Developing and Operating World-class Data Centres in Malaysia

Malaysia is a mature data centre market with a strong presence in Southeast Asia. Tan Tze Meng, Head of Data Cloud Business Unit, Digital Infrastructure and Services Department, Malaysia Digital Economy Corporation (MDEC), stated at the Malaysian Cloud & Datacenter Convention 2021 that MDEC has been monitoring and tracking the performance of Malaysia's data centre and cloud industry since 2010.

According to their statistics, industry revenues have reached RM1.7 billion, and this is expected to continue at a 20% growth rate until 2024.

In fact, Malaysia is already seeing companies that are accelerating the construction of data centres in 2021:

  • Bridge Data Centres announced an expansion of its footprint to Malaysia in February 2021, with the data centre in Bukit Jalil, Kuala Lumpur, Malaysia.

  • Microsoft announced cloud region investment in Malaysia with former Prime Minister Tan Sri Dato' Haji Mahiaddin bin Md. Yasin in April 2021.

  • GDS Holdings also announced a large-scale hyperscale data centre campus in Johor in July 2021.

  • Bridge Data Centres has announced the development of a 100MW hyperscale data centre campus in Johor, Malaysia.

Tan also stated that the country's cloud adoption and spending, as well as the level of digital technology adoption in Malaysia, are increasing.

Malaysia developed the first cloud policy as a national agenda in 2017, and it was approved in 2020 in a policy framework for national cloud services hubs and data centres. The cloud-first strategy was implemented in the public sector in 2021, with the government aiming for a 50% cloud computing adoption rate by 2024.

“Knowing that the government has already appointed four cloud service providers that will be supplying cloud services to the government sector, you will notice that three of the companies are actually public cloud players, indicating that this is a strategy that the government has adopted,” said Tan. “Cloud is a key enabler for digitalisation, and there is a compelling reason why the public cloud, as well as the government's own private cloud, is key to this strategy.”

Tan shared that since 2010, the Malaysian government has encouraged the development of data centres and cloud computing. As a result, in 2020, the Digital Investment Office (DIO) was formed to facilitate digital investments into Malaysia. The Malaysian Investment Development Authority (MIDA) and Malaysia Digital Economy Corporation have collaborated to create the Digital Investment Office (DIO) (MDEC).

The primary role of DIO is to align with the MyDIGITAL Blueprint and national investment goals guided by the essence of the shared prosperity region 2030. The DIO's strategic plan aligns with MyDIGITAL's goal of attracting RM70 billion in investment by 2025.

MDEC is a part of the department of digital infrastructure and services, as well as the data cloud business unit. One of their four major responsibilities is to advocate for public-sector cloud adoption. MDEC works with the government, Malaysian Administrative Modernisation and Management Planning Unit (MAMPU), the ministry of finance, and others to create and implement the cloud-first policy, which was established in 2021.

"We also have a team dedicated to investor relations and facilitation. This team investigates ways to assist investors in researching Malaysia for investment purposes. We also have a due diligence facilitation function where investors request our assistance in conducting their due diligence processes," Tan explained.

MDEC has an ecosystem development team that examines existing data centre and cloud companies in Malaysia. This team would engage with the industry to better understand their pain points and gaps in the ecosystem, as well as to develop programmes to assist the industry in growing their business in Malaysia.

"Finally, we have a policy and strategic enablers team that looks at the entire ecosystem for digital investments, particularly [for] data centres, cloud, and connectivity. So, we [examine] Malaysian policies and how they affect the industry. We're looking for policies that inhibit the industry's growth. And we're looking into what policies can be put in place to make Malaysia more appealing for data centre investment," Tan said.

Furthermore, he also stated that the team investigated issues such as data governance, where companies investing in Malaysia are concerned about data flow in and out of Malaysia. MDEC's role is to ensure that companies understand how everything works in Malaysia and to facilitate dialogue between service providers and law enforcement agencies to ensure mutual understanding.

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