it is IT outsourcing or business process  outsourcing (BPO) and managed services,” says Chris Morris, an IDC Australia associate vice president who covers the Asia Pacific region.

“The reason this is important is that by using outsourcing services, organizations would have generated the rights and processes that also indicate their readiness for the cloud.

“If we look at countries like Malaysia (55%) and China (62%), more than half the companies surveyed have never used outsourcing services before; while in Singapore, a more mature market, only 21% have never done so,” he adds.

The difference between Malaysia and Singapore is even wider when it comes to the public cloud.

Cloud usage: Malaysia below regional averageIn terms of public cloud adoption, there is probably an 18-month difference the two countries, says Morris (pic), adding that companies in the island republic were more used to external services, had more certainty of legislation and were spoilt for choice when it to the availability of Tier 3 and Tier 4 data centers.

“Our analysis indicates that it’s not a different market, just markets at two very different stages of the cloud adoption cycle,” he adds.

Legislation – whether it is banking regulations or laws covering how customer data is stored and used – was mainly a concern for large enterprises, with 80% of them citing as the reason they have held back on cloud use.

One of the reasons why Ku is confident that deployment will ramp up in Malaysia is the data center expansion going on in the country.

“There has been a lot of development here in data center services; all the major providers are expanding, so I think this is changing,” he adds.

The Malaysian Government has made data centers one of the key areas in its strategic Economic Transformation Program. It targets to increase data center floor-space to 2.5 million square feet by 2015 and 5 million square feet by 2020.

Private cloud deployment is also on the rise in Malaysia and is expected to be a growth area for the country. Although only a small proportion of respondents are currently using private cloud, they have indicated that they plan to increase the usage greatly in the next 12 months.

Of those that currently have a private cloud strategy, 42% have indicated that they are planning to deploy in the next year.

Malaysia pretty much follows the industry average when it comes to virtual private clouds, which Morris describes as “dedicated, ring-fenced assets within a public cloud with higher service-level agreements.”

“This market is being driven primarily by telcos and ISPs (Internet service providers),” he says. “One reason for their uptake is that many companies are finding it difficult to manage their private clouds.”

This is the same reason why companies are looking to cloud appliances – preconfigured servers like the recently announced IBM PureSystems that can be used to plug into existing infrastructure.

“In fact, we estimate that by 2015, two-thirds of all shipments into private clouds would comprise these kinds of appliances,” he adds.

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